This review concludes a survey of a quartet of books devoted to a general treatment of the Enron Scandal. At 4:28 AM on December 2, 2001, lawyers for Enron filed for bankruptcy protection via Internet through the United States Bankruptcy Court in New York. At the time, Enron’s was the largest corporate bankruptcy to be filed, this after claiming $111 billion in 2000. Enron claimed debts in the tens of billions of dollars at the time of the bankruptcy filing. Enron’s graft and subsequent loss in their bankruptcy would be dwarfed by that WorldCom just eight months later on July 21, 2002.
Unlike WorldCom, which employed standard accounting malpractice, Enron set a new standard of graft by the misapplication of “mark to market” accounting (accounting for multiyear revenues in the first year of contract, no accrual accounting) advocated by Jeffery Skilling and the Andrew Fastow off-the-books special purpose entities to shift debt off of Enron’s books, making the company look better to investors. These illegal activities, coupled with the intense money-losing fiascoes of Rebecca Mark in Enron International and Azurix and Ken Rice in Enron Broadband and Enron’s fate was all but sealed early.
Since the dust settled from the Enron bankruptcy, many books have been written trying to explain, with differing levels of success, the course of events leading to the energy company’s demise. Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron by Bethany McLean and Peter Elkind concentrated on the inattention of CEO Ken Lay, the aggressive accounting of Jeffery Skilling and Richard Causey, the pornographically poor judgment of Rebecca Mark, and, necessarily, Fastow’s shell entities. This book was well-researched and fairly unbiased.
Pipe Dreams: Greed, Ego, and the Death of Enron by Robert Bryce, a Houston investigative reporter, is anything but unbiased. This is a beautifully jeering account, from a journalist’s perspective, of emotionally stunted geeks who struck it rich and were still not pleased. Pipe Dreams focuses mostly on Ken Lay and Jeffery Skilling, while giving the necessary attention to Fastow and the ultimate giant-killer. Also emphasized was the government and political relationships that existed between Enron and the Bush Family.