Enron: The Smartest Guys in the Room Page #14

and all the trinkets

and all the trophies

of the world,

the corner office,

and all the perks

and you really can lose

your soul in the midst of this.

On January 25th, 2002,

seven weeks after

the Enron bankruptcy,

Cliff Baxter committed suicide.

With the media hounding him

because he was mentioned

in my memos

and the fact that

he'd been sued civilly

because he'd cashed

in for about

thirty million dollars

worth of stock

I guess it all came

crashing down on him.

I think Cliff's suicide

note tells it all.

You know,

Where there was once great pride,

now there is none.

It's very hard for me

to talk about Cliff.

We were very close

for many years.

And he was a wonderful,

wonderful man.

But a lot of who Cliff

was tied up in how

he had succeeded at Enron.

It is hard to look at

your life's work and say

it's failed.

But you have to take a long,

cold look at yourself and say,

'who was I? Who did I become? '

And realize that you may

have seen your shadow.

Andy Fastow pled guilty to

conspiracy to commit wire fraud.

He agreed to forfeit 23

million dollars in assets.

His sentence was

reduced to ten years

in exchange for testifying

against other Enron executives.

Why Enron?

Why not Worldcom or Tyco

or Global Crossings?

Ultimately in Enron the fatal

flaw was a sense that brains

and wiliness could

out-think the way

that the system

will eventually work.

In 2004, Jeff Skilling was

indicted for insider trading

and conspiracy to

defraud investors.

Pleading innocent,

he paid his

attorneys a retainer of

23 million dollars

to defend him.

Enron should not be viewed

as an aberration,

something that can't

happen anywhere else.

Because it's all about

the rationalization

that you're not doing

anything wrong.

We've involved Arthur Andersen,

we've involved the lawyers.

The bankers know

what we're doing.

There's a sense the

diffusion of responsibility.

Everyone was on the bandwagon.

And it can happen again.

Enron's accounting firm.

Arthur Andersen,

was convicted of

obstructing justice.

With its reputation

for honesty destroyed,

America's oldest accounting

firm fell along with Enron

and twenty nine thousand people

lost their jobs.

Enron's shareholders

are suing Enron

and its banks

for 20 billion dollars.

Ken Lay was also indicted

for conspiracy to commit fraud.

His attorney maintains that

no one has been hurt more

by the Enron bankruptcy

than Ken Lay.

Nice of all of you to

show up this morning.

With today's arrest of Ken Lay,

the top echelon at Enron

has now been called to

account for their crimes.

Mr. Lay, do you have

anything to say, sir?

A little later today I will.

Looking at Enron is like

looking at the flip side of

so much possibility

because like most things

that end terribly,

it didn't start out that way.

It started with

a lot of people who thought

they were changing the world.

And over time they became

victims of their own hubris,

victims of their own greed

and so it's like taking

so much promise and possibility

and looking at it

in a mirror and seeing

the flip side reflected

back at you.

I think the larger lesson was

what Enron asked of

its employees which was ask why.

And you know I didn't ask

myself why enough;

I didn't ask

managers why enough,

I didn't ask

my colleagues why enough.

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