7. Some details of these discussions from Sanders’s July 9, 2002, testimony before the CFTC and the FERC, 33–36.
8. Some details of the conversations between Haedicke and Yoder from Yoder’s deposition before the CFTC and the FERC on June 7, 2002, 35–40.
9. Details of Zisman’s conversations with Haedicke from notes of his Dec. 12, 2001, interview with Wilmer, Cutler. Also see Zisman’s sworn statement of April 21, 2003, to lawyers with Alston & Bird; the Batson Report, vol. 4, app. C, 143–44; and notes of Haedicke’s Jan. 21, 2002, interview with Wilmer, Cutler.
10. Timing of Baxter’s visit from an entry in Skilling’s appointment book.
11. Some details of the SEC’s struggles with Capitol Hill over the accounting proposal from Levitt, Take on the Street, 132–34.
12. The collapse of Project Summer is reflected in the flurry of activity involving the board of directors. On Sept. 15, Rebecca Carter, the corporate secretary, sent out notification by fax to the directors calling for a special board meeting on Sunday, Sept. 17, according to the original documents. Included in that invitation was an updated packet of material on the economics of Project Summer. However, with the deal still struggling, the meeting was postponed on that Sunday, followed by the collapse of Project Summer the next morning.
13. Some details of Weil’s reporting effort from Scott Sherman, “Enron: Uncovering the Uncovered Story,” Columbia Journalism Review, May/June 2003. Also see Jonathan Weil, “Energy Traders Cite Gains, but Some Math Is Missing,” Wall Street Journal (Texas Journal), Sept. 20, 2000.
14. A copy of the Duncan letter written for Lay was obtained by the author. Some details of the letter from Duncan’s testimony of May 15, 2002, in United States of America v. Arthur Andersen LLP, criminal action no. H-02-121 in Federal District Court in Houston. Also see Duncan’s Sept. 11, 2000, e-mail to Jeffrey Peck of Andersen, headed “Enron SEC Letter.”
15. Some details of Chanos’s efforts from his testimony of Feb. 6, 2002, before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations. Also see Jonathan R. Laing, “The Bear That Roared,” Barron’s, Jan. 28, 2002, and McLean and Elkind, Smartest Guys in the Room, 319–21.
16. Levitt described his efforts to reach out to Berardino in Take on the Street, 134–36.
17. Timing and some details of the Davis and Skilling call from handwritten notes taken during the conversation and from an entry in Skilling’s schedule.
18. Some details of the Portland meeting from the FERC and CFTC testimony of Sanders on July 9 and 10, 2002; Yoder on June 7, 2002; and an undated transcript of the Hall testimony. Also see unsigned, handwritten notes of the meetings of Oct. 3 and 4, 2000, and the billing records of Stoel Rives for Oct. 1–31, 2000, as reflected in the invoice issued by the firm to Enron North America, Nov. 27, 2000.
19. Yoder described his encounter with Forney in his June 7, 2002, testimony before the FERC and the CFTC.
20. Some details of the accident in Palm Beach from “Palm Beach,” Palm Beach Post, Oct. 7, 2000, 2B.
21. Details of the Oct. 7 meeting of the Compensation and Management Development Committee from the official agenda and minutes, as well as handwritten notes taken by the corporate secretary.
22. Some details of the Oct. meeting of the finance committee from the official agenda and minutes, as well as handwritten notes taken by the corporate secretary. Also see the presentations at that meeting titled “Chief Financial Officer Report” and “LJM3.” Also see the Wilmer, Cutler notes from the Nov. 30, 2001, interview with Causey; the Jan. 29, 2002, interview with Blake; and the Nov. 27, 2001, interview with Skilling; as well as the Batson Report, vol. 4, app. D, 145.
23. Some details of the Oct. 7 board meeting from the official agenda and minutes, as well as handwritten notes taken by the corporate secretary.
24. Some details of the meeting with Fastow from entries in Mintz’s personal schedule book, which he used to take notes. Copies of the LJM approval sheets were obtained by the author. Some details of Mintz’s early days in global finance from the Wilmer, Cutler notes from the Oct. 20 and Nov. 21, 2001, interview with Mintz; his May 16, 2003, deposition taken as part of the Batson investigation; and his Feb. 7, 2002, testimony before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.
25. Details of the Raptor problems and the use of the costless collars from the Powers Report, 110–11, and the Batson Report, vol. 4, app. C, 135–44; Wilmer, Cutler notes from the Jan. 11 and 15, 2002, interviews with Jordan, and the Dec. 11, 2001, and Jan. 31, 2002, Siurek interviews; a Nov. 14, 2000, memo to the files by Ron Baker of Enron, “Raptor Vehicle Issues”; and the documents headed “Daily Position Report and Summary” for each Raptor vehicle in the months of Oct. and Nov. Also see the Wilmer, Cutler notes of the Dec. 20, 2001, interview with Rakesh Bharati.
26. The timing of the Oct. 23 meeting from the two men’s calendars. Some details of the discussion from contemporaneous notes taken by Mintz during the meeting. Also see the Wilmer, Cutler notes from the Oct. 20 and Nov. 21, 2001, interview with Mintz, and his May 16, 2003, Batson deposition
27. Mintz’s discussion with Buy from the Wilmer, Cutler notes from the Nov. 21, 2001, interview with Mintz, and his May 16, 2003, deposition taken as part of the Batson investigation. Also see the notes from Buy’s Jan. 17, 2002, interview with Congressional staffers.
28. Some details of the Mintz meeting with McMahon from notes in Mintz’s schedule book.
29. Some details of Skilling’s experience at the LJM conference from his testimony of Dec. 4 and 5, 2001, before the SEC, as well as entries in his schedule book for Oct. 26 and a copy of his itinerary. A copy of the presentation made by Fastow, “LJM Investments, Annual Partnership Meeting, October 26, 2000” was obtained by the author. Other specific details from an invitation labeled “LJM2 Co-investment LP Conference,” and welcoming material distributed to the attendees. Also see the document “LJM2 Co-investment LP Conference, October 26–27, 2000, Agenda and Attendee List.”
30. Some details from notes and entries in Mintz’s schedule book. Also see the Wilmer, Cutler notes from the Oct. 20 and Nov. 21, 2001, interviews with Mintz, and his May 16, 2003, Batson deposition. Also see notes from Buy’s Jan. 17, 2002, interview with Congressional staffer.
31. Some details of the follow-up meeting in Portland from Sanders’s July 9, 2002, deposition before the FERC and the CFTC.
32. Some details of the negotiation breakdown and Berardino’s follow-up from Levitt, Take on the Street, 136–38.
33. Some details of Chanos’s efforts from his Feb. 6, 2002, testimony. Also see Laing, “The Bear That Roared.”
34. Some details of Yoder’s decision to try to capture management’s attention with a memo from Hall from his June 2, 2002, testimony before the CFTC and the FERC.
35. Some details of Curry’s examination of EES from McLean and Elkind, Smartest Guys in the Room, 299–301.
36. Some details of the Derrick meeting from the Sanders testimony of July 9 and 10, 2002.
37. Some details of Mintz’s conversation with Fastow from notes written in his schedule book for that day. Also see the private-placement memorandum for LJM2, Dec. 15, 1999, and the draft memorandum for LJM3, Dec. 2000. Also see the Dec. 2000 investment-recommendation memo from the Pacific Corporate Group to Calpers, “LJM3 Co-investment LP,” and Mintz’s Dec. 7, 2000, memo “Private Placement Memorandum for ‘LJM3.’ ”
38. Details of the tree lighting from Nancy Vogel, “Crisis Darkens State Christmas Tree,” Los Angeles Times, Dec. 6, 2000, Al. Also see Colleen Valles, “Facing Power Shortage, Plea to Turn on Holiday Lights Late,” Associated Press, Dec. 5, 2000.
39. Some details of Hall’s effort from the undated transcript of his testimony before the CFTC and the FERC; a copy of the Dec. 6, 2000, memo from Yoder and Hall to Sanders, “Traders’ Strategies in the California Wholesale Power Markets/ISO Sanctions”; and Yoder’s June 7, 2002, testimony be
fore the two bodies. Also see the billing records of Stoel Rives to Enron North America for Dec. 1–7, 2000, as reflected in an invoice issued on Jan. 30, 2001; and the Jan. 11, 2001, memo to Sanders from Gary Fergus of the Brobeck firm, “Status Report on Further Investigation and Analysis of EPMI Trading Strategies.”
40. Sanders described his reaction to the Yoder memo in his July 9, 2002, deposition before the FERC and the CFTC.
41. Yoder described Haedicke’s reaction to the memo in his June 7, 2002, testimony.
42. Some details of the draft of Mintz’s memo from the original document, “Private Placement Memorandum for ‘LJM3,’ ” Dec. 7, 2000. Also see the Wilmer, Cutler notes from the Oct. 20, 2001, interview with Mintz, and his May 16, 2003, deposition taken as part of the Batson investigation, and the revised memo, a copy of which was obtained by the author. Also see the Batson Report, vol. 4, app. C, 167.
43. Some details of the Dec. 12 board meeting from the official minutes.
CHAPTER 15
1. A copy of the deal-approval sheet for Fishtail was obtained by the author. Details of the transaction from an Oct. 1, 2000, memo to the file by Enron Transaction Support, “Accounting Enron’s Investment in Fishtail LLC.” Some details from the subsequent Mintz e-mail of that day, Jan. 4, 2001, to Nicole Alvino, Barry Schnapper, and Ryan Siurek, “LJM Approval Sheets for Avici, Catalytica.” Also see the notes from Wilmer, Cutler’s Dec. 12, 2001, interview with Schnapper and the Nov. 21, 2001, interview with Mintz; and the Batson Report, vol. 3, app. C, 90.
2. Some details of Bass’s work on Fishtail from his March 4, 2001, e-mail to Stewart, headed “Enron”; also see the FBI 302 from the Feb. 8, 2002, interview with Stewart.
3. Some details of Project Braveheart from the Dec. 2000 internal presentation “EBS Blockbuster Monetization and More: ‘Project Braveheart’ ”; a Dec. 29, 2000, memo to the file by Roger Willard and Clint S. Carlin of Arthur Andersen, “Content Services LLC Formation and Securitization Issues”; a Dec. 29, 2000, memo to the file by Kimberly Scardino of Andersen, “Project Braveheart—Sale of EBS Content Systems Membership Interests”; and a Jan. 2001 Enron document, “EBS Blockbuster Monetization, ‘Braveheart—the Sequel.’ ” Some details of the accounting debate over the effort from the 302 prepared by the FBI from an interview with Bass on Feb. 1, 2002; and from a Bass e-mail to Stewart, “Blockbuster Update,” Dec. 20, 2000. The near collapse of the deal is revealed in the March 8, 2001, letter from John Antioco, chairman and chief executive of Blockbuster, to Rice from Enron Broadband Services; also see the fourth superseding indictment in United States of America v. Kenneth Rice et al., filed in Houston Federal District Court on July 22, 2004.
4. According to the 302 of his Feb. 1, 2002, interview, Bass described the CIBC controversy to the FBI.
5. The problems regarding the flipped fee, known as negative UDC charges, are disclosed in an undated Enron document created in late Jan. or early Feb. 2001 and headed “EES—Confidential,” which lays out the financial impact of those charges. Some details of the California reserves, taken through a document known as Schedule C, are described in the FBI 302 from the Feb. 8, 2002, interview of Thomas Bauer from Andersen. Also see U.S. v. Skilling et al., as well as some of the individual calculation documents used in assembling Schedule C and Skilling’s Dec. 5, 2001, testimony before the SEC.
6. Some details of the efforts to find answers to the Raptor problems from the FBI 302s from the Feb. 1, 2002, interview with Bass and the Feb. 21, 2002, interview with Cash; and a Nov. 29, 2000, memo to the file by Ron Baker of Enron, “Raptor III-IV Cross-Guarantee Loss Contingency.” Also see the memo to the files by Duncan and other members of the team, “Raptor Structures Update,” Dec. 28, 2000; the undated, unsigned document “Raptor Vehicles Credit Capacity Issue Solutions”; and another undated, unsigned document, “Raptor Realignment Steps.” Also see the Powers Report, 119–20; the Batson Report, vol. 4, app. C, 138; the Wilmer, Cutler notes from interviews with Kevin Jordan on Jan. 11 and 15, 2002; Ryan Siurek on Dec. 11, 2001, and Jan. 31, 2002; Wes Colwell on Jan. 9, 2002; and Ron Astin on Jan. 16, 2002. 402 Details of the Duncan memo from the original document. Also see the Batson Report, vol. 4, app. B, annex 1, 4.
7. Some details of the Davis, Greenspan, and Summers meeting from Noam Neusner, “Greenspan, Davis Meet to Discuss Electricity Crisis,” San Francisco Chronicle, Dec. 27, 2000, B1; and “California Briefing for Fed Governor,” Houston Chronicle, Dec. 27, 2000, Business, 4.
8. Some details of the meeting between Lay and Davis from Lay’s itinerary for the week and handwritten notes taken during the discussion.
9. Details of the Azurix buyback from the 8-K filed by Azurix with the SEC on Dec. 15, 2000. Also see “Enron Throws Azurix a Lifeline,” Global Water Intelligence, Nov. 2000.
10. The issues surrounding the use of collateral as cash from operations from Enron’s 2000 10-K, filed with the SEC on April 2, 2001; and the May 6, 2001, analysis of Enron issued by the Off Wall Street Consulting Group.
11. Some details of Davis’s State of the State address from an official transcript of the speech. Also see Dan Morain, “Davis Urges Electric Overhaul to End ‘Energy Nightmare,’ ” Los Angeles Times, Jan. 9, 2001, A1.
12. Some details of Causey’s demand to remove Bass emerge in the 302s from the FBI interviews with David Duncan on April 5, 2002; Bass on Feb. 8, 2002; Bauer on Feb. 8, 2002; as well as Bass’s testimony of May 9, 2002, in U.S. v. Arthur Andersen. Berardino’s trip is described in a Jan. 24, 2001, e-mail from Shannon Adlong of Andersen to David Duncan, and a Feb. 16, 2001, e-mail from Adlong to the Enron engagement team, “Joe Berardino Visit to Enron—Feb. 21st.”
13. Kaminski described his frustration with the Raptors, and his conclusions about them, in his Dec. 16, 2001, interview with Wilmer, Cutler.
14. Some details of the meeting from Lay’s itinerary for Jan. 13–15, 2001, headed “Los Angeles CA Itinerary; KLL/SJK/RS.”
15. The events in the video conference call were reconstructed by multiple participants in the meeting who were in attendance in either Los Angeles or Washington.
16. Details of Mintz’s meeting with Fastow from notes in his schedule book, his May 16, 2003, deposition taken as part of the Batson investigation, and his Feb. 7, 2002, testimony before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations. He also recounted this conversation in his e-mail to Astin and Rogers of that day. Also see a hard-copy printout, complete with handwritten notes by Mintz, of his Jan. 31, 2001, e-mail to Astin and Rogers, “LJM Proxy Disclosure—RhythmsNet”; the Batson Report, vol. 3, app. C, 34, and Mintz’s handwritten transcription of Fastow’s May 1, 2001, voice mail pertaining to how he would like to handle potential disclosure of his LJM income.
17. A copy of Mintz’s Jan. 16, 2001, e-mail was obtained by the author, as was the subsequent forwarded e-mail from Walls to Derrick of that same day. Also see the Batson Report, vol. 4, app. C, 129–30. Walls recounted his discussion with Astin in his sworn statement to the bankruptcy examiner of Sept. 25, 2002.
18. Some details of the Lays’ trip to Washington from their official itinerary for Jan. 18–21, 2001. The document is headed “2001 Presidential Inauguration; Kenneth and Linda Lay; Washington, D.C.; January 18–21, 2001; Itinerary.” Also see Kurt Eichenwald with Diana Henriques, “Enron Buffed Image to a Shine Even as It Rotted from Within,” New York Times, Feb. 10, 2002, A1.
19. Dialogue from the conference call from the official transcript.
20. A copy of the Lay family balance sheet for the year ended 2000 was obtained by the author.
21. Some details of Chanos’s efforts from his Feb. 6, 2002, testimony before Congress, and from McLean and Elkind, Smartest Guys in the Room, 320–21.
22. Some details of the meeting between Mintz and Causey from notes in Mintz’s schedule and from a Feb. 1, 2001, e-mail from Mintz to Causey headed “Re: Related Party Transactions.” Also see Mintz’s May 16, 2003, deposition taken as part of the Batso
n investigation; his Feb. 7, 2002, congressional testimony; notes from his Oct. 20, 2001, interview with Wilmer, Cutler; and the Batson Report, vol. 4, app. C, 130.
23. Skilling described his meeting with Fastow in his Dec. 4 and 5, 2001, testimony before the SEC; a copy of what appeared to be the Fastow estimate was reviewed by the author.
24. Details of Fastow’s actual financial performance from U.S. v. Fastow, et al., and from the April 30, 2003, criminal indictment in United States of America v. Lea W Fastow, filed in Federal District Court in Houston.
25. A number of details of this meeting, including the dialogue, from McLean and Elkind, Smartest Guys in the Room, 299.
26. Some details of the EES book shift from the FBI 302 taken during the proffer of Debra Cash on Feb. 21 and 22, 2002; from U.S. v. Skilling et al., and the indictment filed Oct. 29, 2003, in United States of America v. David Delainey, in Federal District Court in Houston. Delainey pleaded guilty to the crimes charged. Also see the 10-Q filed by Enron with the SEC on May 15, 2001, which disclosed the shifting of the risk-management book. Also see the Feb. 7, 2001, e-mail from Lay and Skilling to all of Enron, “Organizational Changes.”
27. Some details of the Feb. 12, 2001, audit committee meeting from the official minutes, handwritten notes taken during the meeting by the corporate secretary, and a copy of Causey’s formal presentation, “Review of LJM Procedures and Transactions Completed in 2000.” Also see Mintz’s May 16, 2003, deposition taken as part of the Batson investigation; his Feb. 7, 2002, congressional testimony; the Wilmer, Cutler notes from the interview with Winokur on Jan. 8, 2002, and with Causey on Nov. 30, 2002; and the Batson Report, vol. 4, app. C, 128–31, and vol. 3, 130.
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