The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (79 page)

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Abib, Osmar, 163–64, 371

ABN Amro, 164

accounting, 132, 141–42, 165, 230, 261, 328, 361, 397, 406–7, 409, 411–12, 413–14, 416, 419

  EBS and, 289–90

  fair value, 129, 308–9

  fraud, 354–59, 406

  historical-cost, 39–40

  mark-to-market, 39–42, 45, 60, 66, 78, 92, 94, 127, 131, 158, 181, 218, 227, 296, 303, 305, 318–20, 388, 411,
413

  problems with, 95, 96–97

  rules and procedures of, 155, 157, 184, 264, 293, 295, 357

  scandals, 71, 390

 
see also
Arthur Andersen; GAAP

Adelphia, xxiv, 413

Adlong, Shannon, 382–83

Africa, 339, 350

Alchemist, The
(Coelho), 72

Alexander, Jim, xiii, 95

Alkhayat, Hamd, 121, 124

Allario, John, 122

Allied Signal, 182

Allison, Herbert, 235

Al-Waleed, Prince, 391

American Centurion, 340

American Council for Capital Formation, 146

American Enterprise Institute, 87

American Express, 340

American Fork, 293

American Heart Association, 146

America Online (AOL), 319

Amnesty International, 81

“analyst capture,” 235

analysts:

  credit, 236–39, 323, 353

  Enron meetings for, 176, 179–80, 242–44, 284, 314, 320–21, 323, 345

  natural-gas, 232

  securities, 155, 230–35, 236, 237, 240, 243–44, 296, 320, 326, 331, 348–49, 353, 368, 387, 393, 396, 407

Andersen, Arthur, 143–44

Andersen Consulting, 144–45

Antioco, John, 291–92

Apple Bank, 17, 18, 19, 20, 21

Apple Computers, 230

Arab oil embargo, 1

Argentina, 74, 252–53, 257

Arkansas Teacher Retirement System, 202

Arnold, John, xiii, 219, 223–24, 283, 304, 339, 397, 398

Arthur Andersen, 73, 94–95, 116, 124, 161

  annual energy symposium of, 241

  consulting arm of, 144–45

  demise of, xxiv, 406

  on EES, 184, 300

  Enron and, 19, 20, 141, 143, 145–49, 157–59, 162, 168, 169, 176, 207–9, 239, 295–97, 305, 307, 316–18, 354, 356, 358, 381–85, 393, 406–7, 416

  Enron accounting restatement and, 363, 368–69, 383–84, 393, 394

  Enron employees from, 153–54, 169, 323, 354, 355, 362

  firmwide strategic advisory council of, 147

  on LJM, 190, 197, 361, 393

  obstruction-of-justice conviction of, 406–7

  Professional Standards Group (PSG) at, 148, 190, 295, 318, 323, 363, 382

  reputation of, 143–44

  scandals involving, 145, 147, 357, 381

Art of War, The
(Sun-tzu), 58

Aspen, Colo., 423

Astin, Ron, xiii, 166

Atlantic Water Trust, 249, 253

attorney-client privilege, 382

Avici Systems, 290, 308, 354

Ayers, Judith Diane,
see
Lay, Judith

Azurix, 90, 113, 124, 246–63, 285, 313, 341, 368–69, 373, 374, 387, 399, 417

  collapse of, 318

  IPO and stock of, 251–52, 253, 254, 256, 258

backup credit lines, 379, 386

Badum, Jim, 176

Bahía Blanca, 257

Baker, James, xxiv, 79, 423

Baker Hughes, 402

Baldwin United, 319–20

Ballentine, James, 341

Ballmer, Steve, 313

bandwidth on demand, 286

bandwidth trading, 110, 188, 243, 244, 284, 286–87, 290

Bank of America, 81, 343

Bankers Trust, 39, 42–43, 57, 58, 115

banking crisis, Texas, 36

Bank One, 167

Baptist Church, 86

Barclays, 168–69

Barone, Ron (PaineWebber/UBS Warburg analyst), xvi, 85, 292, 325, 348

Barone, Ron (S&P analyst), 238

Barrington, Brian, 124

Bartiromo, Maria, 219

Barton, Joe, 173

Bass, Carl, xvi, 295, 297, 316–18, 363

Bauch, Billy, 294

Bauer, Tom, 169

Baxter, Carol, xxii

Baxter, Cliff, xiii, 38, 64–66, 105, 122, 210, 215, 228, 249, 260, 299–300, 313, 315, 343, 390

  concerns about Fastow of, 152, 163, 333, 356

  departure of, 333–34, 349, 350, 361, 380, 397

  at Enron North America, 207, 213

  as mergers and acquisitions specialist, 64

  as negotiator, 107–8, 109, 262

  Pai’s problems with, 65, 66, 228, 302

  suicide of, xxi–xxiii, xxv, 408, 418

Baxter, J. C., xxii–xxiii

Bayly, Dan, xvi, 208–9, 411

Beard, John, 18, 19, 20

Bear Stearns, 321

Bechtel, 81

Belden, Tim, xiii, 264, 266, 269, 271–76, 278–79, 282–83, 300, 309, 339,
413, 420

  guilty plea and deal of, 413

Belfer, Arthur, xiii, 13

Belfer, Robert, xiii, 13, 199

Beowave geothermal energy facility, 268

Berardino, Joseph, xvi, 147, 317

Bergstrom, Steve, xvii, 391–92, 395, 402

Berkowitz, Sean, 419, 421–22

Berlin, 254

Bermingham, David, xvi, 194–96, 365, 384

Bienenstock, Martin J., 390–91

Biochemical Research Foundation, 86

Blachman, Jeremy, 169, 359

Black, Don, 304

Blackstone Group, 405

Blockbuster, 291–94, 296–98, 368

Blodget, Henry, 231, 234

Bloomberg News, 340

Bobcat, 308

Bolivia, 74, 75, 203

bond market, 30

Borget, Louis, xiii, 16–24

Bossidy, Larry, 182

Boston Beer Company, 47

Bowen, Ray, xiii, 394, 398, 404

Bowen, W. J. (Jack), 6–10

Braveheart,
see
Project Braveheart
and
Enron Broadband Services

Brazil, xxiv, 75, 77, 203, 258, 259, 366

Brewer, Lynn, 264

British Petroleum, 391

broadband,
see
Enron Broadband Services

Brobeck Phleger, 274, 276–77

Bronson, Phyllis, 386

Brooklyn Union, 34

Bruin Interests, 90

Bryan, Lowell, 66

Bucharest, 254

Buenos Aires deal, 252–53, 254, 257,
313

Buffett, Warren, 67, 391

bull market of 1990s, 132–33, 143, 150, 229, 231–32, 234, 318–19, 326–27

Burns, Ron, xiii, 69, 100

Bush, Barbara, 423

Bush, George H. W., 86, 423

Bush, George W., xxiv, 86, 302, 313, 426

  Lay and, 87–88, 89, 173–74, 411

Bush, Jeb, 254

Bush family, 365

Bush Pioneers, 88

business press, 230

BusinessWeek,
225, 281, 313, 350

Butler, Bill, 217

Buy, Rick, xiii, 115–18, 130, 141, 181, 194, 313, 316, 346, 362, 363, 399

  on LJM deals, 192, 193, 197, 199, 203, 205, 305, 307, 311, 328–29, 361

buy ratings, 233, 234, 348, 371

cable television industry, 287

Cactus, 67, 132, 138

California, 248, 345

  attorney general’s office in, 274

  energy crisis in, 271–83, 300–301, 316, 327, 335–36, 338, 352–53, 373, 413, 416

  energy deregulation in, 174–75, 176, 264–83, 327

  as growth market, 10, 11

California, University of, 178

California Power Exchange (Cal PX), 266, 268, 269

California Public Employees Retirement System (CalPERS), 67, 127, 132, 168, 176, 190, 316, 383

California Public Utilities Commission (CPUC), 265, 266, 274

California State University, 178, 183

calls, 37, 231

Calpine, 283

Cambridge, Paul, 388

Campbell, David, 240, 244–45

Campsie Limited, 194, 196

Canada, 61, 254

Canadian Imperial Bank of Commerce (CIBC), 202, 293–95, 410

Cancún, 254

capacity contracts, 38

Carpenter, Michael, 395

Carter, Rebecca, xiii, 124, 307, 310, 327, 345, 347, 348, 350, 358

Cash, Debra, 362

cash flow, as finance basic, 150

Castleman, Kent, 203

Causey, Rick, xiii, 127–28, 141–43, 172, 299–300, 313, 325, 347, 357, 362, 367–69, 374, 415, 416, 419–20

  as chief accounting officer, 172, 317–18, 393

  Duncan’s friendship with, 146–48, 369

  LJM deals and, 195, 197, 199, 200, 204, 205–7, 209, 307, 309, 311, 328, 330, 355, 361

  on Project Raptor, 323–24

Cavuto, Neil, 253

Cayman Islands, 194, 310

CCC Information Services, 135–36

Ceconi, Margaret, xiii, 180, 182–83, 303–4, 345–46, 358–59

Center for Financial Research and Analysis, 231

CEO Magazine,
239

CFO Excellence Award, 154

CFO Magazine,
154, 250

CFTC (Commodities Futures Trading Commission), 96, 224

Channel Islands, 21, 159

Chanos, Jim, xvi, 319–21, 325, 326, 331, 348–49

Character Education Partnership, 86

Charles, Prince of Wales, 48–49

Chase Manhattan Bank, 116, 159, 160, 162, 164, 165, 251

  EES and, 178

  LJM and, 200–203, 310, 311

  merger with J. P. Morgan of, 159

 
see also
J. P. Morgan Chase

Chemical Bank, 162

Cheney, Dick, 87, 280

Cheney, Lynne, 87

ChevronTexaco, 392–93, 394–95

Chewco, 168–70, 189, 330, 364, 383–84, 393

Chicago, Ill., 419

Chicago City Gate, 38, 40

China, 74, 75, 109, 240, 259

Chinese Wall, 233–34, 375

Choctaw, 157

Christian Coalition, 174

Churchill, Winston, 133

CIA, 45, 221

CIBC (Canadian Imperial Bank of Commerce), 202, 293–95

Cisco, 93

Citibank, 60, 162

Citigroup, 96, 159, 160, 162–65, 244, 380, 385, 387, 395, 402, 407, 410, 427

  LJM transactions and, 202, 205, 230

  in Project Nahanni, 157

  in Whitewing transaction, 155–56

Civil Service Commission, U.S., 6

Clinton, Bill, 82, 96

CNBC, 125, 219, 231

coal, coal trading, 1, 10, 36, 225

Coale, Carol, xvi, 102, 244, 347, 359

Coalition for Jobs, Growth, and Competitiveness, 87

Coca-Cola, 95

Coelho, Paulo, 72

coffee futures, 226

cogeneration (cogen) projects, 46–48

 
see also
Teesside power project

collateralization, 168

Colombia, 74

Colwell, Wes, 413

Commerce Department, 385

commercial paper, 378–79

Commerzbank, 235, 321

Committee on Governmental Affairs, 270

Commodities Futures Trading Commission (CFTC), 96, 224

commodities trading, 16, 22, 27, 30, 37, 38, 65, 207, 225, 409

Compaq, 86, 182

Compass Bank, 343

Condor, 355–56

Congress, U.S., 159, 162, 172, 173, 231, 238, 345, 407, 408, 416

  natural gas regulation in, 8–9

Congress Party, 81

Conoco, 1, 57

Continental Airlines, 153

Continental Bank, 135–37, 140, 141

Continental Resources, 73

Contrarian Investor, The,
319

Cooley, Denton, 423

Cooper, Steven, 155

Coopers & Lybrand, 153–54

corporate ethos, 133

corporate whistle-blowers, 358

Covey, Stephen, 58

Cox, David, xiii, 290–92, 297–98, 334–35

CPUC (California Public Utilities Commission), 265, 266, 274

credit derivatives, 226, 340–41, 349

Credit Rating Agency Reform Act, 426

Creditex, 341

credit-rating agencies, 154, 155, 156, 161–62, 230, 236–39, 250, 312, 341, 366, 394–95, 403

credit ratings, 236–37, 373, 380

Credit Sights, 238

Credit Suisse First Boston (CSFB), 159, 163–64, 179, 194–96, 202–3, 234, 235, 244, 341, 348, 353, 371, 407

Croatia, 258, 260

Crowley, Larry, 175

crude oil futures, 16

Cuiabá, 203, 206, 259, 330

Curry, Wanda, xiii, 299–300, 301, 303, 304

Cutler, Stephen, 410

Dabhol project, 79–83, 94, 102, 260, 315, 340, 342, 353, 366, 373, 399, 409

Darby, Giles, xvi, 194–96, 365, 384

DASH (deal-approval sheet), 115, 117

Davis, Gray, 277, 279

Dean Witter Reynolds, 102, 104

Dear, Leigh Anne, 146

Death Star, 269–70, 274, 275, 276, 282, 335

debt, as finance basic, 150

debt analysts, 237

deep-discount bonds, 30

Deffner, Joe, 161

Delainey, Dave, xiii, 218, 228, 276, 302–4, 308, 359, 404, 413–14, 421

DeLay, Tom, 87

Deloitte & Touche, 390

Delta, 159, 160

DeMauro, David, 183

Democratic party, 85, 88

DePelchin Children’s Center, 98

deregulation, 8–9, 13, 27, 33, 48, 85, 88

  in California, 174–75, 176, 264–83, 327

  Lay as advocate for, 2–3, 172, 175, 240, 265, 267, 278, 281, 327

  of retail electricity, 172–78, 180

  state-by-state, 173–74, 176–77, 180–81

derivatives, 37, 39, 42, 158, 323

derivatives-pricing models, 192

Derrick, Jim, xiii, 344, 357, 358, 366, 376, 402

Deutsche Bank, 229, 244, 388

DeVille, Mike, 195

Dickson, Glenn, 184

Dietart, Jeff, 233

Dilg, Joseph, xiii, 357, 360–61, 366

Dodd-Frank Wall Street Reform and Consumer Protection Act, 427

Dodson, Bill, xiv, 153, 167, 169, 197, 384

Dominican Republic, 74, 78, 95, 259

Dominion Energy, 47–48

Donaldson, Lufkin & Jenrette, 156, 159, 165, 202, 232

Door,
3

dot-coms, 121, 271, 318, 372

Doty, Rob, 395, 398

Dow Jones, 319, 354

downgrading of stock, 102, 235, 348, 374–75, 394–95, 400, 401, 403

Drexel Burnham Lambert, 17, 95, 224

Driscoll, Michael, 270

DSL service, 292–93, 295

Duke, 277, 345

Duncan, David, xvi, 146–48, 176, 190, 193, 295, 317–18, 324, 362–63, 368–69, 374, 381–83, 406

Duncan, John, xiv, 10, 13, 343, 376, 408