Conspiracy of Fools (122 page)

5.
Details of Stewart’s reaction to the Raptor memos from the 302 of his Feb. 8, 2002, interview with the FBI and from his Sept. 25, 2001, e-mail to Cash, Duncan, and other members of the Enron team, “Enron Raptor Memos.” Also see the Batson Report, vol. 4, app. B, 104.

6.
Some details of the Glisan meeting from undated, handwritten notes taken by one of the participants. Also see the Wilmer, Cutler notes from the Jan. 18, 2002, interview with Tim Despain.

7.
Some details of the $2.6 million tax payment from the Wilmer, Cutler notes of its Nov. 19, 2001, interview with Mintz. Also see the Powers Report, 64–65.

8.
A copy of Fastow’s report to the finance committee from Aug. 13, 2001, was obtained by the author.

9.
Timing of the meeting at Lay’s office from his official schedule.

10.
Some details of the oral presentation by Vinson & Elkins from unsigned notes, “Outline Points to Discuss with Ken Lay and Jim Derrick,” Sept. 21, 2001, that were prepared for the meeting. Also see Eichenwald with Henriques, “Enron Buffed Image”; and an Oct. 10, 2001, and an Oct. 15, 2001, copy of the report from Vinson & Elkins, sent to Derrick, both headed “Preliminary Investigation of Allegations of an Anonymous Employee.”

11.
The Andersen meeting is disclosed in an e-mail that morning from Bonnie Lamberth of Andersen to Duncan, Stewart, and other Andersen employees. Duncan’s appearance in the video is revealed in the 302 of his March 21, 2002, interview with the FBI. See also the Batson Report, vol. 4, app. B, 53.

12.
A copy of the Bank of America margin call from Sept. 19 was obtained by the author. Also see Kurt Eichenwald, “A Company Man to the End After All,”
New York Times
, Feb. 9, 2003, Sunday Business, 1.

13.
A copy of the draft 21(a) report e-mailed by Pitt was obtained by the author.

14.
Some details of the meeting from the 302 of the FBI’s interview with Bass on Feb. 1, 2002. Also see Bass’s Sept. 25, 2001, e-mail to Cash, Duncan, and other members of the Enron team, “Raptor Memos.”

15.
A copy of the e-mailed questions from
The Wall Street Journal
was obtained by the author. Also see the Batson Report, vol. 3, app. C, 92.

16.
Quotes of the E-Speak conference on Sept. 26, 2001, from a transcript of the event.

17.
Some details of Temple’s first day of involvement on Enron from the 302 of her interview with the FBI on Feb. 13, 2002. Also see “Government’s
In Limine
Motion of Law,” filed April 29, 2002, in
U.S. v. Andersen
.

18.
Some details from notes of the Wilmer, Cutler interviews with Kaminski on Dec. 19, 2001; Shanbhogue on Dec. 20, 2001; and Bharati on Dec. 28, 2001. Also see the Sept. 2001 memo by Siurek and Ron Baker “Project Raptor—Addendum,” and the unsigned document from Sept. 2001 “Project Raptor, Proposed Alternatives.”

19.
The decision to only provide a written statement is demonstrated with the Sept. 27, 2001, e-mail “LJM Statement,” from Derrick to Dilg, with the attached statement that was intended to be provided to the
Journal
, and the reply of the same day, headed “68055 1. doc” from Dilg to Palmer, containing a revised statement.

20.
Some details of the discussion between Temple and Stewart from Stewart’s 302s from his Feb. 8, 2002, interview with the FBI, and Temple from her Feb. 13, 2002, interview. Also see Stewart’s May 30, 2002, testimony in
U.S. v. Andersen
and Temple’s handwritten notes from the conversation. Andersen’s document-destruction policy, dated Feb. 1, 2000, is titled “Client Engagement Information: Organization, Retention, and Destruction.”

21.
A copy of the Kaminski e-mail to Scardino was obtained by the author. Other details from notes of the Wilmer, Cutler interviews with Kaminski on Dec. 19, 2001; with Causey on Dec. 21, 2001; with Gordon McKillop on Dec. 20, 2001; as well as the 302 of Scardino’s interview with the FBI on Feb. 13, 2002.

22.
Some details of Kaminski’s run-in with Buy from notes of his Wilmer, Cutler interview on Dec. 19, 2001.

23.
Some details of the meeting from notes of the Wilmer, Cutler interviews with Kaminski on Dec. 19, 2001; Shanbhogue on Dec. 20, 2001; and Bharati on Dec. 28, 2001.

24.
Some details of the Andersen meeting in New Orleans from a package of materials provided to partners on their arrival at the Oct. 5 gathering.

25.
Some details of the audit committee’s Oct. 8, 2001, meeting from the official minutes and the agenda, as well as from Causey’s two presentations, “Third Quarter Earnings Update” and “Review and Update for Accounting for Goodwill.”

26.
Some details of the finance committee meeting of that same day from the official minutes.

27.
Some details of the full board meeting from Oct. 8 and 9, 2001, from the official minutes, as well as copies of the full presentations made by Enron Energy Services and Enron North America.

28.
A copy of Zajac’s Oct. 9, 2001, e-mail regarding the results of the FIDO test was obtained by the author.

29.
Details of the struggle with finance during Kaminski’s absence from notes of the Wilmer, Cutler interviews with Kaminski on Dec. 19, 2001, and Shanbhogue on Dec. 20, 2001.

30.
Details of the Oct. 10 “current topics” meeting from a videotape of the discussion. Also see the agenda, dated Oct. 10 and headed “Current Topics Agenda,” and the attendance sign-in sheet for the event.

31.
Some details of the discussion between Temple and Stewart from Stewart’s 302s from his Feb. 8, 2002, FBI interview, and Temple from her Feb. 13, 2002, interview. Also see Stewart’s May 30, 2002, testimony in
U.S. v. Andersen
.

32.
A copy of Temple’s Oct. 12 e-mail to Odom, “Document Rentention Policy,” was obtained by the author. Also see the 302 and the SEC’s notes from the Jan. 14, 2001, interview with Duncan.

33.
Duncan described the failed attempts to persuade Causey to drop the term “non-recurring” from the press release in an Oct. 15, 2001, memo to the file. Also see the notes of the Wilmer, Cutler interview with Bob Butts, the Enron controller, on Jan. 15, 2002, and Duncan’s Oct. 13, 2001, e-mail to assorted Andersen officials, “Press Release Verbage.”

34.
Details of Adlong’s morning on Oct. 15 from the 302 of her Feb. 5, 2002, interview with the FBI.

35.
Details of the final discussion between Causey and Duncan from the Oct. 15, 2001, memo to the
file written by Duncan, “Enron Press Release Discussions.” Also see the Oct. 16, 2001, e-mail from Temple to Duncan, “Re: Press Release Draft.”

36.
Details of Smith’s morning and her reaction to the Enron release from Smith and Emshwiller,
24 Days
, 105–9. Enron’s Oct. 16 release was headed “Enron Reports Recurring Third Quarter Earnings of $0.43 per Diluted Share.”

37.
Dialogue from the conference call from an official transcript.

38.
Some details of Emshwiller’s discussion with Palmer from Smith and Emshwiller,
24 Days
, 109.

39.
Smith’s decision to fast-forward through the recorded version of the analyst call from Smith and Emshwiller,
24 Days
, 114–15.

40.
The story by Emshwiller and Smith, “Enron Posts Surprise 3d-Quarter Loss After Investment, Asset Write-Downs,” appeared in
The Wall Street Journal
on Oct. 17, 2001, C1.

41.
The call from the short seller to Emshwiller, and the way he reacted to it, are described in Smith and Emshwiller,
24 Days
, 122.

42.
A copy of the Oct. 17, 2001, fax from the SEC to Rogers and Fastow at Enron was obtained by the author. Also see the 302 from the FBI’s Jan. 14, 2002, interview with Duncan.

43.
Some details of the locations of Lay and Causey from Lay’s itinerary, headed “3rd Quarter Analyst Reviews; October 16–19, 2001; Itinerary for Ken Lay.”

44.
The short seller call to Smith from Smith and Emshwiller,
24 Days
, 129.

45.
Details of Enron’s reaction upon hearing Smith’s statements about McMahon from the Vinson & Elkins notes from the Oct. 18, 2001, interview with McMahon. Also see the Batson Report, vol. 4, app. C, 169.

46.
The Emshwiller and Smith article, “Enron CFO’s Partnership Had Millions in Profit,” appeared in
The Wall Street Journal
on Oct. 19, 2001, C1.

47.
Some details of the Oct. 19 special board meeting from the official minutes.

1.
Some details of the managers’ meeting from the Wilmer, Cutler notes from Kaminski’s Dec. 19, 2001, interview.

2.
Details of Pitt’s speech before the AICPA from a videotape of the event.

3.
Corgel’s efforts to bring Riley into the Enron mess at Andersen’s Houston office from the 302 of the FBI’s interview with Riley on Feb. 14, 2002.

4.
Details of the special board meeting of Oct. 22 from the official minutes. Also see the Batson Report, vol. 4, app. D, 114, and the Senate hearings titled “The Role of the Board of Directors in Enron’s Collapse,” held before the Governmental Affairs Committee’s Permanent Subcommittee on Investigations on May 7, 2002.

5.
A copy of the company-wide e-mail was obtained by the author.

6.
Details of the preparation at Andersen for the Oct. 23 conference call from the 302 of the FBI’s Feb. 5, 2002, interview with Adlong. Also see the Cash 302 from the Feb. 5, 2002, interview and the SEC notes of the interview with Duncan on Jan. 14, 2002.

7.
Dialogue from the conference call from the official transcript.

8.
Enron’s stock performance from a price chart from Bloomberg, Oct. 23, 2001.

9.
Duncan testified about his disappointment in the Oct. 23 conference call during
U.S. v. Andersen
. Also see the 302s of the FBI interview with Duncan on March 21 and April 5, 2002; Adlong on Feb. 5, 2002; Roger Willard on Feb. 6, 2002; Grutzmacher on Feb. 15, 2002; Kate Agnew on April 4, 2002; and Bauer on Feb. 2, 2002. Also see the undated, unsigned report prepared in 2002 by lawyers for Andersen, entitled “Summary of Document Destruction Facts.”

10.
Dialogue at the employee meeting from a transcript of the event. Also see an undated memo from Lay to Enron employees, “All Employee Meeting.”

11.
The story read by Pitt was David S. Hilzenrath, “SEC Chief: ‘Gentler’ Agency,”
Washington Post
, Oct. 23, 2001, E1.

12.
Duncan testified about his effort to push compliance with the Andersen document policy during his testimony in
U.S. v. Andersen
. Also see the 302s of the FBI interviews with Duncan on March 21
and April 5, 2002; Adlong on Feb. 5, 2002; Willard on Feb. 6, 2002; Grutzmacher on Feb. 15, 2002; Agnew on April 4, 2002; and Bauer on Feb. 2, 2002; and the “Government’s
In Limine
Motion of Law,” filed April 29, 2003, in
U.S. v. Andersen. Also
see the testimony of Timothy McCann on April 11, 2002, before grand jury no. 02-2 in the case
Re: Investigation of Enron
.

13.
A copy of the Oct. 23 margin call from Bank of America was obtained by the author.

14.
Some details of the Whalley and Bowen meeting from both men’s schedules.

15.
Some details of the management committee meeting from entries in Lay’s schedule book.

16.
Details of the Duncan and LeMaistre call with Fastow from both men’s testimonies of May 7, 2002, before the Senate Governmental Affairs Committee’s Permanent Subcommittee on Investigations. A copy of their script, along with LeMaistre’s handwritten notes, was obtained by the author.

17.
The chaos that emerged as the reality of Enron’s finances was discovered was reconstructed from confidential interviews with a number of participants in these events.

18.
Details of the Oct. 24 board meeting from the official minutes. Also see the Lay e-mail of that day addressed to Enron worldwide, “Jeff McMahon Named CFO,” and the press release of the same day, “Enron Names Jeff McMahon Chief Financial Officer.”

19.
Some details of Watson’s phone call with Lay from undated, unsigned notes of interviews compiled by Dynegy’s lawyers from an interview with Watson.

20.
A copy of Suki’s Oct. 24, 2001, e-mail was obtained by the author. Also see the Batson Report, vol. 4, app. F, 34.

21.
Some details of Riley’s arrival from the 302 of his FBI interview on Feb. 14, 2002, and from the 302 of Duncan’s interview on Jan. 14, 2002.

22.
A copy of Watkins’s Oct. 24, 2001, e-mail to McMahon, “Your new CFO spot and the job I want,” was obtained by the author.

23.
Some details of the preparations for the Bergstrom-Horton lunch meeting from undated, unsigned notes compiled by Dynegy’s lawyers from an interview with Bergstrom.

24.
Some details of Riley’s encounter with Duncan while hearing the shredding from a 302 of Riley’s FBI interview on Feb. 14, 2002. Also see his June 3, 2002, testimony in
U.S. v. Andersen
.

25.
The retention of Shred-It from copies of invoices issued for the Houston office’s shredding assignment. Also see the Agnew 302 of the interview on April 4, 2002.

26.
Some details of the Plaza Club lunch from undated, unsigned notes compiled by Dynegy’s lawyers from an interview with Bergstrom.

27.
Enron’s announcement came in the release “Enron Continues as Market-Maker of Choice, Says CEO Lay; Transaction Volume Shows Strength of Core Businesses; Company Draws Down Credit Facility to Address Investor Concerns.” Some details of Emshwiller’s efforts on the Chewco story from Smith and Emshwiller,
24 Days
, 168–69.

28.
Some details of the discussions between Watson and Lay from undated, unsigned notes compiled by Dynegy’s lawyers from an interview with Watson.