Conspiracy of Fools (113 page)

15.
Details of the Shiv Sena rally from Madhu Nainan, “Foreign Investors Jittery as Hindu Militants Take Charge in Bombay,” Agence France Presse, March 19, 1995. Also see Emily MacFarquhar, “A Volatile Democracy,”
U.S. News & World Report
, March 27, 1995, 36.

16.
Background of Thackeray from John F. Burns, “A Violent Goal: Hindustan for Hindus,”
New York Times
, Nov. 3, 1995, A6; Burns, “Another Rushdie Novel, Another Bitter Epilogue,”
New York Times
, Dec. 2, 1995, sec. 1, 1; Julia Eckert, “The Charisma of Autocracy,”
Manushi
, issue 130 (2002); and Praveen Swami, “Let Off, for Now,”
Frontline: India’s National Magazine, Aug
. 5–18, 2000. Details of Thackeray’s relationships with violent mobs from “Demagogue of Hate,”
Asia Week
, Dec. 29, 1995; Ajay Singh, “The Emperor’s Troubles,”
Asia Week
, Sept. 13, 1996; and “Little Hitler Calls the Shots,”
South China Morning Post
, Nov. 13, 1995, 19.

17.
Details of the World Bank findings from its April 30, 1993, report, which was forwarded to the Indian Secretary of Finance.

18.
Enron’s decision to respond to the World Bank report by hiring a public-relations firm from a June 28, 1993, letter written by Joseph Sutton from the international division to Ajit Nimbalkar, chairman of the Maharashtra State Electricity Board.

19.
Total amount spent on education in India by Enron from the testimony of Linda F. Powers, vice president of global finance with Enron Development Corporation, before the Foreign Operations Subcommittee of the House Committee on Appropriations, Jan. 31, 1995.

20.
Some details of Jim Alexander’s efforts, and his conversation with Kinder, from John Schwartz, “An Enron Unit Chief Warned, and Was Rebuffed,”
New York Times
, Feb. 20, 2002, C1. Also see Julian E. Barnes, “How a Titan Came Undone,”
U.S. News & World Report
, March 18, 2002, 26.

21.
Details of Burns’s new job from “Union Pacific Railroad Brings in an Outsider,” Associated Press, July 28, 1995.

22.
Details of the Lay and Mark trip to India and Matoshri from a copy of Lay’s personal itinerary from Oct. 20 through Nov. 3, 1995.

23.
Details about India, its culture, and its political circumstances come from an assortment of sources, including interviews. Basic information came from David Collins’s book,
Mumbai (Bombay
) (Lonely Planet, 1999). A more complete picture of the country and its economic forces came from Gurcharan Das,
India Unbound
(Knopf, 2001), and John Keay,
India: A History
(Grove Press, 2001). Additional information from Burns, “A Violent Goal.”

24.
Some descriptive details of Matoshri from a series of external and internal photographs of the residence obtained by the author, including one taken during the meeting between Lay, Mark, and Thackeray.

25.
The death of Meena Thackeray was described by Naresh Fernandes, “Wife of Maharashtra State’s De Facto Leader Dies,” Associated Press Worldstream, Sept. 6, 1995.

26.
The article read by Clinton was by Allen R. Myerson, “Tentative Pact Allows Enron to Continue Project in India,”
New York Times
, Nov. 22, 1995, C1. Clinton’s reaction to the article was first reported by Michael Weisskopf, “That Invisible Mack Sure Can Leave His Mark,”
Time
, Sept. 1, 1997, 21. Weather conditions were obtained from records on file with the National Climatic Data Center.

27.
Some details of the plant renegotiations from Mehta,
Power Play;
Minority Staff, U.S. House of Representatives, Committee on Government Reform, “Background on Enron’s Dabhol Power Project,” Feb. 22, 2002; and Inkpen, “Enron and the Dabhol Power Company,” and “Enron Development Corporation,” 1996.

1.
Some details of the atmosphere and style at Armando’s from Eric Lawlor, “Armando’s Gets a New Chef—and a New Attitude,”
Houston
Press, Jan. 8, 1988.

2.
Some details of Fastow’s work and role within the retail unit from a May 1, 1996, e-mail he wrote, which included a draft memo for distribution discussing his role.

3.
Some descriptive details of Portland’s World Trade Center and surrounding areas from Bill Greer, “At Peace in Portland,”
The Tennessean
, Sept. 12, 1999, Travel 1. Some details of their discussion from a Schedule 14A proxy statement filed with the SEC by Portland General on May 21, 1997, 24–25.

4.
Some details of Kaminski’s background from the notes of his interview with lawyers from Wilmer, Cutler & Pickering, Dec. 19, 2001.

5.
Some details of Watkins’s background and experiences at Enron from the book she wrote with Mimi Swartz,
Power Failure
, 72–75.

6.
Watkins acknowledged her salty tongue in
Power Failure
, 12.

7.
A copy of Beerel’s undated analysis was obtained by the author.

8.
A copy of Fastow’s untitled report to Skilling was obtained by the author.

9.
Some details of the management committee meeting from a set of unsigned notes contained in Enron’s official files and obtained by the author.

10.
Some details of the Phoenician meetings between Enron and Portland General from the May 21, 1997, Schedule 14A proxy statement, 27–28. Anita Marks, “Enron Deal: A Marriage Made in Phoenix,”
Business Journal
—Portland, July 26, 1996, 1. Additional information about the merger from an internal Calpers analysis, prepared for the pension fund’s investment committee by the Pacific Corporate Group, Aug. 19, 1996.

11.
Some details of Lay’s meeting with Portland General employees from Bill MacKenzie, “Big Guy in Town Makes Big Power Play,”
Oregonian
, July 27, 1996, E1. Also see MacKenzie, “PG Employees Optimistic,”
Oregonian
, July 24, 1996, C1.

1.
Details of Lay’s trip to Morristown from the flight plan filed by the pilots. Information about the plane from the official records for the aircraft maintained by Enron.

2.
Some details of Wilson’s signing of the electricity deregulation bill from “California Set for Massive Electric Deregulation,” Reuters, Sept. 24, 1996. Also see “SD Electric Law,” City News Service, Sept. 23, 1996. Information about the legislation itself was found at
www.energyquest.ca.gov/time_machine/1990ce-2000ce.html
.

3.
Information regarding the structure of the California electricity system from Will McNamara,
The California Energy Crisis: Lessons for a Deregulating Industry
(Penn Well, 2002); and James L. Sweeney,
The California Electricity Crisis
(Hoover Institution Press, 2002). Also see the March 2003 report prepared by the staff of the Federal Energy Regulatory Commission, “Final Report on Price Manipulation in Western Markets,” docket no. PA02-2-000.

4.
Details of the basement inspection, and the technician’s failure to properly use the equipment, from records produced in the National Transportation Safety Board’s investigation of the San Jaun explosion, as well as the final NTSB report, “Pipeline Accident Report: San Juan Gas Company Inc. Enron Corp. Propane Gas Explosion in San Juan, Puerto Rico, on November 21, 1996,” PB97-916501 NTSB PAR-97/01. The company’s history of safety violations, and the total fines it paid, from the NTSB report.

5.
Details of the San Juan explosion, and the events surrounding it, from redacted copy of testimony before the NTSB, as well as the final report, “Pipeline Accident Report.” Also see Hilario de Leon, “Explosion Turns Day into Night on Busy Street,” Associated Press, Nov. 21, 1996.

6.
Some details of the board’s decision on Lay and Kinder from Lay’s employment contract, Dec. 18, 1996.

7.
Some details of Kinder’s decision to leave Enron from Michael Davis, “Lay Staying, So Kinder Will Leave,”
Houston Chronicle
, Nov. 27, 1996, Business, 1.

8.
Details of the party at the Museum of Natural Science from planning and billing records obtained by the author. Some descriptive information from the Web site for the Houston Museum of Natural Science,
www.hmns.org
.

9.
Some details of Skilling’s elevation from the company’s official announcement, Dec. 10, 1996.

1.
Some details of the unveiling of the new corporate logo from Enron’s official announcement of Jan. 14, 1997. Other details from Skilling’s schedule book for that day.

2.
Some details about the selection of Duncan as the lead member of Andersen’s Enron engagement team from a Form 302—the FBI notes of an interview—for D. Stephen Goddard Jr., reflecting his statements to Special Agents Greg Ruppert, Paul Holdeman, and Paula Schanzle, Feb. 28, 2002. The notes are part of case file nos. 196C-HO-59147 (the Enron investigation) and 196C-HO-59147-AA (the Andersen inquiry).

3.
Details of Duncan’s background, including his purchases for the co-op and use of illegal drugs both during and after college, from a series of his FBI 302s in cases 196C-HO-59147 and 196C-HO-59147-AA. These include notes from interviews conducted by Special Agents John S. Hummel and David Michael Hays on Jan. 14 and 16, 2002. They also include notes from interviews conducted by Special Agents James E. Jewell and Paul Holdeman on March 21 and April 5 and 6, 2002.

4.
Some details of Bass’s background from his FBI 302 from his interview of Feb. 1, 2002, with Special Agent Omer Meisel.

5.
Some details of the Enron and Calpine deal from the Calpine press release of March 31, 1997, “Calpine to Acquire Interest in 827 MW of Gas-Fired Power Plants.” No similar release was issued by Enron.

6.
Some details of Fastow’s effort to bring friends into deals, and the creation of Alpine Investors, from a government affidavit of Special Agent Omer Meisel, filed as part of a criminal complaint against Fastow on Oct. 1, 2002, at Houston’s Federal District Courthouse, case no. HO-2-889-M. Also see the internal Andersen 1997 document “Joint Ventures, SPE’s, Partnerships.”

7.
Melcher’s role as an investor with Fastow was revealed by a number of sources, including the notes of the Jan. 12, 2002, interview with Kristina Mordaunt by Wilmer, Cutler. Also see the Wilmer, Cutler notes from the Dec. 6, 2001, interview with Carol St. Clair, an assistant general counsel with Enron.

8.
Some background of Mintz and details of his job from a copy of his executive employment agreement with Enron Capital & Trade Resources Corp., Dec. 1, 1997.

9.
Some details about the collapse of Alpine Investors, and its replacement by the RADR structure, from the Oct. 1, 2002, Meisel affidavit.

10.
Some details of the May 14, 1997, presentation to Calpers from the report used by Fastow, “Discussion with Calpers.” Also see a confidential May 27, 1997, memo prepared by Sheryl Pressler for Barry Gonder of Calpers, “Comparison of the Proposal Made by Enron to Staff Concerning a New Relationship Versus What PCG Has Communicated to Staff,” which summarizes the events of May 14, as well as a draft, unsigned memo to Pressler from Enron Capital Management, May 29, 1997. Also see details from the June 10, 1997, meeting within Enron about the Calpers presentation, as shown in unsigned, handwritten notes taken in a meeting that included Fastow and Jeremy Blachman, an executive in the finance division.

11.
Bill Brown described his early role in the special-projects group during his Dec. 5, 2001, interview with lawyers on the Wilmer, Cutler team. Copies of the official notes from that interview were obtained by the author.

12.
Some details of Glisan’s background from his employment application with Enron, dated Aug. 1996, as well as his résumé. Also see Glisan’s Commercial Support Performance Review, Sept. 3, 1996.

13.
Some details of Astin’s review of the investment proposal from the notes of his interview with Wilmer, Cutler, Dec. 11, 2001. Other details from Wilmer, Cutler’s notes from the Jan. 11, 2002, interview with Mordaunt, and also from the firm’s notes of the Dec. 6, 2001, interview with St. Clair. There were what appeared to be some factual conflicts between Astin’s and Mordaunt’s accounts—unless Mordaunt was describing subsequent meetings, many of which took place that summer. However, the
author reviewed contemporaneous handwritten notes taken during the summer of 1997 that confirmed Astin’s account of the events portrayed here.

14.
The problems with the Portland General contract were revealed in the minutes of Enron’s audit committee meeting on Oct. 12, 1998. Ultimately, those numbers were disclosed by Enron in its Nov. 8, 2001, announcement of its intent to restate its financials, dating back to 1997.

15.
Some details of Enron’s initial forays into broadband from the company’s April 22, 1998, release, “First Point Communications Inc. and Optec Inc. Join Forces to Become Enron Communications.”

16.
Some details of the wire transfer from the criminal information filed Aug. 21, 2002, in
United States of America v. Michael J. Kopper
, no. H-02–0560, in the Federal District Court in Houston, as well as the criminal complaint filed in
United States of America v. Andrew S. Fastow
, no. H-02-889-M, filed in the Federal District Court in Houston, Oct. 1, 2002. Also see the superseding indictment in the case of
United States of America v. Andrew S. Fastow et al.
, no. H-02-0665, filed on April 30, 2003. Also, the author reviewed copies of wire-transfer documents used in the transaction.

17.
Some details of Astin’s response to his review of Sept. 4 from the notes of his Dec. 11, 2001, interview with Wilmer, Cutler. Also see
Final Report of Neal Batson, Court Appointed Examiner
, vol. 4, app. C, 111, filed in the case of
In re Enron Corp. et al
. filed in U.S. Bankruptcy Court for the Southern District of New York, case no. 01-16034 (the Batson Report).