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The Foundation Was Never Real: Enron's Rise and the First Fictions
Audio is available on Spreaker — see link below.
For six consecutive years, Fortune called Enron the most innovative company in America — then in three weeks, it was over. This is how Ken Lay, Jeff Skilling, and Andy Fastow built a fraud hiding in plain sight.
Audio is available on Spreaker — see link below.
For six consecutive years, Fortune magazine named Enron the most innovative company in America. Six years.
Ken Lay grew up in rural Missouri, the son of a Baptist minister. He was not born into wealth or power.
The key shift happened because of deregulation. Through the late nineteen eighties and into the nineties, federal regulators loosened the rules governing natural gas markets.
One of Skilling's earliest and most consequential victories was getting Enron permission to use mark-to-market accounting for its trading contracts. The SEC approved this in nineteen ninety-two.
By the late nineteen nineties, there was a growing problem. Enron's trading operations required enormous amounts of capital.
While Fastow was building his architecture of concealment, Enron's traders were doing something different in California. Something more direct.
By the summer of two thousand and one, someone inside Enron had seen enough. Sherron Watkins was a vice president in Enron's finance division.
On October sixteenth, two thousand and one, Enron released its quarterly earnings. Buried in the announcement was a one-point-zero-one billion dollar nonrecurring charge.
The criminal cases took time to assemble. The structures were complex.
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