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Who Are These Guys
on June 12, 2004
I chose the above title quote from "Butch Cassidy and the Sundance Kid" to highlight my review. The authors provide a biography of many of the Enron players that lets us know what these guys were all about at their core. For example, Jeff Skilling spent almost all his after-school time working at a television station. Yet, he went to college without a dime because he blew all his pay in the stock market-buying stocks on margin. Never mind though because he got an impressive academic scholarship anyway because of his "brilliance." The authors provide other telling stories about the other major players. Ken Lay, the Baptist preacher's boy who preached exemplary corporate values, had an affair with his secretary, and later divorced his first wife to marry her. Yes, this is the same lady who went on television complaining about being broke while her family still owned millions of dollars in real estate. Lay's number two guy-not Skilling-who shacked up with a different Ken Lay secretary at Enron, costing himself annointment as Lay's successor. By the way, this guy now is a billionaire. Having that affair with Lay's secretary, later marrying her, was the smartest thing he ever did because he left Enron to found his own high-flying energy company. Rebecca Mark got a leg up from another Enron mentor by having a tempestous affair with him. The stories like this go on and on.
The authors provide far more detail about company history and the accounting conspiracies that brought it down. As a professional accountant, I am even more convinced now that Arthur Andersen deserved to fail for approving many of the tricks that Enron used to book fictitious profits. The authors point out that near the end, nearly 85% of Enron's total debt wasn't on their books, but "lay" in off balance sheet special purpose entities. The auditors couldn't understand the meaning of the standard sentence in an audit report that states that the financial statements "present fairly the financial condition and operations of Enron in accordance with generally accepted accounting principles." They over emphasized generally accepted accounting principles and ignored the term "present fairly." Good riddance to them.
The authors certainly are not admirers of Skilling, Fastow, or most of the other Enron players. For example they say of Skilling in their Epilogue, "He does not seem to have any remorse about his own actions, any sense that he hired the wrong people, got into the wrong businesses, or emphasized the wrong values. The fault, in his view, lies in a world that did not and will not appreciate the sheer newness of what Enron was trying to do." At the end, Jesse Jackson-yes that Jesse-held prayer meetings in the hall to comfort the afflicted who suddenly realized they needed forgiveness. Skilling didn't attend. I hope Jesse says a few prayers to protect Jeff while he's in prison. He'll need them, as well as a lifetime supply of "soap on a rope."
Certain Enron principals flew to their bankruptcy hearing in their mega-bucks Gulfstream 5 executive jet and stayed at the plush Four Seasons in Manhattan. As one of the offending executives said, "Maybe we should have flown on Southwest and stayed at the Ramada." In short, yes.