Preface.
Time Line.
1. Pipeline to Profit.
2. Where the Money Is.
3. Major Ambition.
4. Electrifying Opportunity.
5. Culture of Creativity?
6. The Energy Buffet.
7. Taking the Plunge.
8. Enron Gets Wired.
9. Power and Glory.
10. California Dreamin’.
11. Power Overload.
12. Downward Spiral.
13. Racing the Clock.
14. Endgame.
Epilogue.
Author’s Note.
Notes.
Index.
LOREN FOX is a former senior editor at Business 2.0, the award-winning business magazine, and a leading authority on business strategy. Previously, Fox was finance editor of Upside magazine. He also spent five and one-half years as editor and reporter for Dow Jones News Service, where he covered the energy industry and Enron. His work has appeared in The Wall Street Journal, Barrons, Salon.com, and other media.
"...Fox fills the void left by Lay and other Enron top dogs in
swift, building-block fashion, producing a ground-up view of why
the "Crooked E" colossus rose and fell. A sober and clear-eyed
book, it's the more restrained of the two [compared to Pipe
Dreams]. But it's not too restrained to pass up the chance to get
in some good snarkfests over Enron's outsized egos and swagger—or
remind us that its swagger is what most investors bought.... Fox
places the unspooling of Enron in its market-history context, and
his book has gravitas...."
—Barron's "...Fox is a business writer based in New York who digs
into how Andrew S. Fastow, Enron's former chief financial officer,
set up special purpose entities that ultimately helped cause the
company's downfall. Of the three books [including and Anatomy of
Greed], this one offers the most detaile d explanation of Enron as
a business."
—New York Times "Enron: The Rise and Fall is the latest and perhaps
most impressive of the recent crop of books about the collapsed
energy giant . . . [Fox’s] candid, in-depth examination of Enron’s
remarkable evolution, corporate culture and ultimate downfall is in
itself remarkable for being both scrupulously detailed while
remaining a clear and enjoyable read, even when dealing with the
Byzantine complexities of the company’s financial engineering."
—ERisk.com "Book of the Month" review "...a gripping read with
plenty of lessons for companies that do not want to become victims
of their own success..."
—Lloyds List "AFTER the fall come the books. And nothing recently
in the corporate world has fallen quite so spectacularly as Enron,
the Houston-based oil-and-gas company that flew so high it made
Icarus look like a grasshopper. Enron scorched to earth in December
2001 when it was forced to seek protection from its creditors under
Chapter 11 of America's bankruptcy code. Thousands of employees
lost their jobs and their pensions (largely invested in worthless
Enron stock) while the designers and polishers of its wings of wax
walked away with tens of millions of dollars each.
Not a pretty tale. Of the many tellings of it, these are currently
the two most popular. In the absence of any input from the leading
characters--the chairman and founder Kenneth Lay, the chief
executive Jeffrey Skilling and the chief financial officer Andrew
Fastow, all of whom are keeping mum in view of pending
lawsuits--authors must tackle their subject somewhat indirectly.
These two take rather different routes. Robert Bryce is a Texan
journalist with a feel for the place and climate of his subject. He
brushes past the (not inconsiderable) technical complexities of Mr
Fastow's off-balance-sheet schemes and heads straight for the
personalities. This is not "Dallas", but it's not far off. It's
dead flat, air-conditioned Houston, where the town's big rich (and
they don't get much bigger) live in River Oaks, a district whose
architecture was once described as "Ralph Lauren meets Scarlett
O'Hara". Enron's top executives all made it to River Oaks, and Mr
Bryce obligingly provides us with a map to show where they are.
As he describes them, they are almost unremittingly awful. One of
them that he met "reminded me that being a Texas-sized sphincter
was valued at Enron". After a while, though, his litany of their
adultery and greed seems unbalanced. Surely there were some
redeeming features? Surely the whistle-blowing accountant, Sherron
Watkins, was not merely seeking to further her own career when she
exposed Mr Fastow's accounting tricks? And what about J. Clifford
Baxter, the Enron vice-chairman who shot himself a year ago leaving
a suicide note for his wife in which he said: "I have always tried
to do the right thing, but where there was once great pride now
it's gone...please try to forgive me." Mr Bryce leaves no room for
atonement.
Loren Fox is a business writer who does not shy away from the
complexities of Enron's business and financial dealings. On
occasions, though, their details hold up the flow of his story.
Especially before he gets really rolling with a perceptive chapter
called "Culture of Creativity?" Here he describes the change in
Enron's corporate culture, wrought largely by Mr Skilling who once
said that he wanted his "best people to wake up at three o'clock in
the morning in a cold sweat". And not because they'd left the
air-conditioning on.
There is a peek into Enron's notorious twice-yearly Performance
Review Committee meetings. Known as rank and yank, they consisted
of a group of senior managers getting together in a hotel for a
week or so, ranking employees according to various criteria, and
then sacking the bottom 10-20% of them. But don't worry. The moral
of the story is, it didn't work.
On one critical event in the Enron story both books agree. If there
was a no-turning-back moment for the company it was the resignation
in 1996 of the chief operating officer, Richard Kinder (pronounced
"Kinnder" and referred to in one book as Rick and in the other as
Rich, suggesting he has not talked to either author). Mr Kinder had
been the hands-on counterbalance to Kenneth Lay's networking with
the rich and powerful (President George W. Bush called him "Kenny
Boy"). Mr Kinder kept a keen eye on the cashflow and frowned on
extravagance. But he was replaced by Mr Skilling, whose eyes, as we
now know, were elsewhere."
—The Economist, January 11, 2003 U.S. Edition "...this one
impresses by its sheer mass and wealth of detail..."
—Mortgage Finance Gazette "…struck the right balance and given us a
book, which is both entertaining and highly informative…"
—AccountingWeb "…overall an excellent introduction to the Enron
saga…"
—Global Turnaround
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