21,000 jobs lost, pensions
evaporated, and 180,000 investors bilked
From Two Small Gas Companies To
A World Powerhouse
Enron's growth was spectacular
Ken Lay Was The Little Mench
That Started It All
From a 1970 Federal regulator, to a
a small oil company executive, to King of
the world
Lay's Superstar - Jeffrey Skilling
Second in command
The Real Criminals Were
The Fastows
Lea and Andy
Andy And Lea Fastow Turned
State Evidence
Two Krakow back alley swindlers, that
played dumb
Who Really Is Responsible?
Just how does a $66 billion dollar swindle happen? Where
were the auditors, the SEC, the financial staff, and the directors, the
banks, the security houses?
Arthur Andersen was Enron's internal,
and external auditor, was part of the fraud. The SEC never investigated
any complaints, and the directors picked up fees, and stock options.
What happened was, a little Mench named Tom Lay hired some slick Harvard
MBAs, they loaded the key spots with fellow con artists, and took
everyone to the cleaners.
Enron
Enron, the 5th largest US company, was formed in 1986 when Ken Lay
merged two small gas companies, Internorth and Houston Natural Gas
merged. The scheme starts in
1987, when a young Jewish financial wizard, Jeffrey Skilling, who was an Enron
consultant approached Ken Lay with some hedging strategies, on gas
contracts. In 1990, Lay hires Skilling as the CEO of Enron Finance Corp.
Next, Skilling hires Fastow as the financial officer for Enron.
Fastow is basically a con artist, who was involved involved in the 1980's S &
L collapse of First Continental. For the
next 12 years, Skilling allows Fastow to infest Enron with his cronies.
This group cooks the books, and the stock goes from $300 million to $65 billion.
In the early 1970's he was a government bureaucrat, a federal regulator, and in
1979 he becomes involved in Houston Natural Gas. In 1985 he merged Houston
Natural Gas Co. with Nebraska-based Inter-North.
Lay earned $42.4 million in 1999. From 1989 to 2001, he liquidated
more than $300 million in Enron stock. At the trial, Lay came across
as a likeable
little Mench, but all of
Houston was ready to hang him, and his socialite wife.
Actualité juive insists
that neither she nor her husband is Jewish, she was the yearly biggest
donor of the Houston Holocaust Museum.
Jeffrey Skilling
Skilling, a Harvard MBA, worked at Enron in the mid-1980s, as a McKinsey consultant.
In 1987, Skilling helped the company
create a
forward market in
natural gas.
Enron hired him in 1990 and he soon refocused the company from hard
assets, such as pipelines and power plants, to a major player in
financial contracts and derivatives. In 1996 Skilling becomes Enron's
president, and sits on the company's board of directors.
In 1999, Enron launched
EnronOnline, an Internet-based trading operation, which was used by
virtually every energy company in the U.S.
In February 2001, he was named officially named CEO.
As their scheme drew to a close, Skilling played the mental card,
staging televised arguments, and literally attacking pedestrians. He
claims he had a mental breakdown.
Andy Fastow
Fastow
was a con man from the 1980 S&L crisis. His specialty
was raising capital by selling
notes backed by risky loans. He worked at the Continental Chicago bank,
and grabbed millions. Skilling
hired him in 1990 after Continental Illinois collapse, the largest U.S. bank
failure of the mid-'80s S&L bust. Fastow was the man Skilling
needed, and became known as "Skilling's
fair-haired boy".
Beginning in 1993, Fastow
created hundreds of "special-purpose entities" designed to transfer
Enron's debt to an outside company, and get it off the books, without
giving up control of the assets that stood behind the debt.
The Fastows drained untold
sums, but like all con artists, they kept a low profile, living a modest
lifestyle.
Once the company collapsed, and
the authorities moved in, Fastow agreed to cooperate with authorities, he
helped in the
prosecutions of other former Enron executives. Fastow, although convicted, remains out of prison until
completion of the various prosecutions.
Fastow brought in at least six other
people, some with working spouses, that help facilitate the swindle. He admits to making $42 million.
Micky Koppel
Lea Fastow
She was said to be involved in recruiting six other 'un-named insiders'
that helped with the scheme. On May 16 she was sentenced to a year
at a federal prison, and a year at a half way house.
It is thought that the pair skimmed $250 million, which made a year in a country club
jail a small price. Fastow and Lea (nee Weingarten), met at Tufts, and
were soon married. The Weingaten family built a supermarket and real estate empire,
and were notorious in Houston.
Arthur Anderson LLC - Enron's Accountants
Arthur Anderson was two companies, one was
accounting, and the other consulting. In 1999 the partners decided to
split the company, and the consulting part morphed into a new company called
Accenture.
After the Enron accounting debacle in 2001, the accounting part
went under.
Next the NY partners decided to take Accenture public, but first drained all the cash. Today Accenture
has a market value of
$24 billion
, and the partners still retain 35%.
It's based in Bermuda for income tax
purposes, but is headquartered in New York, and receives close to a billion
dollars in
US government contracts.
Morris Greene, CEO
Directors
Robert Belfer, and Rueben Lawrence, who were related, sat in the
board, and
owned
at least 48% of the preferred stock. They owned Belco Petroleum,
which merged with Enron in 1990.
Rueben Lawrence
Robert Belfer
The Securities And Exchange Commission
Their job is to guard against stock market scams. After the fact,
they charged
employees Lebow, Cohen, Fastow, Skilling, Koenig, etc with fraud.
The Banks
Just the
Export-Import bank alone lent Enron $650 million. Creditors,
and liability holders, are in for
tens of
billions.
How does a bank lend $1 billion, without checking the solvency,
unless it is a friendly deal?
The Security Houses
Firms like Merrill, Goldman Sachs, Lehman Brothers, were peddling this
stock, but never took the time to see a total fraud it was. A few were
indicted.
Swindles of this magnitude don't just happen without a lot
of people being involved. A Mexican that steals a can of tuna from a 7/11
goes to jail for two years, but these 'Krakow Swindlers' who stole
billions, won't even get their names in the newspapers.
Their little 'Hatchlings' will get that scholarship to
Harvard. But, Sandy Dennison from Butte Montana, who joined the army for
college tuition, is
killed at a checkpoint, thanks to Tommy
Frank, and his Israeli advisors.
