Anyone following the tragic Enron saga knows the plethora of books that have hit the streets. However, after reading many of them, CONSPIRACY OF FOOLS is probably one of my favorites. And, while I do agree with other reviewers' comments about Eichenwald's intense focus on Fastow as the puppet master, I can't help but think this is not too far from the truth. If, on the other hand, you haven't had the opportunity to catch up on this abomination, two other books are very worthy of mention: 24 DAYS by Rebecca Smith and John R. Emshwiller, and THE SMARTEST GUYS IN THE ROOM by Bethany McLean and Peter Elkind (by the way, Bethany McLean receives high mention in CONSPIRACY as the tenacious young reporter who was not afraid to take on these power brokers).
Very simply put, I love Eichenwald's style. He has taken a subject, which can be extremely complex and dry (i.e. special purpose entities), and has provided the reader with a basis to understand how they were initiated, what they were "designed" to do, and where they failed miserably. And, while a novice to structured finance and accounting may not walk away from the book totally schooled on SPEs, one cannot say Eichenwald failed to explain the general basics. Further, Eichenwald has not created a historical rendering of events; rather, he has created a historical novel, of sorts. The book reads more like a novel and less like a business/non-fiction book.
Two of the more interesting features in this book are Eichenwald's "Cast of Characters," and "The Primary Deals," both of which occupy the forward section of the book. The "Cast of Characters" is no less than six pages (I didn't count the actual characters, but I'd bet there are in excess of 100). This "Cast" is Eichenwald's attempt to shortcut the incredible level of descriptive detail it would take to introduce each new character, their place in relation to Enron, their role, and interaction with other characters. Although it is daunting as a precursor to beginning the first chapter, it is telling in the breadth of individuals and firms this fraud touched (not to mention the thousands of employees, many of whom lost all their retirement savings). Perhaps as, or more, important than the "Cast" is "The Primary Deals." These pages list the deals structured by Fastow et al, which effectively took Enron down. If I could impress upon a reader to focus on the "Deals" before starting the book, rest assured that the reader will have a greater comprehension of the schemes and internal cabals that took down a Fortune 50 company.
As the title of my review suggests, fear and greed dominate this book and the Enron story. This can be immediately evidenced by the incontrovertible activities inside (and outside) the company that are absolutely unethical and illegal (read: fraudulent). And, though these acts weren't totally hidden, the twin powers of fear and greed kept anyone/everyone from stepping up until it was too late (even whistleblower and ostensible heroine Sherron Watkins is not totally clean, in my opinion). The poster children for Fear: the Houston partners of Arthur Andersen (of course, greed was just as powerful here). The Houston AA partners were so fearful of losing Enron as a client that they turned the other cheek to obvious accounting infractions and fraud...even when their own Standards Group was telling them to run! As to the poster children for Greed: the cast is ponderous, but Andy Fastow and Michael Kopper are the Kings of Greed. Through their simple, yet complex collusion, they robbed Enron, its creditors, and investors of close to $100 million. Perhaps more egregious however, is their part in devising such incompetent and fraudulent SPEs, which ultimately were nothing more than shell games.
In the end, Eichenwald is laser-focused on Fastow, and Kopper to a lesser degree. This has caused other reviewers a bit of heartburn in the sense that Ken Lay and Jeff Skilling are presented as intelligent, yet "empty-suited" lackeys. I'm not sure I agree with Eichenwald's overview of Lay and Skilling however, it doesn't detract from the story Eichenwald tells. And while Eichenwald's poisonous pen was aimed at Fastow, honestly, I couldn't agree more. Fastow was quite simply a con man. He wasn't qualified to be the CFO of a small, private company, much less a Fortune 50 company. He lied, manipulated, stole, and cheated...all this from an executive who has the trust of thousands of investors. There was nothing but failure in the cards.
CONSPIRACY is a great read and one much less stuffy than expected. The only reason I didn't lay 5 stars on this books was the perceived imbalance of blame that, in this reviewer's opinion, should have been laid at the feet of Lay and Skilling.