The collapse of Enron's house of cards
<b>The collapse of Enron's house of cards</b>Surely at some time in its tawdry history, Enron or one of its myriad corporate affiliates must have produced, developed or delivered some product or service to someone who wanted it. But from reading Kurt Eichenwald's absorbing account of the rise and fall of the Houston-based energy company, one is likely to conclude that the sole mission of its top executives was to find quasi-legal ways of collecting money through stock sales and loans and keeping as much as possible for themselves. The chief players in this boardroom (and bedroom) drama are by now legendary: company founder Kenneth Lay, former CEO Jeffrey Skilling and ex-CFO Andrew Fastow. Fastow and his wife have been sentenced to prison; Lay and Skilling are awaiting trial.
Although Enron's story is more convoluted than a Medici revenge plot, Eichenwald, who covered the scandal for the <i>New York Times</i>, spins out the essential facts in quick, colorful scenes. He recreates the dialogue of the principal characters as convincingly as if he had been at their elbows taking notes. However, some of the scams Fastow devised to enrich himself are almost beyond understanding, a factor that helps explain why it took so long for this house of cards to tumble.
Eichenwald, author of the the 2000 bestseller <i>The Informant</i>, describes Enron as a triumph of concept over principle. Once an executive got an idea for a business deal no matter how far-fetched it was the next step was to bend the law, industry regulations and accounting principles to conform to that vision. By 1998, Eichenwald writes, This was a company . . . where the only impediment to pursuing a new business was initiative. The usual controls expense limits, financing constraints vanished. Of the many vivid scenes in the book, these two linger: on April 7, 1999, Lay announces that his company has pledged $100 million to name the new Houston Astros ballpark Enron Field. On Dec. 2, 2001, a paralegal in a Houston law office clicks the submit button to file papers to declare Enron officially bankrupt.