Conspiracy of Fools (123 page)

1.
Some details of the Bauer discussions with Faldyn and Siurek from Bauer’s Nov. 2, 2001, memo to the file, “Chewco Investigation.” Also see the 302 of Bauer’s Feb. 2, 2002, interview with the FBI.

2.
Mintz’s continuing efforts to move LJM2 out of the Enron offices are documented in an e-mail he wrote a few weeks before, dated Oct. 11, 2001, addressed to Derrick, and headed “LJM—Status Report.” A copy of Kopper’s separation agreement and release from Enron, dated July 23, 2001, was obtained by the author.

3.
Some details of the board’s Oct. 26 meeting from the official minutes.

4.
Some details of Causey’s discoveries about Chewco from Bauer’s Nov. 2, 2001, memo to the file and the 302 of Bauer’s Feb. 2, 2002, interview with the FBI. Also see the confidential notes from Causey’s Jan. 18, 2002, interview with staffers from the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.

5.
Timing of the lockout from the Oct. 23 all-employee e-mail. See also Enron’s official press release, “Enron Explains Basic Facts About Its 401k Savings Plan,” Dec. 14, 2001.

6.
Some details of the discussions between Watson and Lay from undated, unsigned notes compiled by Dynegy’s lawyers from an interview with Watson.

7.
Some details of the Chewco meeting from Bauer’s Nov. 2, 2001, memo to the file and the 302 of Bauer’s Feb. 2, 2002, interview with the FBI.

8.
Some details of McMahon’s conversations with Glisan from his Feb. 7, 2002, testimony before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.

9.
The article that infuriated Pitt was by Alex Berenson and Richard A. Oppel Jr., “One Mighty Enron Strains Under Scrutiny,”
New York Times
, Oct. 28, 2001, Sunday Business, 1.

10.
Details of Evans’s discussion with O’Neill from Eichenwald with Henriques, “Enron Buffed Image.”

11.
A copy of the Dynegy fax was obtained by the author.

12.
Some details of William Powers’s day from entries on his official schedule.

13.
Luna testified to his experiences with Thibault during his 2002 deposition in
Newby v. Enron et al.
, H-01-3624, filed in Federal District Court in Houston.

14.
Some details of the discussions between Bergstrom and Whalley from undated, unsigned notes compiled by Dynegy’s lawyers from an interview with Bergstrom.

15.
Details of Mordaunt’s admission to Derrick, and her subsequent interview on Oct. 30, 2001, with Wilmer, Cutler, from notes the lawyers took.

16.
Some details of Stulb’s encounter with Duncan from Stulb’s testimony of May 22 and 23, 2002, in
U.S. v. Andersen
.

17.
Some details of the discussion between Tarpley and Delainey from undated, unsigned notes compiled by Dynegy’s lawyers from an interview with Tarpley.

18.
Details of the Andersen discovery of the Chewco side letter, and its ramifications, from Bauer’s Nov. 2, 2001, memo to file; the 302 of Bauer’s Feb. 2, 2002, interview with the FBI; the 302 of Cash’s Feb. 8, 2002, interview; and the 302 of Duncan’s Jan. 14, 2002, interview. A copy of the side letter was obtained by the author, as was a listing that showed which box the document had been placed in. Also see the notes from Causey’s Jan. 18, 2002, interview with Congressional staffers.

19.
Some details of the board meeting from the official minutes.

20.
Some details of the merger discussions, including the disclosure of the Glisan scandal, from undated, unsigned notes complied by Dynegy’s lawyers from interviews with Fullenweider, Doty, Winters, and Watson.

21.
Some details of the Enron board meeting from the official minutes.

22.
Copies of the two conflicting press releases were obtained by the author. Also see the undated, unsigned notes compiled by Dynegy’s lawyers summarizing the findings of their interviews with the company’s executives, bankers, and lawyers.

1.
Some details of what Carter saw from the SEC Web site,
www.sec.gov
, and from the 8-K filed by Enron on Nov. 8. Also see the Nov. 8, 2001, e-mail from Lay to Enron employees, “SEC Information/Earnings Restatement.”

2.
A copy of the Andersen subpoena, issued Nov. 8, 2001, in the case
In the Matter of Enron Corp.
, HO-9350, was obtained by the author, as was a letter of that day from John Loesch, SEC senior counsel, to Andrew Pincus, general counsel of Andersen, which delivered the subpoena. Also see the Nov. 9, 2001, e-mail from Nancy Temple to Caroline Cheng and others at Andersen, “Enron Subpoena”; Adlong’s response that same day to a copy she received of the Temple e-mail; Adlong’s e-mail that same day to the engagement team, “No More Shredding”; Temple’s handwritten notes from meetings that day; and the FBI 302s of interviews with Adlong on Feb. 5, 2002; Temple on Feb. 13, 2002; Cash on Feb. 8, 2002; and the SEC notes from the interview with Duncan on Jan. 14, 2002.

3.
Some details about the Dynegy merger from an internal Enron document, “Talking Points—
11-9-01”; the joint press release issued Nov. 9, “Dynegy and Enron Announce Merger Agreement”; and the document of that same day “Merger FAQ’s (Internal).”

4.
Some details of the Rawhide debacle from Enron’s Nov. 19, 2001, 10-Q; annex 7 to the Nov. 14, 2003, report by Harrison Goldin, a court-appointed examiner in the Enron bankruptcy, filed in the United States Bankruptcy Court in Manhattan; and the Batson Report, vol. 3, 52.

5.
Some details from a tracking of the Enron daily stock price, as recorded on Bloomberg, for the period from Oct. 26 through Nov. 12, 2001. See also Enron’s Dec. 14, 2001, release, “Enron Explains Basic Facts About Its 401k Savings Plan.”

6.
Some details of the aftermath of the merger from the undated, unsigned notes compiled by Dynegy’s lawyers summarizing the findings of their interviews with the company’s executives, bankers, and lawyers.

7.
Some details of the demands that Lay surrender his severance from Richard A. Oppel Jr. and Floyd Norris, “Enron Chief Will Give Up Severance,”
New York Times
, Nov. 14, 2001, C5.

8.
Some details of the problems between the Enron and the Dynegy trading rooms from unsigned, undated notes compiled by Dynegy’s lawyers summarizing the findings from an interview with Schatzman.

9.
The change in position by Enron traders from the Dynegy lawyers’ interview notes with other traders; internal cash documents maintained with the Enron wholesale-trading division; and the 10-Q filed by Enron on Nov. 19, 2001.

10.
A copy of the draft 10-Q, as it existed on Nov. 16, 2001, was obtained by the author.

11.
Some details of the McMahon call, the response from Doty, and the wider response to the final copy of the 10-Q from the unsigned, undated notes compiled by Dynegy’s lawyers summarizing the findings of their interviews with the company’s executives, bankers, and lawyers. Specific financial information from comparisons between the final 10-Q, as filed on Nov. 19, 2001, and the draft that existed on Nov. 16, 2001.

12.
Some details of the luncheon meeting at the Coronado from unsigned, undated notes compiled by Dynegy’s lawyers summarizing the findings of their interviews with Watson.

13.
Enron’s stock price from historical price information maintained by Bloomberg.

14.
Some details of the discussions between Enron and Dynegy, including the talk between Whalley and Bergstrom, from the unsigned, undated notes compiled by Dynegy’s lawyers summarizing the findings of interviews with the company’s executives, bankers, and lawyers.

15.
Some details of Skilling’s Nov. 27, 2001, interview with Wilmer, Cutler from the lawyers’ notes of the meeting.

16.
Some details of the collapse of the Enron-Dynegy merger from the unsigned, undated notes compiled by Dynegy’s lawyers reflecting interviews with the company’s executives, bankers, and lawyers.

17.
Daschle’s statements from a transcript of his Nov. 29, 2001, press briefing.

18.
Dialogue at the Nov. 30, 2001, White House press briefing from the official transcript of the event.

19.
Some details of the Dec. 1, 2001, board meeting from the official minutes.

20.
Details of the Enron bankruptcy filing from Eichenwald with Henriques, “Enron Buffed Image.”

1.
Some details of the termination of Enron employees, and the aftermath, from David Kaplan and L. M. Sixel, “Enron Lays Off 4,000”
Houston Chronicle
, Dec. 4, 2001, A1.

2.
Some details of Skilling’s polygraph from a Dec. 4, 2001, report prepared by American International Security Corporation on subject “Jeffrey K. Skilling.”

3.
A transcript of Skilling’s testimony before the SEC was obtained by the author.

4.
Some details of the Dec. 4, 2001, McMahon interview with the House staffers from notes taken by Wilmer, Cutler lawyers who attended the discussion.

5.
Details of the discussions before Congress from the official transcript of the Dec. 12, 2001, hearings titled “The Enron Collapse: Impact on Investors and Financial Markets,” before two subcommittees of the House Financial Services Committee: the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises and the Subcommittee on Oversight and Investigations.

6.
The unfamiliarity of the team that helped craft Berardino’s statements to the congressional panel was revealed in Berardino’s letter of Jan. 21, 2002, to Representative Michael Oxley, chairman of the Financial Services Committee, in which he explained that he had made certain technical errors in his presentation about Chewco. Those errors occurred, he said, because the officials helping with his statements did not have the familiarity with Chewco that members of the Andersen team on the Enron account did. Finally, a review of all of Duncan’s appearances before the Enron audit committee shows no instance in which he alerted the directors to possible illegal acts, and no documents filed with the committee by Andersen maintaining such a claim. However, the statement did accurately reflect Andersen’s opinion at the time, and it is possible that the opinion could have been shared informally with a member of the audit committee; that, however, would not rise to the level of official notification.

7.
Details of the Boies press conference from Laura Goldberg and Ralph Bivens, “Enron’s Former CFO Surfaces,”
Houston Chronicle
, Dec. 13, 2001, Business, 1; David S. Hilzenrath, “Auditor Hints of ‘Illegal Acts’ at Enron,”
Washington Post
, Dec. 13, 2001, E1; Jessica Sommar, “Enron Ex-CFO Hires Top Defense Lawyer,”
New York Post
, Dec. 13, 2001, 42. Other details from photographs taken at the briefing.

8.
Timing of the Berardino call from an entry in Lay’s schedule.

9.
Some details of the Fastow/Kopper meeting from Kopper’s Sept. 27, 2004 testimony in
U. S. v. Bayly et al
.

10.
Some details of Glisan’s efforts to secure a cooperation deal, from Kurt Eichenwald, “Enron Executive Said to Be Aiding in Federal Inquiry,”
New York Times
, Feb. 26, 2002, A1. Also see Glisan’s testimony of Oct. 6, 2004, in
U.S. v Bayly et al
.

11.
Some details of Andersen’s discovery of the e-mail destruction, and Berardino’s subsequent involvement, from Kurt Eichenwald, “Miscues, Missteps, and the Fall of Andersen,”
New York Times
, May 8, 2002, C1.

12.
Some details of the Oval Office meeting from Ron Suskind,
The Price of Loyalty
(Simon & Schuster, 2004), 203–7.

13.
Details of Bush’s meeting in the Oval Office with reporters from a White House transcript, “Remarks by the President in Meeting with His Economic Team,” Jan. 10, 2002.
648
Details of the Jan. 10, 2002, press briefing from the official transcript.

14.
Andersen’s Jan. 10, 2002, press release was headed “Andersen Notifies SEC, Justice Department, Congress That a Significant but Undetermined Number of Enron-Related Documents Were Disposed Of.” The follow-up press release that day was headed “Additional Andersen Statement on Enron-Related Documents.”

15.
Ann Richards’s statements from a transcript of the Jan. 30, 2002, broadcast of
Larry King Live
on CNN.

16.
Details of Adlong’s conversation with Duncan from a transcript of her testimony in March 2002 given as part of an inquiry by class-action lawyers suing Enron to determine the scope of Andersen’s document destruction. See also Kurt Eichenwald, “Andersen Misread the Depths of the Government’s Anger,”
New York Times
, March 18, 2002, A.

17.
The
Washington Post
article, by Peter Behr, ran on p. A1 on Jan. 12, 2002.

18.
Details of Duncan’s first meeting with the government on Jan. 14, 2002, from the 302 prepared by the FBI agents in attendance, and by the SEC notes of the interview prepared as a memo for the file by Beth Lehman from the agency. Copies of Duncan’s agreements with both the SEC and the Justice Department, which allowed for his cooperation on this day, were obtained by the author.

19.
Details of the Jan. 14, 2002, letter from Tauzin and Greenwood to Lay from the original document.

20.
Some details of the response to the Tauzin and Greenwood letter, and the comment from Johnson, from several news articles, including Don Van Atta Jr. with Alex Berenson, “Enron’s Chairman Received Warning About Accounting,”
New York Times
, Jan. 15, 2002, A1; and James Kuhnhenn, “Enron’s Chairman Was Warned of Impending Crash, Memo Shows,” Knight Ridder, Jan. 15, 2002.

21.
Some details of the events surrounding the Duncan dinner where he learned of his termination by Andersen from a 302 of his March 21, 2002, interview with the FBI.