I worked at Enron from late 1999 until being laid off at bankruptcy.
I also, however, contacted the SEC, Rep. Henry Waxman's office, and members of the press regarding my belief that reserves may have been mis-used, possible illicit trading of Enron's stock by the company, possible shredding occurring within the building, and several other issues I was aware of or had information on to varying degrees. In the beginning of 2002, I met with the FBI and provided them with all the information and leads I had.
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Enron was an intriguing and strange place to work, and always challenging, although the nature of the culture was Darwinian with all the resulting behavior that engenders in even the best of people. I was inaugurated into the culture within an hour or two of showing up for work my first day, when I saw a senior executive deliver a long and often eloquent F-bomb that might even have made Mary Scott O'Connor blush. Or maybe not. One of my co-workers saw me cringing as I watched it and he laughed, "Ah, that's just
__." Something I learned early on was that "fuck" in all its grammatically possible parts of speech was pretty common at Enron, even in normal conversational use. Another word used commonly was "swag" (scientific wild ass guess) as in "Take a swag at it. Just get it done."
The walls of each floor at Enron had conspicuous posters exhorting the Enron way, including one that talked about a desire that employees should feel an "urgency" about their work - always pressing forward full-speed ahead. And you learned the core values of RICE by heart: Respect, Integrity, Communication, and Excellence. When you were indoctrinated into Enron's cult(ure) you were really indoctrinated. A lot of former co-workers I've spoken with, a majority actually, admit they would do it all over again, working there, for the experience it provided. I used to think that, too. Now I'm not so sure, because it again comes full circle back to values - including the ones Enron engraved in employees' minds such that many felt even more betrayed by what happened.
I happened to work in an area - Risk Assessment and Control (RAC) under Chief Risk Officer Rick Buy - that was perfectly situated to have access to information from across the spectrum of the company, second only to the Office of the Chief Executive (OCE) in the breadth of information it received. RAC in fact reported directly to the OCE and to the Board of Directors, and some members in RAC had access to a report known as the DPR (Daily Position Report) which was sent daily to a hundred or so people, most of them executives. The department of 150 or so people served as a risk function, covering risk related to deals and their evaluation, credit risk, and trading market risk. People often worked individually or in teams on specific projects, but information tended to flow around such that many people had passing acquaintance with things like the various SPE's (LJM, Raptor), etc.
During my two or so years there, I ran across things like Raptor and what turned out to be part of "Project Greyhawk", as well as had a much deeper understanding of issues with the actual profit or loss of divisions like EBS and EES, and the use of the trading reserves to offset large trading losses. RAC had some good people who spoke out early and often about concerns. I knew several who ended up transferred as a result. Sherron Watkins was the last of many who elevated issues; some of the documentation she turned over to investigators originated in RAC months or up to a year earlier. And as turned out, her reception was about as welcome and accepted as the previous warnings - inquiries were made whether she could be terminated, and her recommendations weren't acted upon.
One thing people may wonder, or perhaps they're too polite to ask, is why didn't anyone take it outside the company? Why didn't anyone realize anything illegal was going on? Even Sherron Watkins has been upfront that she does not fall into the definition of "whistleblower," because she took her concerns to Ken Lay. I guess the best I've been able to come up with has been that people often have an instinctive trust and loyalty to the company they work for, especially one such as Enron that works so hard to indoctrinate its employees, or they reason that it's been vetted by accountants and attorneys, or that a company of Enron's size and prestige wouldn't do something so stupid, or that while it looks irregular to those who don't know all the details, those who do know the whole story have a different perspective. Additionally, as the trial has revealed, it can be very difficult and sometimes a matter of the courts to decide the illegality of an action or actions, sometimes within the context it took place in, or the entire range of actions that were undertaken.
As things quickly fell apart in late 2001, and as many longstanding issues, whose numbers and magnitude overwhelmed the company's ability to manage them, finally came home to roost, people began to have an inkling of what had been really going on. Employees who knew parts of the story spoke with others who knew other parts, and with the new perspectives enhanced by the knowledge of what had actually transpired with things like LJM and other activities, there finally came the question: Now that you know something may have been wrong and you have information on it, will you come forward?
I was disappointed but maybe not surprised that almost everyone I spoke with, many of whom possessed a depth of information greater than my own in certain areas, "did not want to get involved" and chose to remain silent. Like many who had assumed something looked irregular before but had assumed I didn't understand the whole context (of course, turns out, I didn't), I decided at this point, where there's smoke there's fire, so I chose to speak up, and I racked my brains for anything I could recall that had seemed irregular.
Initially I was almost persuaded otherwise - I made the mistake of contacting the top local news channel, ABC affiliate Channel 13 (thanks, KTRK!), about allegations of shredding I had heard and about specific information I had on several subjects. I realize that information needs to be corroborated, but despite Enron in early December being THE big story, they showed pretty much a lack of interest and although I even came up and met with someone, giving him copies of documents, etc., I...never heard back from anyone.
I guess this was before I realized that real reporting doesn't come from the TV these days, and it's a little more substantial in the print media (I later contributed heavily to two or three New York Times articles, including "Enron's Wild Speculating". A co-worker of mine contributed to the New York Times article on the reserves.)
I then contacted the SEC and Henry Waxman's office, and the SEC showed actually a great deal of interest in some of the information I had, specifically relating to something I'd encountered in passing almost 2 years earlier, where a line-item on the previously mentioned DPR called the "Capital Portfolio" experienced a very large 1-day profit following the January 20, 2000, press release involving Enron's broadband strategy. Dates, amounts, existence of documentation, locations of files, departments and personnel - I knew all that because I was familiar with the DPR. Just not exactly why this profit had shown up so conveniently following such a big press release. It apparently turned out to be connected to something called "Project Greyhawk" according to the indictments. The Greyhawk indictments were later dropped as the prosecution streamlined its case.
Similarly, I recalled being tasked one time to look into what were referred to internally as "Schedule C Reserves" - when trading realized a very large profit, they would often put away some or most of that profit into these reserves. When trading experienced an unexpectedly large loss, such as the almost $1 Billion lost in the period of December 12-14, 2000, sometimes funds were taken out of the reserves. I never knew exactly what criteria were used for adding to or withdrawing from the reserves, but I suspected it might be relevant and passed on the dates and figures, locations of files, etc. that I could recall. It appears these formed the backbone of the indictment about using reserves to smooth earnings.
Being in RAC, I was very familiar with how much money both EBS and EES were losing, and some of the circumstances surrounding the eventual folding of EES into the wholesale trading operation. I also had some limited understanding of the Raptor SPE's, and believed they were worth looking into. I notice Cuiaba and the Nigerian Barge deals were also included in the indictments, but this far past, I can't recall whether I ever mentioned them, though I had heard of them and they were very much criticized within RAC.
Unfortunately, I had only heard rumors about the shredding that I believed to be pretty reliable, but no details as to what floor this was occurring on. It was almost two months before an employee walked out with a box of shredded documents to prove it was happening.
I did not lose any money at Enron. I did not participate in the 401(k) for various reasons. I also didn't have as much personally invested in the company, being there only two years, and by 2001 already wanting to move to a company without all the unnecessary and often counter-productive high tension. I was, however, out of work for 13 months after being laid off, but I am also pretty fiscally conservative, and I was able to get by. A lot of people were not, and a lot of people lost a lot, both financially and emotionally.
I know of several people in RAC who were interviewed or deposed during the course of the investigation, but only one who has admitted going forward voluntarily. I have no idea whether others did, though the general consensus seemed to be one of "Well, if they call me, I will testify, otherwise, I don't want to get involved." At the time I was pretty annoyed that someone who might be able to make a difference was willingly choosing not to do so, and it was left to me with far lesser knowledge of details to try to point investigators in directions that I thought might be valid, although it turns out I was at least pretty accurate after all.
Now truthfully, I don't even bear any ill-will toward Lay and Skilling, and I have mixed feelings now hearing about the convictions. I'm certainly glad that if I played any role, it was one of asking investigators to ascertain whether they believed certain things were legal or not, rather than having the role of deciding Lay's or Skilling's fate, and I do feel some compassion and pity toward both of them. To me it just underscores how sad the whole situation turned out to be, with reverberations felt for years afterwards. And in any event, it's certainly caused the scales to fall from my eyes and given me a whole different perspective toward corporate America, and one for the better.
Almost a year into joblessness back in 2002, other than stints doing demo work for my brother's remodelling business or caulking my next-door neighbor's house, that sort of thing, I was talking to a lady who - discovering during the course of our conversation that I had worked at Enron - expressed sympathy. I told her, though, that even if this were the worst year of my life, which it wasn't, it was still far better than even the best year in my father's life, growing up on a farm and experiencing the Great Depression during his childhood, then World War 2, and finally being drafted during the Korean War.
My username is actually derived from a nickname author Linda Goodman affectionately gave those born under the sign Capricorn. Here's what she wrote once: "From youth to adulthood, until the reverse aging syndrome begins, Capricorns are dyed-in-the-wool realists. They face life squarely, without flinching. When life socks it to them, they don't whine, complain or try to pin the blame on someone else. They simply get up, dust themselves off and make a practical decision about how to turn their failure into at least a semblance of success...Most of the time the Goats will take a rusty failure, the nails and broken glass of defeat or ridicule, and do their darndest to Scotch-tape or glue them together into something usable."
It's a pretty good way of looking at life. I've seen a lot of former employees get back on their feet again and move on with their lives, and I hope that most or all can do so.
Edit Addendum In the body of this diary, I included the following: Now truthfully, I don't even bear any ill-will toward Lay and Skilling, and I have mixed feelings now hearing about the convictions. I'm certainly glad that if I played any role, it was one of asking investigators to ascertain whether they believed certain things were legal or not, rather than having the role of deciding Lay's or Skilling's fate, and I do feel some compassion and pity toward both of them.
I'll address this, because it's easy to read quickly dashed-off words that followed my thoughts but not the rationale behind them. That's my fault, and it's certainly understandable that someone is not going to understand what lay behind those words.
* I don't even bear any ill-will toward Lay and Skilling - I addressed this in several of the comments in the thread. But to summarize - I just don't believe in carrying around a lot of anger inside me. That's not my way. Some people may believe you have to be angry to fight, but that belief goes against the impersonal or dispassionate nature of warfare in general as well as, for example, specific Asian displines of fighting. Lay and Skilling didn't know who I was, or for that matter the vast majority of the people hurt or otherwise affected by their actions. The impersonality of it doesn't excuse their actions. And the impersonality of my actions doesn't imply that I don't think there was wrongdoing - the act of my actions alone strongly indicates that I did believe wrongdoing had occurred. It was not my place to judge Lay and Skilling. That fell to the hands of the jurors, and I'm glad it was their responsibility and not mine, because mine and my opinions were tainted by the knowledge and experiences I had, making it difficult for me to be unbiased. I believe they received a fair trial.
* I'm certainly glad that if I played any role, it was one of asking investigators to ascertain whether they believed certain things were legal or not, rather than having the role of deciding Lay's or Skilling's fate, and I do feel some compassion and pity toward both of them. The first part of this sentence I explained just above. For the second part, I don't believe showing compassion or pity is synonymous or inter-related with a belief in someone's guilt or innocence, nor an attempt to be apologetic. It's an attempt, if anything, to be human. Lay and Skilling had positions and abilities that affected a great number of people, like George Bush, for example. Few people get that opportunity. "What a fucking waste" was the phrase that went through my mind when I saw the convictions finally come through. What a fucking waste because it would be nice if people would actually wield the power and the opportunities given to them for good, or that "good" people would be the ones who ended up in the position to wield power or to use opportunities to do a lot of good - and without falling victim to their own flaws.