The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (83 page)

  departure of, 335, 349

  earnings and wealth of, 187, 333, 397

  at Enron Broadband Services, 61, 171, 186, 213, 243, 287–92, 294, 298–99, 301, 332–35, 420

  at Enron North America, 186, 213

  family life of, 186–87

  indictments against, 411–12

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

  midlife crisis of, 186–87

Rice University, 240, 389

Richards, Ann, 88

Richardson, Bill, 278

RICO, 276

Ricochet, 270, 274, 276, 335

Riley, John, 383

risk management, 114–18, 132

River Oaks Country Club, 100, 367

Roberts, Mark, xvii, 330–31

Robertson Stephens, 244

Robinson, Ed, 255

Rockefeller family, 1

Rogers, Jim, 35

Roosevelt, Franklin Delano, 411

Roy, Arundhati, 79

Royal Bank of Scotland, 203, 205

Rubin, Robert, xvii, 82, 96, 385, 395

Rudden, Kyle, 230

Ruemmler, Kathy, 419–21

Russ, Mark, 51

Ryser, Dan, 68

Sacramento Bee,
267

Sallie Mae, 140

Salomon Brothers, 192

Salomon Smith Barney, 162, 231, 244, 331

Sam Adams beer, 47

Sanders, Donald, 235

Sanders, Richard, xv, 274–77, 278, 335, 405

Sanders Morris Harris, 235

San Diego, Calif., 266, 272

San Diego Gas & Electric, 265, 273, 276

San Francisco Chronicle,
279

San Francisco Giants, 178

Sarbanes-Oxley (corporate-oversight rules), 411, 426

Sawhill, John, 9, 12

Schilit, Howard, 231

Schorr, Bob, 119, 120

Schroder & Company, 244, 259

Schwarz, Angela, 359

Schweiger, Jim, 350

Seattle, Wash., 293

Secrest, George “Mac,” 421

securities analysts, 155, 230–35, 236, 243–44, 296, 299, 320, 326, 331, 348–49, 353, 368, 387, 393, 396, 407

Securities and Exchange Commission (SEC), xxi, 41–42, 57, 104, 127, 145, 146, 207–8, 303, 307, 312, 321, 329, 358, 359, 367, 369, 390, 410, 413–14, 427

  Enron investigated by, 371–72, 375, 381, 382–83, 390, 393–94, 410

  Enron Oil investigated by, 20, 24

  Enron’s filings with, 324, 354, 357, 394, 399–400, 401–2

  Merrill Lynch charged by, 410

securitization, 66–67, 133, 136, 149, 157, 158, 261, 331

Segnar, Sam, 11–12

Seidl, Mick, xv, 19–25, 423

sell reports, 320

Senate Permanent Subcommittee on
Investigations, 159, 407

September 11 attacks, 362–63, 375, 385

Sera, Sherri, 329, 347

Seven Habits of Highly Effective People, The
(Covey), 58

Shankman, Jeff, 241

Shapiro, Marc, xvii, 162, 340, 404–5

shareholders, dilution of, 150, 154

shareholders’ equity, 370

Shelby, Richard, 426

Shell, 112, 391

Sherriff, John, xv, 216, 217, 222–23

Shipman, Todd, 116, 323

short sellers, 258, 325, 341, 374

Shred-It, 383

Sierra Club, 254–55

Sierra Pacific, 316

Silicon Valley, 271, 412

Silverpeak, 269

Simmons, 233

Simon Property Group, 178, 191

Simpson, O. J., 417

Sithe Energies, 60–61, 62, 67, 105, 123, 213, 218

Siurek, Ryan, 323–24

60 Minutes,
417

Skilling, Betty, 28–29

Skilling, Jeff, xiii, 3, 27–43, 45, 59–69, 141, 157, 192, 222, 232, 235, 237, 281, 290, 301, 302, 335, 344, 399, 408, 413, 416–24, 428–29

  accounting practices of,
see
mark-to-market accounting

  appearance and personality of, 28, 101

  arrogance of, 31, 32–33, 44, 241, 245,
345

  on Azurix, 250, 251–52, 255–57, 259–63

  background and childhood of, 28–29, 72, 73, 319

  “big enchiladas” of, 171, 184, 262, 263

  on broadband, 171, 184–88, 255–56, 262, 284–86, 288, 298, 299, 314–16, 331–32, 338, 340, 349

  business strategy of, 255

  Carter’s relationship with, 310, 327, 345, 348

  CFO search by, 140

  Commonwealth Club pie incident and, 335–36, 339

  confidence of, 337

  contempt for Washington of, 173

  as COO, 100–102, 104–13, 114–15, 118–29, 131, 139, 171, 332, 338, 384

  COO search by, 342

  creativity and original thinking prized by, 119

  daredevil expeditions led by, 122, 123

  Darwinist worldview of, xxiii, 31, 55–56, 62, 64, 332

  denials of knowledge by, 324, 416

  as deregulation advocate, 265, 327

  distress and depression of, 337–39, 346

  drinking of, xxiii, 338–39, 418

  earnings and wealth of, 30, 100, 240, 313, 347, 350

  education of, 29–31

  on EES, 171–72, 175–76, 177, 179–80, 182, 184

  on Enron bankruptcy, 414

  as Enron CEO, 313–36, 337–43, 345–46, 350–51

  on Enron stock, xxv, 242, 326–27, 410

  family life of, 68–69, 314–15, 325, 339, 347, 349

  Fastow and, 134, 137, 138–39, 140, 150, 152, 154, 168, 190, 192–93, 199, 200, 205, 210–11, 305, 307, 328–29, 333, 364, 377, 414

  as gambler at heart, 28, 30, 217

  Grubman confrontation of, 325–26

  homes of, 123, 348

  income and wealth of, 35, 69

  intelligence as value of, 28, 31, 32, 34–35, 44, 55, 68, 114, 120

  “klieg-light syndrome” and, 120

  as libertarian, 31

  on LJM, 310, 311, 312, 328–29

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

  as manager, 28, 55–57, 101–2, 107–8, 114, 127, 164, 233, 247

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

  marriage collapse of, 100, 101, 349

  misleading statements by, 321–22, 323, 325

  Policy Committee formed by, 328

  positive public statements of, 121, 126, 133, 177, 303, 315, 340

  on Raptor restructuring, 324

  recklessness of, 285

  reputation of, 70, 230, 246, 258, 408

  resignation as CEO by, 337, 342–43, 346–54, 355–56, 357, 361, 363, 372, 379, 380, 389

  return considered by, 389–90

  on Rhythms deal, 191

  on share buyback program, 105

  start-up mentality of, 56–57, 61, 101

  stocks sold by, 320, 345, 416, 420

  theories of, 233, 240, 244

  on those who “got it” and those who didn’t, 233

  trading operations of, 70–71, 73, 78,
93, 212–14, 216–19, 222–23, 225–26, 228

  in wake of Enron collapse, xxiii–xxv

  as workaholic, 68–69

Skilling, Jeffrey (son), 314, 339, 350

Skilling, Kristin, 325, 343

Skilling, Mark, 314, 327, 350

Skilling, Sue (sister), 29

Skilling, Susan (first wife), xv, 30,
68–69

Skilling, Tom (brother), 29

Skillingites, 57, 105, 328

Skytel, 175

Smith, Rebecca, xvii, 246, 360, 364

Smith, Sherron,
see
Watkins, Sherron

Smith, Tracy, 187

solar energy, 174

Soros, George, 74

South Africa, 74

South America, 75, 112, 259, 325

Southampton Place partnership, 196–97, 206, 297, 311, 355, 376, 394, 411

Southern California Edison, 167, 265, 277, 278, 280

Southern Methodist University, 29, 312

South Korea, 258

Southwest, 18, 19, 21, 23

Southwestern Baptist Theological Seminary, 385

Spacek, Leonard, 144

Spain, 339

special-purpose entities (SPEs), 149, 151, 157–58, 161, 166–67, 189, 191, 209, 229, 259, 290, 293, 305, 310, 316, 317, 354, 360, 380, 383, 384, 400, 409

 
see also
specific entities

Spindletop, 1

spot market, 265–66

Stamford, Conn., 409

Standard & Poor’s, 98, 102, 105, 116, 125, 131, 206, 229, 236–38, 319, 323, 380, 394, 395, 400, 403, 407

Stanford Business School, 21, 214

Star Wars,
67, 134, 168, 189

Starwood, 181

State Bank of India, 164

Stead, Ed, 292

steam, 49

steel trading, 225

Stewart, John, xvi, 317–18, 363

Stewart, Martha, 413

stock issuance, 150, 341

stock market, 30

  growth rewarded by, 41

  increasing earnings rewarded by, 18

stock options, 12, 37, 47, 100, 138, 414,
see also
specific individuals

Stoel Rives, 274, 276

Stram, Bruce, 14

Strauss, Bill, 11, 12–13

streaming programming, 287

structured finance, 149, 238, 324, 380

Stulb, David, 383

Suez Lyonnaise des Eaux, 113, 247–48

sugar futures, 226

Sulentic, Steve, xiv, 18–19, 21

Sunbeam accounting scandal, 145

Sun Microsystems, 93, 243

Sun-tzu, 58

supply and demand, 268, 269, 273, 280

Supreme Court, U.S., 406

Sutton, Joe, xv, 111, 112, 247, 262

Swartz, Mimi, 358

Taco Bell, 176

take-or-pay agreements, 51, 103

Talon, 306–9

Tangier, 254

taxes, corporate, 87

TCEE (total consumer energy expenditure), 179

TCV (total contract value), 178–79

team players, 55, 56, 63

Techboard, 117

Teesside power project, 44, 48–54, 73, 75, 78, 79, 80–81, 93, 102–3, 175, 346

telecommunications, 185, 186, 231, 288, 315, 318, 320, 331

Temple, Nancy, xvi, 368–69, 381–82,
406

Tenneco, 402

Texaco, 16–17

Texas, 2, 11, 46, 174

  banking crisis in, 36

  as growth market, 11

Texas, University of, 57, 141, 153, 390

Texas A & M, 57, 146

Texas Commerce Bank, 162

Texas Journal,
319

Thailand, xxiv, 130, 131

Thatcher, Margaret, 48

TheStreet.com, 331

Thomas, Brownlee, 244

Thorn, Terry, 55

Thunderbird, 293

Tilney, Beth, xv, 190, 360

Tilney, Schuyler, xvii, 190, 200, 207, 234–35, 360, 370, 381, 410–11

Timberwolf, 308

Times of India,
81

Tirello, Edward, 229

Today,
416

Toronto Dominion bank, 152

total contract value, 178–79

total return swaps, 158

Tourre, Fabrice, 427

traders, trading, 42, 43, 85, 125–26,
151, 212–28, 283, 316, 324, 326, 330–31, 333, 334, 335, 338, 339,
345, 352, 379, 380, 387–88, 397, 403–4, 409, 413–14, 416, 420

  bonuses demanded by, 397–98, 409

  energy,
see
energy traders, energy
trading

  natural gas,
see
natural gas, traders and trading in

  power,
see
power traders, trading

Tranen, Jeffrey, 267

Transco Energy, 7–10, 46

Transportada del Sur, 74

transportation contracts, 38

Transwestern, 387

Traveler’s Insurance Group, 162

Treasury bonds, 157

Treasury Department, U.S., 385

Tunisia, 252

Turkey, 75, 158

TXU Europe, 227

Tyco, xxiv, 182, 413

UBS Warburg, 348, 409

Union Pacific Railroad, 69, 100

United Arab Emirates, 260–62

United Kingdom, 48, 222, 225, 249

Universal, 297

University of Colorado-Boulder, 425

upgrades, 237

Urquhart, John, xvi, 53, 96

U.S. Attorney, Enron Oil investigated by, 24

USFilter, 248, 256

utilities, 35, 36, 37, 38, 39

  as monopolies, 172, 176–77

  open-access rules for, 107

Valhalla, N.Y., 15, 17

Vance, Seth, 380

Vanguard, 319

Vaughn, Wendy, 422

venture-capital investments, 127, 190

video-on-demand (VOD), 188, 287–88, 291–99

Vietnam, 74, 77

Vietnam War, 5, 45, 51

Vinson & Elkins, 94, 123, 166, 168, 199, 305, 328, 356–58, 360–61, 384–85, 410, 416

Vivendi, 113, 247–49, 254

Wakeham, Lord John, xvi, 48, 50, 96

Walker, Charls, xvi, 13, 87, 96, 146

Walker, Pinkney, xvi, 5, 6, 7, 13, 87

Walker, Rick, xvii, 116, 200–202, 310

Wall Street Journal,
13, 159, 246, 258, 281, 319, 349–50, 360, 364, 370–71, 409, 420

Wal-Mart, 5

Walton, Sam, 5

Wasaff, George, 119

Wasden, Chris, xvi, 251, 254, 256

Washington, D.C., 5, 6, 9, 33, 86, 172–73, 265, 367, 419

Washington State Electric Commission, 221

Waste Management accounting scandal, 145, 147, 381

water business, 113, 260

water industry, 247

water trading, 290

Watkins, Sherron, xvi, 131, 140, 354–62, 366, 383, 384–85, 408

Watson, Chuck, xvii, 221, 241, 280, 391–92, 395–97, 399–403, 409–410

weather derivatives, 225, 388, 396

Weil, Jonathan, xvii, 319–20

Weil Gotshal & Manges, 390, 405

Weingarten, Jack, 134–35, 364–65

Weingarten, Lea,
see
Fastow, Lea

Weingarten, Lillianne, 365

Weingarten, Michael, 135, 365

Weingarten family, 134–35, 138, 168

Weingarten Realty Investors, 134

Welch, Jack, 46, 230

Wende, Steve, 385

Wessex, 113, 246, 247–55, 257, 258

West LB, 164

West Point, 7, 45, 51, 214

Wetmore, Kathy, 166

Weyerhaeuser, 202

Whalley, Greg, xvi, 214–20, 223–26, 228, 236, 264, 269, 283, 301, 302–3, 333, 334, 337–38, 352, 357, 395

  background and personality of, 214–15

  as COO, 359–60, 361, 373, 377, 378–79, 384, 387–91, 397–99, 401–2

  performance reviews of, 215

  at UBS Warburg, 409

  as wholesale CEO, 228

When Genius Failed,
219

White, Mark, 423

White, Tom, xvi, 51, 54, 73, 75, 76, 301, 302

  at EES, 175, 178

White House, xxii, 87

Whitewing, 155–56, 160, 169, 236, 249, 259, 261, 293, 354, 400

wholesale power, 172