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The Weight of What Was Lost: Enron's Full Reckoning
Audio is available on Spreaker — see link below.
Twenty-nine thousand jobs, billions in retirement savings, and a system designed to look the other way — this is the complete story of how Enron's mark-to-market fraud, special-purpose entities, and circular guarantees brought down the largest corporate empire in American history. From Ken Lay's vision to Jeff Skilling's twelve-year sentence, nothing is left out.
Audio is available on Spreaker — see link below.
When the largest corporate bankruptcy in American history was filed on December second, two thousand and one, it wasn't just a company that went under. Twenty-nine thousand people lost their jobs.
For six straight years, Fortune magazine named Enron the most innovative company in America. Six years.
Mark-to-market accounting is, in principle, a legitimate tool. It allows a company to record the current market value of an asset rather than waiting until the asset is sold.
Andy Fastow was Enron's Chief Financial Officer, and he was extraordinarily good at what he did. What he did was build hiding places.
Among the most elaborate of the special-purpose entities were four structures known as the Raptors. Their purpose was specific.
In August of two thousand and one, an Enron vice president named Sherron Watkins sat down and wrote a memo to Ken Lay. She wasn't a whistleblower looking to go public.
While the internal structures were creaking, Enron's traders were doing something else entirely in the western electricity market. California had deregulated its electricity market in nineteen ninety-nine.
On October sixteenth, two thousand and one, Enron announced its third-quarter earnings. The announcement included a one-point-zero-one-billion-dollar nonrecurring charge.
Through November, Enron scrambled. There was a possible lifeline.
The trials took years. Ken Lay was convicted of fraud and conspiracy in two thousand and six.
The Enron story isn't primarily a story about a few corrupt individuals. The key point here is that it's a story about systems.
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