Enron: The Smartest Guys in the Room Page #13

the company's in the best shape

it's ever been in'

From the standpoint

of Enron stock,

we're going to bring it back...

we're going to bring it back.

Alright,

we're down to questions.

I've got a few of them here.

'I would like to know

if you are on crack?

If so,

that would explain a lot.

If not. You may want to start

because it's going

to be a long time

before we trust you again. '

It certainly wasn't clear

to anyone at Enron,

much less anyone

outside of Enron

it wasn't really clear

what was going on or...

what was going to happen.

I know this is a lot...

There is a lot of speculation

about Andy's involvement

I and the board are

also sure that

Andy has operated

in the most ethical

and appropriate manner possible.

The next day,

Andy Fastow was fired

when the Enron board

discovered that

he had made more than

$45 million dollars

from his LJM partnerships.

The question, Mr. Fastow,

is how could you believe

that your actions were

in any way consistent

with your fiduciary

duties to Enron

and its shareholders

or with common sense

notions of corporate ethics

and propriety?

How do you answer, sir?

Mr. Chairman on

the advice of my counsel,

I respectfully decline to

answer the questions

based on the protection

afforded me

under the United States

Constitution.

Andy, in many ways,

I think he was set up

as the fall guy.

All of the Enron executives

were saying,

'there's your man, Andy Fastow.

He's the crook.

You know, he's the one

that stole from Enron,

stole from LJM.

He's the one that

cooked the books.

Go after him. '

How will you plead, Mr. Fastow?

I've thought about this

and thought about this.

And it couldn't have

just been a few executives

at Enron that made this happen.

If you think of the banks

involved Chase,

Morgan, Citibank

the billions in loans

Arthur Andersen...

What about Vincent and Elkins,

the lawyers that

represented us?

There had to have been

complicity across the board.

Because it was all too easy;

all too easy.

The Enron collapse was

an enormous tragedy.

This is a company that had

over thirty thousand employees,

and clearly with

a company that size

you have a lot of

senior officers

that have a lot of authority in

which you place enormous trust.

But in the case

there was at least one,

Andy Fastow,

that betrayed that trust

to the extent that

I did not know

what he was doing,

he obviously didn't share

with me what he was doing,

then indeed I cannot take

responsibility for what he did

I never heard him say,

'I take responsibility'

for a thing.

It sounded to me like

the wonderful movie, 'Chicago'.

I was reminded of

the puppet strings

and the dancers

and the tap dancing

and pointing at the gun,

the gun, the gun.

I mean. Everybody's

in step with Johnny.

I continue to grieve,

as does my family,

over the loss of the company.

Linda and I saw

our net worth reduced

from several hundred

million dollars down to

something less than

twenty million dollars

on a net worth basis.

And of course,

as... as you said,

about a million dollars

or less in liquidity.

I don't know whether

I'd rather be shot as a crook

or as an idiot.

I believe the only venue for me

is the 'Ride of Broken Dreams. '

Oh, you mean the Enron ride!

Let's go!

Enron hit the National psyche.

It hit it as sort of,

the time-tested lesson.

And that is,

if it looks too good to be true,

sometimes it is.

We're all going to be rich!

We broke even.

It is my belief that

Enron's failure was

due to a classic

run on the bank.

Don't look now but there's

something funny going on

over there at the bank, George.

I've never really seen one,

but that's got all the

earmarks of being a run.

On December 2nd 2001,

less than four months

after Skilling's resignation

Enron declared bankruptcy.

I remember

it was just a strange,

kind of surreal day.

We learned around nine thirty

about the bankruptcy

and that we were

all being let go.

We all felt like

we were on the Titanic

and the last lifeboats

had long gone

and we were just now

on the sinking ship.

We had thirty minutes

to leave the building

and at that point

it was no longer

like being on the Titanic.

It was kind of like being

on the Lusitania.

The torpedo had hit

and there's twenty minutes

to get out.

There's a lot of disbelief.

Very few of the rank and file

people ever dreamed that

Enron would

actually go bankrupt.

Then all of a sudden,

it was like a ghost town.

I can remember going

into the old building,

on certain floors,

ah, late in the,

afternoon or evening.

And it was scary.

There'd be like paper

blowing around,

and nobody there,

and it was just...

it was very eerie.

Mr. Skilling,

your opening statement was

extremely compassionate

to the employees.

And I want to show you a tape.

And I believe

we have it ready to go.

Listen to this.

Should we invest all of

our 401k in Enron Stock?

Absolutely.

Don't you guys agree?

Why is it that you had begun

unloading your stock?

Pretty heavily

before that date

and yet led

the employees to think that

they should keep buying stock?

Ms. Senator,

I have been a major shareholder

in Enron Corporation

and you can take

the videotape to mean

what you want it to mean.

I was a supporter of

Enron Corporation.

You know what happened

to those people.

They lost everything.

I feel terrible about

what happened to the employees.

Oh at one time,

things were really rosy for us.

And we all had some

really nice-looking 401ks

and pensions

and then it peaked.

And then it

just started going down,

and it went lower

and lower and lower.

At the peak

I had about 348 thousand.

I sold it all for 1200 dollars;

was what I got for it,

when it was done.

While Enron's stock

was plummeting,

the retirement

accounts of Enron's rank

and file workers were frozen.

We were frozen out of

our accounts.

It was right about

thirty two dollars, I believe.

And over that time,

from when it was frozen to

when it opened up,

I think it went down to nine.

And we could not access it.

And what came out

later that was so bad,

was the fact that

Ken Lay and Skilling

and all the top people were

movin' their money then.

But we couldn't.

The insiders had sold off

a billion dollars of their stock.

Compare that to the lineman

who worked for a staid,

old utility company

for most of his life;

put away money each month.

And what's he have to show,

at the end day,

for his years of hard

and decent labor?

He gets a big goose egg.

And Pai is out

in Hawaii somewhere,

with 350 million dollars

in the bank.

That's wrong.

There is still to this city

a layer of anger and upset.

I am still doing counseling,

three years later,

with some families.

Where some of those

who are most reflective,

it's gone to a deeper layer.

And they are looking

at the corporate culture itself

in this country.

You know,

you can gain the whole world

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