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The House of Cards: Fastow, the Raptors, and California's Crisis
Audio is available on Spreaker — see link below.
Enron's fraud machine is laid bare — mark-to-market accounting, Andy Fastow's hidden debt empire, and the Raptors that were never a hedge, only a countdown. This is the architecture of the largest corporate collapse in American history.
Audio is available on Spreaker — see link below.
Here's what's genuinely difficult to explain about Enron. It wasn't a company run by obvious criminals operating in the shadows.
To understand Enron's collapse, you have to understand the machine they built to prevent it from being visible. It started with accounting.
If Skilling was the architect of the vision, Andy Fastow was the engineer of the concealment. As Chief Financial Officer, Fastow faced a structural problem.
Among all of Fastow's constructions, the Raptors deserve particular attention because they reveal just how unstable the whole system was from the beginning. The Raptors were a set of special-purpose entities designed to absorb losses from Enron's equity investments.
While the accounting schemes were playing out in Houston, Enron's traders were running a different kind of operation on the West Coast. California had deregulated its electricity market in nineteen ninety-nine.
In August two thousand and one, a vice president at Enron named Sherron Watkins sent a memo to Chairman Ken Lay. The memo was direct.
October sixteenth, two thousand and one. Enron issued what was framed as a routine earnings announcement.
The legal aftermath unfolded over several years. Andy Fastow pleaded guilty to two counts of conspiracy.
There's a temptation to file Enron as an exceptional case. A once-in-a-generation breakdown of ethics and oversight.
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