The Enron Disgrace Essay -- essays research papers

The Enron Disgrace: Abstract: Ray Bowen, a Citigroup banker at the time and now Enron's chief financial officer, once asked Mr. [Andrew Fastow] about a batch of complex equations that filled a whiteboard in the conference room next to the Mr. Fastow's office. "You can't tell me you understand those equations," Mr. Bowen commented to Mr. Fastow. Mr. Fastow replied: "I pulled them out of a book to intimidate people." The Fastows headed to Mrs. Fastow's native Houston in 1990, both taking jobs at a young company called Enron. Just five years old, Enron was starting to evolve from a natural-gas and pipeline company into a trading firm. Mr. Fastow was one of the first managers hired by Mr. [Jeffrey Skilling], who himself had only recently arrived, from management consultants McKinsey & Co. Brought into Mr. Skilling's inner circle, Mr. Fastow returned the loyalty, telling colleagues he had named a child after his mentor. When Mr. Skilling became Enron's president and chief operating officer in early 1997, he and Mr. [Kenneth Lay] promoted Mr. Fastow to lead a new finance department. A year later, Mr. Fastow became chief financial officer. LJM employees used Enron office space and were on its phone system. When a call came from LJM, Enron employees would have no reason to know the person on the line was representing LJM unless he or she said so. In mid-2000, as Enron Broadband Services was negotiating to sell some fiber-optic cable to LJM2, an LJM2 employee named Anne C. Yaeger called the Enron unit and grilled it about Enron's valuation of the cable, without identifying herself as an LJM staffer, according to a former employee familiar with the matter. Full Text: Copyright Dow Jones & Company Inc Aug 26, 2002 When Enron Corp. was riding high, Chief Financial Officer Andrew Fastow had a Lucite cube on his desk supposedly laying out the company's values. One of these was communication, and the cube's inscription explained what that meant: When Enron says it's going to "rip your face off," it said, it will "rip your face off." It was a characteristic gesture inside Enron, where the prevailing corporate culture was to push everything to the limits: business practices, laws and personal behavior. At Enron's London office, lavishly paid executives submitted blind e-mail bids for the 18 parking places. One of them paid $... ...FO at the Houston airport. While Mr. Fastow's parents were undergoing a random search, he stopped to chat with Mr. Schwieger. "I never got an opportunity to explain the partnerships to you," he said, according to Mr. Schwieger. Mr. Schwieger replied, "With everything that has come to light, I probably wouldn't like the answer I would have gotten." --- Fastow's Footsteps Tracing Andrew Fastow's career at Enronn 1990: Fastow joins Enron, an early hire by Jeffrey Skilling. -- January 1997: Chief Executive Kenneth Lay and Skilling, promoted to president, name Fastow head of new finance department. -- March 1998: Fastow named chief financial officer. -- June 1999: Skilling and Fastow tell board of plan for new partnership known as LJM Cayman. -- Late 1999 to early 2000: Fastow raises nearly $400 million for LJM2 partnership. -- Oct. 16, 2001: Enron says it will take $1.01 billion charge against earnings. -- Oct. 24, 2001: Fastow is put on leave. -- Aug. 21, 2002: Michael Kopper pleads guilty to money laundering and wire-fraud conspiracy, says he kicked back money to Fastow. Prosecutors seek order to seize $23.6 million from Fastow and associates.