Enron: The Rise and Fall

"...Fox fills the void left by Lay and other Enron top dogs in swift, building-block fashion, producing a ground-up view of why the "Crooked E" colossus rose and fell. A sober and clear-eyed book, it's the more restrained of the two [compared to Pipe Dreams]. But it's not too restrained to pass up the chance to get in some good snarkfests over Enron's outsized egos and swagger—or remind us that its swagger is what most investors bought.... Fox places the unspooling of Enron in its market-history context, and his book has gravitas...."
—Barron's

"...Fox is a business writer based in New York who digs into how Andrew S. Fastow, Enron's former chief financial officer, set up special purpose entities that ultimately helped cause the company's downfall. Of the three books [including and Anatomy of Greed], this one offers the most detaile d explanation of Enron as a business."
—New York Times

"Enron: The Rise and Fall is the latest and perhaps most impressive of the recent crop of books about the collapsed energy giant . . . [Fox’s] candid, in-depth examination of Enron’s remarkable evolution, corporate culture and ultimate downfall is in itself remarkable for being both scrupulously detailed while remaining a clear and enjoyable read, even when dealing with the Byzantine complexities of the company’s financial engineering."
—ERisk.com "Book of the Month" review

"...a gripping read with plenty of lessons for companies that do not want to become victims of their own success..."
—Lloyds List

"AFTER the fall come the books. And nothing recently in the corporate world has fallen quite so spectacularly as Enron, the Houston-based oil-and-gas company that flew so high it made Icarus look like a grasshopper. Enron scorched to earth in December 2001 when it was forced to seek protection from its creditors under Chapter 11 of America's bankruptcy code. Thousands of employees lost their jobs and their pensions (largely invested in worthless Enron stock) while the designers and polishers of its wings of wax walked away with tens of millions of dollars each.
Not a pretty tale. Of the many tellings of it, these are currently the two most popular. In the absence of any input from the leading characters--the chairman and founder Kenneth Lay, the chief executive Jeffrey Skilling and the chief financial officer Andrew Fastow, all of whom are keeping mum in view of pending lawsuits--authors must tackle their subject somewhat indirectly. These two take rather different routes. Robert Bryce is a Texan journalist with a feel for the place and climate of his subject. He brushes past the (not inconsiderable) technical complexities of Mr Fastow's off-balance-sheet schemes and heads straight for the personalities. This is not "Dallas", but it's not far off. It's dead flat, air-conditioned Houston, where the town's big rich (and they don't get much bigger) live in River Oaks, a district whose architecture was once described as "Ralph Lauren meets Scarlett O'Hara". Enron's top executives all made it to River Oaks, and Mr Bryce obligingly provides us with a map to show where they are.
As he describes them, they are almost unremittingly awful. One of them that he met "reminded me that being a Texas-sized sphincter was valued at Enron". After a while, though, his litany of their adultery and greed seems unbalanced. Surely there were some redeeming features? Surely the whistle-blowing accountant, Sherron Watkins, was not merely seeking to further her own career when she exposed Mr Fastow's accounting tricks? And what about J. Clifford Baxter, the Enron vice-chairman who shot himself a year ago leaving a suicide note for his wife in which he said: "I have always tried to do the right thing, but where there was once great pride now it's gone...please try to forgive me." Mr Bryce leaves no room for atonement.
Loren Fox is a business writer who does not shy away from the complexities of Enron's business and financial dealings. On occasions, though, their details hold up the flow of his story. Especially before he gets really rolling with a perceptive chapter called "Culture of Creativity?" Here he describes the change in Enron's corporate culture, wrought largely by Mr Skilling who once said that he wanted his "best people to wake up at three o'clock in the morning in a cold sweat". And not because they'd left the air-conditioning on.
There is a peek into Enron's notorious twice-yearly Performance Review Committee meetings. Known as rank and yank, they consisted of a group of senior managers getting together in a hotel for a week or so, ranking employees according to various criteria, and then sacking the bottom 10-20% of them. But don't worry. The moral of the story is, it didn't work.
On one critical event in the Enron story both books agree. If there was a no-turning-back moment for the company it was the resignation in 1996 of the chief operating officer, Richard Kinder (pronounced "Kinnder" and referred to in one book as Rick and in the other as Rich, suggesting he has not talked to either author). Mr Kinder had been the hands-on counterbalance to Kenneth Lay's networking with the rich and powerful (President George W. Bush called him "Kenny Boy"). Mr Kinder kept a keen eye on the cashflow and frowned on extravagance. But he was replaced by Mr Skilling, whose eyes, as we now know, were elsewhere."
—The Economist, January 11, 2003 U.S. Edition

"...this one impresses by its sheer mass and wealth of detail..."
—Mortgage Finance Gazette

"…struck the right balance and given us a book, which is both entertaining and highly informative…"
—AccountingWeb

"…overall an excellent introduction to the Enron saga…"
—Global Turnaround