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Raptors, Ricochet, and the Machinery Behind the Myth
Audio is available on Spreaker — see link below.
Enron's mark-to-market fraud, special-purpose entities, and the Raptor structures weren't accidents — they were architecture. This chapter dissects exactly how the numbers were manufactured, how Andy Fastow hid the liabilities, and how California was left in the dark.
Audio is available on Spreaker — see link below.
Before Enron collapsed, it was celebrated. That's the part people forget.
To understand what Enron actually did, you need to understand mark-to-market accounting. The concept itself is legitimate.
Mark-to-market gave Enron inflated profits on paper. But those inflated profits created a second problem.
The most intricate piece of this machinery was a group of special-purpose entities known as the Raptors. Four of them, created between two thousand and two thousand one.
While Fastow was engineering the balance sheet, Enron's trading floor was running a separate operation. California had deregulated its electricity market in nineteen ninety-nine.
By the summer of two thousand one, at least one person inside Enron understood clearly what was happening. Sherron Watkins was a Vice President in the finance division.
The collapse, when it came, was fast. On October sixteenth, two thousand one, Enron announced its third-quarter earnings.
Twenty-nine thousand people. That's the number that gets cited in every account of the collapse, and it's easy for it to become just a figure.
The trials took years. Ken Lay was convicted of fraud and conspiracy in May two thousand six.
The standard version of the Enron story treats it as a story about bad individuals. Ken Lay, Jeff Skilling, Andy Fastow.
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