The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (82 page)

  reputation of, 3, 85, 96, 230, 246

  resignation of, 415

  return to CEO position by, 347, 352–53, 355–62, 366–67, 369–70, 372–77, 384–86

  rise to CEO of HNG by, 10

  sense of personal entitlement of, 3–4, 91, 119

  on share buyback program, 105

  Skilling and, 59, 68, 118, 125, 176, 389

  on Skilling as CEO, 342–43, 346–49

  social prominence of, 86, 416, 423–24

  stepping down as Enron CEO, 313–14

  stock sold by, 320, 344, 367

  and Teesside power plant, 48–49

  in think tanks, 85, 87, 146

  values of, 3, 89

  Watkins’s letter to, 355–58

  Wing and, 47–48, 52–54, 73

Lay, Linda, xiv, xxiii, 7–8, 10, 86, 89, 90, 98, 343, 367, 386, 398, 416, 422, 423

  campaign contributions of, 87, 88

Lay, Mark, xiv, 6, 59, 90, 343, 385

Lay, Omer, 4

Lay, Robyn, xv, 90

Lay, Ruth, 4

Lay, Sharon, xv, 4, 90

Lay It on the Line survey, 372

Lay/Wittenberg Travel Agency in the Park,
90

LBO, 136–37

LeBoutillier, John, 31

Lee, James (Jimmy), xvii, 201, 389, 393, 395, 402

Leff, Dan, 179

Lehman Brothers, 154, 202, 353, 401

LeMaistre, Charles, xv, 96, 345, 370, 373, 374, 376–77, 404

Lerach, Bill, 410

Levitt, Arthur, 146

libertarians, 31

Library of Congress, 367

Limbaugh, Rush, 25

Linda and Ken Lay Family Foundation, 86

LJM, 189, 191–207, 209–11, 212, 231, 237, 238, 242, 261, 262, 277, 294, 305, 308, 310–12, 317, 327–30, 333, 345, 355, 361, 363–66, 370–71, 374–77, 408, 412, 414, 416, 421

  annual meeting of, 311–12

  Fastow’s sale of, 329–30, 353, 360,
365–66

  SEC’s inquiry into, 371, 375

LJM1, 191, 193, 203, 210, 305, 330, 376, 384, 393

LJM2, 197–207, 209, 289, 294, 305–9, 312, 317, 328–29, 365, 370–71, 376, 381

LJM3, 209, 310, 330, 373

LJM Cayman,
see
LJM1

LJM Investment Activity, 1999, 206

LJM Swap Sub, 191, 193–96, 384, 412

LoChiano, Rocco, 11

Lockheed Martin, 178

Lockyer, Bill, 281

London School of Economics, 152

Long, Susan,
see
Skilling, Susan

Long-Term Capital Management, 219,
385

Los Angeles Department of Water and Power, 281

Los Angeles Times,
273, 280, 281, 429

Louisiana, 2, 38

Lowther, Mike, 317

Lucchetti, Aaron, 246

lumber trading, 225

Luntz, Frank, 372

Lynn, Kathy, xv, 152, 164

  LJM and, 196–97, 204, 304, 355

MacArthur Foundation, 202

McConville, Kevin, xv, 130–31, 305, 308

McCullough, Robert, 277

McGlone, Denise, 140

McLane, Drayton, 423

Mack, Toni, xvii, 72, 94, 318–19

McKinsey, James, 31

McKinsey & Company, 9, 31–32

  on Azurix, 256

  Enron and, 106, 215, 239–40, 244–45,
280

  peer review at, 63

  Skilling at, 12, 31, 32–35, 55, 66, 68, 233

McLean, Bethany, 321–22

Maclin, Todd, 201

McLucas, William, xv, 390, 393–94, 399

McMahon, Jeff, xv, 152, 155, 204, 208–11, 237, 305, 355, 356, 358, 361, 411

  as CFO, 377, 378–80, 389–90, 394–95, 398–99, 402, 405

McNealy, Scott, 243–44

McNeil, Nancy, xv, 86, 97–98

Madera County, Calif., 254–55

Maharashtra State Energy Board (MSEB), 80–83, 315

Mahonia, 159

Mandela, Nelson, xxiv, 240

Manufacturer’s Hanover, 162

margin calls, 343

Mariner Energy, 129–31, 414

Mark, Rebecca, xiii, 54, 77, 93, 94, 100, 158, 180, 409

  appearance and personality of, 71–72

  at Azurix, 113, 124, 246–63

  Azurix termination of, 246, 257–58, 262–63

  background and education of, 72–73

  charm and drive of, 72, 76, 251

  Dabhol project and, 70–84, 102, 409

  earnings and compensation of, 78–79, 83, 111, 113, 138, 262, 397

  Enron International resignation of, 112, 246

  on Enron’s board of directors, 253, 261

  as glamorous, 44, 70, 71–72, 79, 251

  as high-profile woman, 70, 76

  marketing expertise of, 76, 79, 82, 112, 252

  marriages of, 73, 253

  optimism of, 72, 78, 257

  Skilling’s conflicts with, 71, 88–89, 100–101, 110–13, 180, 246–47, 250, 255–56, 258, 259–63, 315, 326

  Wing’s relationship with, 44, 45, 52, 70, 73, 75

Mark, Thomas, 73

market capitalization, 185, 285

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

Marlin, 249–50, 253, 258, 341, 374, 380, 416

Martin, Amanda, xv, 38, 61, 118, 121–23, 134, 337

  at Azurix, 124, 250, 252, 253, 260

  Rice’s relationship with, 123–24, 186–87, 213

Masters golf tournament, 139, 146–47

Mastroeni, Thomas, xv, 17–21, 23–24

Matthews, M. D., 10

Maxey, R. Davis, xv, 128–29, 163

M. D. Anderson Cancer Center, 96

Meade, Andre, xvii, 235, 321, 326

meat futures, 226

Meeker, Mary, 231

Melcher, Patty, 166

Meringolo, Peter, 275–76

Merrill Lynch, 165, 180, 190, 197, 200, 201–2, 206–9, 222, 231, 234–35, 242, 244, 251, 252, 300, 311, 313, 320, 348, 360, 370, 381, 410–11

Mertensotto, Bob, 160

metals trading, 225, 333, 396

methane, 1

Microsoft, 56, 93, 224, 226, 230, 313

Milken, Michael, 17, 412

Millett, Doug, 321

minority-interest financings, 155, 157

 
see also
specific entities

Mintz, Jordan, xv, 327–29, 401

Mirant, 220, 277, 283

Missouri, University of, 4–5, 8, 25, 98

Mobil, 241

momentum investors, 232, 318

momentum portfolio managers, 232

monetization, 182, 293, 296, 368, 378

money-market funds, 236

Montana Power, 271

Moody’s, 14, 80, 236–38, 260, 273, 279, 282, 373, 380, 394–95, 403, 407

Mordaunt, Kristina, xv, 152, 297, 335

  LJM and, 196–97, 355, 394

Morgan, Bill, 8, 25, 98

Morgan Stanley, 63, 102, 164, 220, 231

Morocco, 339

Morton, Rogers, 6

Mosbacher, Robert, 87, 96, 423

Motley Fool, 281

Mozambique, 74, 259

Mozillo, Angelo, 427–28

MTBE, 104

Muckleroy, Mike, xv, 21–23

Mulgrew, Gary, xvi, 194–96, 365, 384

Mulva, James, 104

municipal bonds, 343

mutual funds, 232, 319

NAPCON (North American Power
Consortium), 107

Napoleon III, emperor of France, 248

National League, 86

natural gas, 1–2, 8, 33–34, 36, 79, 109, 159, 172, 225, 244, 248, 278, 300, 345

  distribution of, 258

  futures in, 38, 39, 105, 223, 284

  market for, 126

  marketing of, 280

  pipelines,
see
pipelines

  prices, 88, 109, 409

  producers of, 35, 36, 105

  supply deals in, 49, 61

  traders and trading in, 37, 38, 56–69, 105–6, 110, 171, 224, 243, 284, 339, 396, 397

natural-gas analysts, 232

Natural Gas Clearinghouse, 105, 391

natural-gas contracts, 38, 56

  long-term, 66, 103

  trading of, 36–37, 39

natural-gas industry, 6, 8, 9, 10, 11–12, 27–28, 33, 36, 40, 58, 59, 60, 85,
119

NatWest, 194–96, 203, 365, 384, 412

NCAA, 215

nCube, 293–95

Neuhausen, Benjamin, 190

Nevada, 268

new economy, 230, 244, 348

Newfield Exploration, 402

New Hampshire, 174

New Jersey, 8, 46

New Jersey Board of Education, 134

New Power Company, 302, 309, 316, 362, 369, 399

New York, N.Y., 8, 293, 418

New Yorker, The,
231

New York Mercantile Exchange (NYMEX), 16, 38, 40, 62, 223

New York Post,
423

New York Stock Exchange, 222, 394–95

New York Times,
83, 90, 166, 240, 313, 343–44, 386, 416, 428

NFL, 298, 343, 344, 392

Nigeria, 208, 209, 412, 419

Niles, Ray, xvii, 244, 259

Nixon, Richard M., 2, 6

Northern Natural pipeline system, 11, 387, 395, 403

North Sea, 22, 49, 50, 103

NSM, 130

NYMEX (New York Mercantile Exchange), 16, 38, 40, 62, 223

Obema, Barack, 427

Occidental Petroleum, 109

Ocean Spray, 178

Odom, Michael, 381–82

off-balance-sheet debt, 154, 155, 158, 169, 230–32, 238, 250, 293, 322, 341, 384

off-balance-sheet vehicles, 132, 133, 149, 151, 153, 155, 168, 171, 182, 237, 249, 261, 263, 346, 388, 393, 396, 400

offshore entities, 159, 160

Off Wall Street Consulting, 330

Ogilvy & Mather, 174

Ohio, 174

oil, 1, 33, 34, 36, 38, 88, 131, 159, 240

oil boom, 135

oil companies, 2, 49, 137

oil-futures contracts, 36

oil trading, 15–26, 225

Oklahoma State, 280, 392

Olson, Cindy, xv, 242, 356–58, 360

Olson, John, xvii, 180, 234–35, 375

Omaha, Nebr., 11–13

O’Neill, Paul, 385

Ontario Teachers’ Pension Plan, 176

Open Heart Open, 146

optionality, 322–23

Oracle, 293

Oregon, 107, 108

Oregon Public Utility Commission, 107–8

Osprey, 156, 165, 249, 380, 416

Overseas Private Investment Corporation (OPIC), 74, 81, 88–89

Owens Corning, 178, 181, 182

Pacific Gas & Electric, 265, 272, 277–79, 300–301, 335

Pai, Lou Lung, xv, 43, 57–60, 62, 101, 105, 107, 122, 138, 215, 309, 332–33, 337, 345, 351, 389, 390, 411

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

  Burns undermined by, 69

  character and personality of, 58, 59

  cheating by, 62–63

  departure of, 334, 349, 397

  divorce and remarriage of, 301–2

  at EES, 171, 175, 180–82, 184, 213, 300–302, 304

  at Enron Xcelerator, 302, 334

Pai, Lou Lung (
cont.
)

  EOL originated by, 222

  stock sales by, 334

  strippers as fascination of, 57, 58–59, 301

PaineWebber, 85, 292, 343

Palmer, Mark, xv, 322–23, 326, 339, 346–47, 349, 364, 371, 377

paper and pulp trading, 110, 225, 290, 388, 396

Parla, Steven, 244

Patagonia, 122

Patel, Trushar, 197

Pay N Go (horse), 302

Pellechia, Ralph, 238, 323

Pelli, Cesar, 239, 378

Penn Square scandal, 135

Pennsylvania, 174

Pennzoil, 1

pension funds, 236

Pentagon, 5, 7, 51, 363

People’s Gas & Electric of Chicago, 219

Pepsi, 176

Peru, 14, 254, 375

Peterborough, N.H., 174, 177

Petrocelli, Dan, 417, 418–20, 423

Petropol, 18, 19, 21, 24

phantom equity, 35

Philippines, 74, 77

Phillips Petroleum, 51, 103–4

Photofete, 421

pipeline industry, 6, 7, 9, 10, 11, 25, 27, 33, 56, 137

pipelines, 2, 38, 47, 49, 50, 69–70, 73–76, 85, 98, 105, 108, 228, 230, 283, 286, 369, 379, 387, 409

pipeline systems, 8, 110

Points of Light, 301

Poland, 203, 259

Porcupine, 309, 316

Portland, Ore., 293

Portland General, 107, 110, 166, 185, 260, 264, 270, 316, 366, 409

Portland World Trade Center, 268

Powell, Colin, 51, 240

Power Failure
(Swartz and Watkins), 358

power generation and transmission, 271

power plant developers, 60

power plants, 38, 70, 74, 76, 111, 271, 273, 282–83, 339, 409

power traders, trading, 106, 171, 224, 243, 283, 339, 396, 397

  North American, 226–27, 282, 339–40

Prather, Phil, 5

Prebble, Lucy, 426

prepays, 159, 160, 161, 237, 388

price-to-earnings ratio, 229, 323

PricewaterhouseCoopers, 148, 193, 237, 311, 334

Prince’s Trust, 48

private equity investments, 127, 130–31, 251, 390

privatization, 48, 74, 258

  on military bases, 178

  of water, 247–48

profit shifting, 18, 19, 21, 24

Project Backbone, 289

Project Braveheart, 293–98, 317–18, 368, 412

 
see also
Enron Broadband Services

Project Nahanni, 157, 160

Project Notre Dame, 391–405

Project Raptor, 305–9, 312, 316–17, 323–24, 354–57, 362–64, 366–68, 370, 373, 413, 417

 
see also
Bobcat, Porcupine, Talon, Timberwolf

Project Summer, 260–61, 262–63, 315, 333

Project Tanya, 128

Prudential Securities, 102, 244, 348, 359

PSI Net, 332

Public Citizen, 254

Puerto Rico, 158

Puget Sound Power & Lighting, 271

Pulliam, Rebecca,
see
Mark, Rebecca

Pursuit of Happiness, The
(Kelsey), 194

puts, 37

qualifying facilities (QFs), 166–67

Qualitech, 130

Questia, 344

RADRs, 167–69, 174, 365, 412

Ramsey, Mike, 418–19, 422

Rand, Ayn, 214, 253

Rand, Paul, 174

Raptors,
see
Project Raptor

Rawhide, 157, 400

Raymond, Lee, 241

Reagan, Ronald, 48, 419

Reed, Ralph, 174

Riker, Paula, 420

related-party transactions, 229, 322, 323, 331, 372

Reliant, 277, 355

Reminiscences of a Stock Operator,
219

Republican party, 85, 87, 96, 139, 173, 372

Resources for the Future, 87

retail energy business, 64, 138–39

retail energy market, 302, 369

Reuters, 281

Reynolds, Glenn, 238

Rhythms NetConnections, 191–95, 305

Rice, Ken, xv, 65, 105, 107, 122, 138, 215, 325–26, 337, 345, 351, 415