I don’t know if I will actually place this on my BlackBerry, but I am very happy to own it. My people know me, what can I say? (Thank you, SuperPrime, for the awesome gift.)
UPDATED
I keep looking at the “ask why” and cracking up. He remembered the “ask why”! I don’t know why, exactly, that is so precious to me, but it is. It’s perfect.
Filed under Enron
CARA ELLISON: Good morning. Thank you for joining us this morning for our third-quarter analyst conference. I have with me today President Tom Marks, Chief Financial Officer Owen Kind, Chief Technical Officer Jonathan Timmons, and our Communications Director, Perry Kanaly. I am going to give some brief opening remarks, and then we’re happy to take questions.
The … the overarching picture of the company continues to be one of strong health. We’ve done a very good job of limiting the effects of the rather weak economy and we’ve taken every measure to cut costs and retain our talent. For instance, we have a 95 percent retention rate, which is about the average of the last four years…so we’ve not been too affected in that regard. Most of the five percent who have left have been voluntary….. I mean, sorry, I mean it’s been turnover from retirees, employees taking advantages of back-to-school bonuses and that kind of thing. We’ve been very fortunate indeed, and I think it shows just how strong the company really is.
We will be reporting a third-quarter loss of $120 million which is due to the American currency being slightly devalued overseas. The loss is entirely within International and we’ve taken proactive steps to correct the loss. Every domestic unit will report a strong profit this quarter, with the pipelines surpassing even our most optimistic estimates.
I see there are quite a few analysts on this morning, so I’ll open the floor for calls.
OPERATOR: Douglas Keane from Putnam Lovell.
KEANE: Good morning, Ms. Ellison and others. Congratulations on a great quarter. I’m curious if you can add some color to the loss in international….?
OWEN KIND, CFO: Hi Doug, Owen Kind here. I think when you
UNKNOWN: (unintelligible)
OWEN KIND, CFO: look at the loss, you have to take into account the entire world economy right now which…
KEANE: right
OWEN KIND, CFO: which is self-explanatory. Our investments have experienced a slow erosion with the general decline of the economy. We have strengthened our hedges and are very optimistic that the next quarter will make up the loss.
OPERATOR: Cynthia Bell from JVS.
BELL: Good morning, Ms. Ellison. Last quarter you said there were some enormous gains in Broadband. Could you update us on the progress there?
JONATHAN TIMMONS, CTO: Hi Cynthia, this is Jonathan Timmons. You’re exactly correct. When we spoke last quarter we had just launched our test markets. We’re presently in seventeen states, and the system is working beautifully. I could not be more excited about our progress. We’re breaking ground in five more states in the next sixty days. Our plan to be fully live in six months is still on target. Very excited. Very good stuff.
OPERATOR: Jason Katz, Valiant.
UNKNOWN: [ Unintelligible. ]
ELLISON: Hello Mr. Katz, what’s your question?
KATZ: Ms. Ellison, thanks for taking my call. I was looking at the filings and they seem incomplete. I was hoping I could get a cash flow statement with your earnings?
ELLISON: Mr. Katz… you…you
PERRY KANALY: Katz, you’ve asked five times
ELLISON: Kanaly, thanks. I’ve got
KATZ: You’re the only financial institution that can’t produce a balance sheet or cash flow statement with their earnings.
ELLISON: Oh fuck you, Katz.
KANALY: ….withhold those.
[CROSSTALK]
TOM MARKS: …pausing for a moment? Convene in
KATZ: No, fuck you, Miss Ellison. You treat all the analysts like
ELLISON: Shut the fuck up, you asshole. You call here
KANALY: Perhaps other calls?
JONATHAN TIMMONS: Is this for real?
ELLISON: You call in every damn quarter asking
KATZ: Because you won’t give them to me!
ELLISON: We don’t do that at Cara Ellison Corp!
[CROSSTALK]
KANALY: perhaps arrange
ELLISON: Fuck you! You want to come here, to the office
KATZ: Bullshit!
ELLISON: I am on the fiftieth floor, you can come here any day and I’ll have accountants
KATZ: It’s all bullshit! Your accountants don’t
KANALY: Please, let’s
UNKNOWN: I’m not sure
KATZ: know what they’re doing. How could they… don’t even have a cash flow statement!
ELLISON: Look, bitch
KANALY: Oh God
ELLISON: you can keep lying
[CROSS TALK]
TOM MARKS: Please
KANALY: Where?
ELLISON: Fuck you. Fuck you, asshole…. Short seller
KATZ: Because your accountants don’t know shit!
KANALY: This is not… important
OWEN KIND: I have no idea.
KATZ: They just do what you tell them!
ELLISON: Bullshit! [CROSSTALK ] Could have called me… could ask to speak to OWEN or TOM or… or…. Anyone, and instead you do this drive-by shit
UNKNOWN: That’s it, I quit.
ELLISON: What? Who quit?
KATZ: You don’t take calls from me
ELLISON: Katz, you’re a short seller trying to devalue
KATZ: That’s your paranoia
ELLISON: Fuck you
[CROSSTALK]
TOM MARKS: Hang up. Operator, please
ELLISON: Fucking kill you, asshole.
UNKNOWN: Jesus Christ
[CROSSTALK]
ELLISON: Who quit? Who else? To quit?
JONATHAN TIMMONS: I quit.
ELLISON: No severance! Nothing! Who else? Anybody else? Okay then you get raises. Fuck you Timmons
JONATHAN TIMMONS: Lost control. You’re completely
ELLISON: Fuck you
KANALY: Deep breath…calm down
ELLISON: Shut up Kanaly
KANALY: Please
ELLISON: Fuck you
KATZ: Anytime baby
ELLISON: Shut up, asshole
KATZ: You ever gonna give me the cash flow?
END CALL
Filed under Uncategorized
I don’t expect very much from the Enron Recovery Corp. But I did hope it could at least keep a website up. Even the Obama transition team can do that.
Filed under Enron
Today in 2005, Chief Accounting Officer Richard Causey pleaded guilty to a single charge of securities fraud related to the Greyhawk transaction. By pleading guilty, Causey was spared the 36-count indictment, and accepted a sentence of five to seven years, forfeited $1.25 million, and promised to cooperate with investigators.
At the center of the Enron Broadband Services case is an analyst conference on January 20, 2000, which spooled off hundreds of counts of fraud and conspiracy for five Broadband defendants (Joe Hirko, Rex Shelby, Scott Yeager, Kevin Hannon and Michael Krautz). It also caused problems for some of the guys in Corporate.
The government alleges that CEO Jeff Skilling allowed Enron to inappropriately recognize approximately $85 million in earnings from the increase in the value of its stock after the conference. The earnings were recorded through a partnership interest Enron held in JEDI (one of Fastow’s partnerships) that held, as one of its investment holdings, Enron stock. In connection with the January 20, 2000 analyst conference, Enron and JEDI purportedly executed a series of transactions, known as Project Greyhawk that allowed JEDI’s income to increase as the price of Enron’s stock increased. Project Greyhawk allowed Enron to recognize, through its partnership interest in JEDI, approximately $85 million in earnings as a result of the increase in Enron stock from the statements – which the government allege are false and misleading – at the analyst conference.
Causey allegedly misled investors when he (and others) didn’t reveal the $85 million increase in the JEDI investment came from the increased value of Enron stock.
After years of fighting the allegations, Rick Causey turned against his two co-defs, Jeff Skilling and Ken Lay. Incredibly, at his sentencing in which he pleaded guilty, his lawyer said repeatedly that Causey believed he was acting appropriately. He would never intentionally commit fraud or conspiracy. The attorney stressed that Causey was a good guy, a religious family man who never personally profited from any particular Enron transaction.
Mr. Causey is serving his sentence at a prison in Bastrop, Texas; he is expected to be released in October, 2011.
Filed under Enron
I read a lot of Joyce Carol Oates and those dog-awful sex novels by Shannon McKenna. I read poetry – and of course hundreds of biographies of my beloved Sylvia Plath. Fiction can be found in every room of my house; I especially love Nelson Demille, Tim O’Brien, and Douglas Coupland. My shelves are bursting with travelogues. In my bedroom, you’ll find shelves full of F Scott Fitzgerald, Hemingway, my copy of Moby Dick – the classics – interspersed with Anne Rice, biographies of Anne Rice, and criticism of Anne Rice.
But on my bedside table, you will find something else completely.
You will find the most gripping reading in the entire history of language. You will find: Enron trial transcripts.
I read them before sleep. They keep me awake, but I read them anyway because I seem to retain more of them if I read them before sleep instead of, say, in the middle of the day. Sometimes, to switch it up, I read affidavits and motions from the Broadband Trial or the Nigerian Barge Trial. Sometimes I print out news reports and mark them up like an angry professor grading the paper of a particularly imbecilic student, jotting in the margins: “source?” or: “NOT TRUE!!!!” or “WTF?”
The news reports are rare, actually, and I don’t actually enjoy them. The reason I read the transcripts, over and over, for years now, is because the people are speaking directly for themselves – which they can not do through the filter of a news report. In his answers on the stand, Jeff Skilling develops a personality you just can’t interpret from watching YouTube videos. He shows a marvelous sense of humor, that cutting, cold, brilliant intelligence, and …well, innocence. He speaks about his company like it’s a child, the source of all pride, the thing that will endure – or should have endured. He loves it, even now. You can hear the fondness. He pushes back against Sean Berkowitz, he is emotional, he is funny, he is innocent. He is just like any other person, talking to you about his experience.
I know it’s an obvious thing: Jeff Skilling is a real person. Yet I think people do tend to forget it because he’s become a symbol of something else. It is easy for detractors to discount his humor, his kindness, all those many stories of spontaneous and heartfelt generosity. This isn’t true only for Skilling, of course. It’s universal among the Enron executives who have found their lives upended because of the collapse of the company.
I guess reading the transcripts helps keep their humanity forefront in my mind. Meaning: they have lives outside of Enron. Often, in the transcripts, you can see those lives. You read about their families, their pastimes, their enjoyments. And you see that this alleged criminal behavior makes absolutely no sense whatsoever in the whole of their lives. Jeff Skilling did not care about money. He grew up in a modest, middle-class household – probably less affluent than the one you grew up in. He began to make money very early because he was talented and smart. But his motivation was actually not the money – it was about the pursuit of greatness. Creating – which is plenty of motivation for some among us.
So when the Enron Task Force accused him of fraud and conspiracy, you have to ask why he would do such a thing. The answer suggests itself: he wouldn’t.
Enron hired the best and the brightest. Perhaps it is too simplistic to claim that everyone was as pure as Skilling, but in general the kind of personality that was attracted to Enron was very creative, very dedicated to the process of work – figuring out problems, creating something big, watching the world go Kaboom when their product launched. Enron Broadband Services was perhaps even more intensely populated with those kinds of people than elsewhere. It was a place that was on the cutting edge; they were trying to accomplish something, build something, that had never been accomplished before. Pioneers, we used to call them.
And look at what is left. The company is gone. The ideas are shelved. Men are in prison… these brilliant men who contributed so much, are in prison. It’s like a Greek tragedy, but I can’t find any overarching meaning in it.
Yet I remain hopeful. These are good men, and strong men. I understand the plea deals, and I accept them and I don’t even really register a loss of respect for the men who take them; I know the pressure the government can exert.
But the men who don’t… those who keep fighting… Like Skilling, and Dr. Lay, and more immediately, Rex Shelby from EBS… these are the men, I think, who personify the very best of Enron. The very best of humanity.
For eight years now, these men have been telling their story. For eight years, they have endured trials, and sentences, and have had to suffer the fallout of friends and co-defendants who succumb to the pressure and accept a plea deal and testify against them. For eight long years, these guys have been trying to tell us what really happened at Enron. It’s all there, for anyone to hear – anyone with an open mind, anyone who bothers to pay attention.
So every night, when I lie my head down upon my white feather pillows, I read their words, and know they are speaking directly to me.
Filed under Enron
I’m still working on it, but this is it so far.
Also I’m trying to think of a good title. The working title is:
On The Side Of Angels: The True Enron Story
But that could change.
Filed under Enron
In an unusual move, Judge Vanessa Gilmore granted Rex Shelby’s request for continuance of his retrial pending the outcome of Scott Yeager’s double jeopardy appeal before the United States Supreme Court. This is great news for Mr. Shelby because if the Court clarifies or changes the law based on Yeager’s case, that change is applicable to Shelby’s appeal.
This is a great day for justice, and of course, one supposes, a great day for Rex Shelby. We here at Cara Ellison Corp send our very warmest, best wishes to Mr. Shelby and his legal team. Huzzah and Merry Christmas!
Filed under Enron
Jeff Skilling. I am long on Jeff Skilling; I will always be long on Jeff Skilling. I am not only long on Jeff Skilling, I will continue to reinvest in him forever. I will bequeath all the funds to his heirs so I can keep making money after I die. Anything with the Skilling DNA is gold. Strong buy.
Ken Lay. As above so below.
Ken Rice. I’m long on Ken Rice because I believe even now he’ll continue to be successful. I think he’s got a few surprises in him – a bit of a radical streak – but I think he’ll deliver good returns for the rest of his working life. Buy.
Sharron Watkins. I’ve never been a supporter of Watkins, but permanently scratched her off my portfolio when her “teaching companies how to be ethical” business dried up. She admitted to criminal activity (insider trading) and yet she somehow, mystically, evaded any prosecution. Despite her ability to work miracles, I find her a bit of a one-trick pony. No thanks. Sell sell sell.
Ben Glisan. I am long on Ben Glisan. I believe he’ll be successful no matter what he does. He is brilliant, handsome, and has the world in the palm of his beautiful, masculine hands. Buy.
Lea Fastow. Sell.
Andrew Fastow. Buy and Hold. Forget everything you know about Andy Fastow – even the fact that he’s a criminal. Look at the returns. He will bring big returns in the future. He will be Enron’s Michael Milken. When he emerges from prison, he will go on the rubber chicken circuit giving lectures about ethics, he will launch some charities and end up at a hedge fund raking in the cash.
Richard Causey. Buy and Hold. I am not sure what Causey will do after prison. I believe that he’ll be successful in any endeavor, yet I am unsure if he will do anything at all. He is extremely committed to his family and I suspect that he will simply vanish – not from shame (for he did nothing to be ashamed of) but just because he wants to spend the rest of his life enjoying himself. This is a wait and see situation.
Michael Kopper. I just never got a good read on him. Sell.
Mark Koenig. As above, so below. Hold.
Paula Rieker. She was never an inventor the way the others were, and I just don’t get excited thinking about her. Sell.
Timothy Belden. Strong buy. He’s a genius and will be successful at whatever he chooses to do.
Jeffrey Richter. He’s been in trouble since Enron collapsed. Sell.
David Bermingham. Strong buy. An ethical, smart, kind man who will be successful in whatever comes next.
Giles Darby. Strong buy.
Gary Mulgrew. Strong buy.
Dan Boyle. Strong buy.
James A. Brown. Strong buy.
Sheila Kahanek. Strong buy. She is the toughest woman I’ve ever heard of. She’s brilliant, dedicated, and I am positive that she’ll be just fine for the rest of her life.
Arthur Andersen. Strong buy. It was a good company that did nothing wrong. I continue to be loyal.
Jeff McMahon. Strong buy. An American classic.
Joe Hirko. Buy and hold. I am sure that he will be successful whatever he does after prison, but like Rick Causey, I’m not sure he’ll do anything at all.
Rex Shelby. Very strong buy. Like Jeff Skilling, Rex Shelby is strong, brilliant man whose future is limitless. Long on Shelby. I would pay his legal bills. Or, to use a phrase from an exboyfriend, I would pay his rent.
The federal indictment accusing Rex Shelby of a raft of corporate crimes has been re-written eight times since 2003.
Were the situation reversed, and the defendant had to tell his story eight times, the prosecution would – correctly – attack those statements and each subsequent statement. As the defendant, Mr. Shelby doesn’t have that luxury. All he can do is attempt to defend himself from whatever new version of events the government throws at him.
If the federal government cannot keep its story straight about exactly what illegal acts Mr. Shelby allegedly committed, perhaps they aren’t being truthful.
Filed under Enron
With all this noise about Caroline Kennedy assuming Hillary Clinton’s NY senate seat, one might be forgiven for forgetting that Ms. Kennedy has no experience in politics.
While experience was a grave concern for Sarah Palin, it’s a trifle when we discuss the Camelot Queen-apparent. To whit, on Nightline, John Donvan admitted the lack of experience but said, “All she will have at first is that name. But, at least she has kept it the way it was remembered, as part of a story that so many wanted to believe in.”
Interesting. What did Sarah Palin have except executive experience, a vivacious and real American success story, history of cutting taxes and curbing government, and an enormous ability to revive the Republican party?
Nothing, apparently, when compared to the nothing of a Kennedy.
Filed under Uncategorized
Last night I dreamed about Jeff Skilling. We were standing under some trees and I said to him, “I have a great feeling its going to be repaired.”
He replied, “I wish I had your faith.” Then he placed a tiny tree in my palm and told me to make a wish.
Filed under Enron
Ken Rice. I know that, mostly, I just wanted to do you all through 1999. You were Adonis-like and every time I saw you, I really just wanted to hustle you into a utility closet or unused conference room and fuck the living hell out of you. I was very young then, and my flirting skills were not quite up to par, but I do remember needing your signature once and bending way over across the table so you could look down my blouse. I remember you looked. I remember enjoying that immensely. So with that for background, I know you’re innocent. I know you went through prison gritting your teeth but understanding it was the most efficient way to get what you want. I know they were angry at you, and I know you were angry too. I know you’re calmer now, and more watchful. I know you wouldn’t make the same mistake twice.
John Arnold. I know that you singlehandedly proved that sometimes the young ones really, honestly deserve what they earn.
Rick Causey. I know you are innocent. I know you’re a well-rounded, honest, straight-forward guy without a criminal bone in your body. You pled guilty (sort of ) to conspiracy in the Greyhawk transaction – but that transaction was pure as the driven snow.
Rex Shelby. I know you’re innocent. I know you’re strong. I know you’re going to be found not guilty, and the rest of your life awaits.
Joe Hirko. I know you’re innocent. I know the fatigue of fighting must have been overwhelming for you – and you, like so many others, had your family to think about. I know its going to be difficult for you, but I also know you’ll emerge with your character intact.
Vince Kaminski. I know you are supremely cautious.
Scott Yeager. I know you must be exhausted. I know you’re doing the right things. Keep the faith.
Jeff Skilling. I know you’re sweet and generous and kind. I know you love your family. I know you know you’re innocent and that is what will sustain you. Godspeed and love.
Ken Lay. I know you are innocence personified. I know you’re at peace now.
Bethany McLean. Honestly, I disliked you so much at first because I recognized myself in you. I understood what it was like to be a girl who couldn’t finish Goldman Sachs trader school and so, since you couldn’t actually participate in finance, you wrote about it. But the difference between us is that I finally figured out a way to get in, and you haven’t.
Filed under Enron
In his prison cell, Jeff Skilling is laughing himself sick over the financial crisis. I am sure every time he reads in the newspaper or sees on CNN that the auto makers are receiving 15 billion, the spasms start up again and he can’t breathe and he laughs so hard he falls off his bunk.
If there is anything that justifies Enron’s collapse it is the circumstances we see before us. First it was mortgages, then it was commercial paper and banks collapsing every week, and now it’s the autos. Ironically, energy companies are doing just fine. But the fundamentals of the current economic climate are no different than what we saw in the summer and early fall of 2001.
Runs on the bank are real.
Liquidity crises happen, even when there is no corruption or fraud.
My heart, once again, goes out to Jeff and his family – and to Rex Shelby, who is still fighting charges related to the fallout from the collapse of the company. These men – and many others – are innocent. It is my dearest wish that with the current economy, with companies collapsing in an identical way to Enron, Shelby will be found Not Guilty so he can get on with the business of living. It’s been eight years. It’s time to free the men and women of Enron – to set them free. They’ve been found Not Guilty by basic economics: they are playing out before our very eyes.
Filed under Enron
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