Monthly Archives: November 2010
You can see the infamous Rex Shelby video here. I will be posting the entire 2000 Analyst Conference in the next 48 hours or so but because today is Rex Shelby day, I’d like to start with this.
Minute 3:55 is the world’s most adorable video ever in the history of video.
When I get home
from New York;
from the office;
I will drop my things in the nearest chair.
my gym bag;
In my bedroom, I will remove my constraining jacket and pinching patent leather heels. I will lie on the bed as I dial your number. The moment I hear your voice, all the exhaustion of the busy day evaporates. I will tell you, come on over, we’re having cake.
I have one hour.
In the kitchen, I know I need the sweet things. Vanilla, for instance. Lots of vanilla.
When I was younger, I made the same mistake over and over. I would remove the cake from the oven and when it was still hot, slather the frosting on. The frosting would melt, making a big mess. But it was so good that way, with the chocolate dripping down the sides. You would have to lick your fingers clean after every taste.
I make the mistake again. I just never learn how to wait.
When you show up, just as you said you would, I invite you in.
And serve you layer cake.
Rex Shelby has depleted his available life savings in defending himself for more than eight years so he now does not have enough money for another trial. Therefore, he has accepted a plea deal in which the government is likely taking from him the remaining savings that they froze when they indicted him. That’s a big advantage that the government has over any defendant — they can freeze most of a defendant’s money and then pursue him until he exhausts his remaining funds. A defendant uses his own money, but the government uses taxpayer money.
I hate that the American legal system is so geared to plea deals and that the government holds most of the cards in those deals. While everyone will probably think this is a great deal for Rex Shelby (and it is), I suspect that Rex himself is miserable. He wanted that trial passionately.
The details of the wording of this deal are telling. In essence, the government wants us to believe that Rex Shelby is responsible for leaving the analysts who attended the January 2000 Enron Analyst Conference with the “impression” that the Enron Broadband technology was entirely “complete” when it wasn’t all finished.
Hmm, let me analyze that idea. First, software technology is never “complete” in the way the government is implying. Have the prosecutors never heard of releases, like version 1.0, 2.0, etc.? Technology is always being upgraded. By the government’s standards, all the people in all the technology companies in the world should be indicted because they have the audacity to continue working on their technology to make it better. And let us recall Rex’s comment on the stand in Trial One that “software is not complete until it is obsolete.”
I have watched the video of that conference and read the transcript many times. Rex Shelby only shows up on a pre-recorded two-minute video — that’s it for him at the entire conference! There is not a single point during that conference where Rex Shelby, or anyone else, said that the Enron Broadband technology was already completely done. In fact, Jeff Skilling said just the opposite during a Q/A session at the end of the conference.
So, in other words, an analyst at that conference would need to be a total moron to have the impression that the technology was entirely “complete”. And Rex Shelby is certainly not responsible for any stupid “impression” that a moron gets that is contrary to what was actually presented at the conference. And, oh by the way, I have never read a report from an analyst who said he thought the technology was completely done, and the government never provided an analyst’s testimony to that effect.
Rex Shelby accepted a plea deal today. I am torn between telling the truth about how I feel and reporting the objective facts. I am usually pretty good at weaving together the two elements, but tonight, on this one subject, my art fails me.
The facts are as follows: Rex Shelby pleaded guilty to one count of insider trading. The government’s theory is that Rex Shelby said the software was complete at the 2000 Analyst Conference, but knew it wasn’t and traded on that information.
He was attended by Scott Yeager and Beth Steier. His girlfriend did not attend.
I will write more after I decide what I really want to say.
Rex Shelby has accepted a plea deal. Details to follow by 7PM Central Standard Time.
Sherron Watkins brought bad news to the top in 2001 when she met with Enron’s chief executive officer Kenneth Lay to tell him the doomed company was headed for an accounting disaster.
“The meeting was made Thursday for the following Wednesday and I had several sleepless nights,” said Watkins, guest speaker at Mission Brenham’s first dessert and ice cream fundraiser here Tuesday night.
Watkins was the keynote speaker and spoke about how her faith helped her through the collapse, testimonies before Congress and media attention.
Helped her through … media attention? You mean like the kind she’s seeking now? I’ve never in my life heard so much complaining about the media made to the media.
“I grew up in Tomball going to a Lutheran Church where it was hammered into me that if you were worrying about your life, then you were in sin,” Watkins said. “You are not trusting God.”
Watkins worked for Arthur Andersen and then Enron, and was generally a “risk adverse” person, she said. She noticed the accounting problems when she changed positions and Jeff Skilling resigned after eight months in the CEO office.
“You know you have a problem when the CEO calls it quits after eight short months,” Watkins said. “He didn’t call in sick, he called in rich. He saw the way the wind was blowing and sold his stock with insider information.”
Ms. Watkins is becoming ever more bold in her proclamations against the company. Very recently she said that Jeff was responsible for Cliff Baxter’s suicide. Now “he called in rich”.
Enron traded 25 percent of the country’s energy, declared bankruptcy in 2001 and had over two dozen felons associated with the company, Watkins said.
Peculiar, isn’t it? That a company so widely respected would be secretly run by criminals. What are the chances of that happening?
“There were 5,000 people laid off three weeks before Christmas, and I thought I was going to be next,” Watkins said.
She kept her job for another two months before the collapse, but found companies didn’t hire whistleblowers.
Watkins testified before Congress, wrote a book about the collapse and was named Time magazine’s Woman of the Year in 2002.
“That was the year of the whistleblower,” Watkins said. “Coleen Rowley, Cynthia Cooper and I were all from a small town, all the breadwinners in our families, and we were all women of faith.”
At this moment if Sherron Watkins were dying before my eyes, I would make her recite that line before I decided whether to save her or not. What a pompous asshole. Not even Jeff Skilling, who was supposedly so “arrogant” ever said anything so self serving and self aggrandizing. Hypocrisy, thy name is Sherron Watkins!
Congress subpoenaed Watkins after it found e-mails she sent to the top executives of the company.
“Corporations flood Congress with documents hoping they will never find the needle in the haystack,” Watkins said. “But they found my e-mails and I was called to testify.”
She was unprepared for the media attention and woke up one morning to find cameras in her front yard, she said.
Here we go again. Why do all of Sherron’s statements include her “shock” and “horror” at being a media target? This woman seriously believes she’s Madonna being hunted on the streets of Houston with helicopters flying overhead and TMZ waiting outside her house.
“I picked up my Bible and found a passage in Hebrews 12 which talks about the cloud of witnesses, laying off every sin and run with endurance the race set before me,” Watkins said. “I went to a Christian Business Women’s meeting and the speaker started in the same passage. That was a word from God to give me strength for the days ahead.”
Maybe you should read the part about bearing false witness?
Watkins now speaks about the collapse, corporate reform and helping the poor.
What a job. Seriously. This woman is a criminal. One of the few admitted insider traders at Enron. Somebody who attempted to blackmail Ken Lay, then asked to be in on whatever criminal activity was going on. This woman is a disgrace. This woman deserves to be ridiculed and mocked. She should be a pariah. Civilized society should not tolerate these blatant lies and self-promotion. The fact she’s trying to re-write history should not cloud our vision to the absolute truth: she is one of the only criminals at Enron. Not even Andy Fucking Fastow was this fucking insane! I’d sooner trust Andy Fastow with my life, my treasure and my sacred honor before I trusted her.
“I really want to live the Jeremiah 22:16 verse that to look after the causes of the poor and the weak is to know God,” Watkins said. “The poor are a test to see if you are living a biblical life because if we don’t do anything about it then we are wasting our talent.”
Have you given back the money you got from your insider trades, Sherron? Are you still living in a big mansion, because you know God said give all your wealth away. Or are you only listening to the parts you really like, that you think will put you in a good light?
I know plenty of Enron execs who are both devout and pious, and they would never do the things this woman has done. They certainly do not go around quoting God as some kind of justification for their own wrongdoings.
“I hope people get hungry enough to know God and seek after him.”
Interesting choice of words.
Mission Brenham is a Christ-centered community development organization focused on low income families sponsored by area churches.
Fucking embarrassment to the name Enron.
Journalist Bethany McLean and former Assistant U.S. Attorney Sean Berkowitz are still battling the bad guys.
She’s the former Fortune reporter who busted open the Enron debacle and co-wrote “The Smartest Guys in the Room,” a best-seller that became a movie. And he was the lead prosecutor who put Jeff Skillingbehind bars. Now, Mr. Berkowitz is a litigator at Latham & Watkins LLP.
The couple created buzz on Wall Street for appearing chummy within days of the trial. And Ms. McLean acknowledges that “they’ve been together ever since.”
They married and live in Chicago with their toddler (and have another baby on the way).
This week, Ms. McLean begins promoting her new book, “All the Devils are Here,” about the current financial crisis.
The book, which she wrote from the couple’s home, puts a human face to the crisis. Countrywide CEO Angelo Mozilo plays a key role, for example.
I talked to Ms. McLean for my Taking Names column in this week’s Crain’s Chicago Business. She had just wrapped a book-launch party with friends —including David Hoffman, the U.S. Senate candidate who lost in the Democratic primary.
“You can see the story of the financial crisis in an analytical sense and look at mortgage-backed securities or risk-management tools,” she said. “But in the end, the story is always about people.”
Yep. Smashing people.
What almost happened was you got to see the original Enron Intelligent Network “ePower” website. And the original EnronOnline.
That’s why I bought Enron-Online.com. I wanted to recreate it, so you could see it with your own four eyes. I have the original files and wanted to put them up. But for some reason that I am too tired to work on anymore, they simply won’t show up. If you go to
I’m tired. I was at work for twelve hours today and my brain hurts. If you think you see the problem, give me a shout. Otherwise, let’s all just sulk because the internet is such a tease.
Dear Mark Palmer,
All your friends love you, so I do too. You have a wonderful reputation for creating kick ass PowerPoints, among other things. Which is why, when I found this I became quite amused. You worked for a Fortune 500 company, not a lemonade stand, and you were using Comic Sans? Really? I have no idea if that’s fucking adorable or lunacy. I’m leaning toward lunacy.
It looks like a serial killer’s document. A brilliant, crazy serial killer. I hope, since 1999, you’ve reconsidered your stance on that font.
I’ve forgiven you, and I hope we can put this unpleasantness behind us.
PS. Every computer in the world can read Arial. When it doubt, use arial.
PPS. I ultimately blame Rex Shelby for this. He knows why.
Alex Gibney is back. Speaking to Culture Map, Gibney talks about his new obsession: Elliot Spitzer and defends his abortion of a movie, Smartest Guys In The Room. The pertinent quote from the interview:
CM: A final question. You’ve returned to scene of the crime, so to speak, years after directing Enron: The Smartest Guys in the Room. While you’ve been here for the Cinema Arts Festival, have you run into anyone who thought you were too hard on that nice man Ken Lay?
AG: Actually, there were a number of people I met at a party last night who felt I was too hard on that nice man Jeff Skilling as well as that nice man Ken Lay.
CM: And of course, you responded — politely.
AG: Yes, I did respond politely. I said I didn’t think I was too tough on them. And that a lot of people wished I would have been tougher. I felt I gave them, shall we say, the benefit of the doubt. And they cooked their own geese.
I must say: One thing that struck me about Eliot Spitzer is, he took responsibility for what he did. Which is something that Lay and Skilling never did. In their minds, they were the ones who became victims. Not the people who had lost all their money.
Skilling and Lay never had to accept responsibility because they did nothing wrong. But I’m amused about his confrontation. I have a very good idea who those rabble-rousers were. Way to go. I wish I could have watched him sputter a reply.
“I never use Viagra!”
“I think the federal prosecutors are finding that people are treating them like someone who has decided to give up showers. People are avoiding them.”
“I had an enormous baked potato for lunch — it was as big as the Hindenburg!”
“Keep fighting the good fight.”
He: “Do you ever stop being a nerd?”
After my NatWest post that mentions Allen Stanford, I discovered that the UK coalition Government announced a review of the extradition laws, and now they are seeking submissions from people interested in sharing their views. The missive reads:
Members of the public can have their say on a review into the UK’s extradition arrangements from today.
Extradition is the process which allows countries to make formal requests to each other for the return of suspects to stand trial for a crime in the country it was committed.
An independent review of the UK’s extradition laws was announced by the Home Secretary in September. As part of that review, the public has until 31 December to contribute views.
Efficient and fair
The review panel is being led by the Rt Hon Sir Scott Baker and is focusing on five areas to ensure that the UK’s arrangements work both efficiently and in the interests of justice. These areas are:
the Home Secretary’s powers to stop extradition
the operation of the European Arrest Warrant, which deals with extradition requests between European countries
where a crime is mainly committed in the UK, whether the person should be tried here
whether the US-UK Extradition Treaty is unbalanced
whether requesting countries should be required to provide sufficient evidence to prove an allegation
The panel would like to hear from anyone who may wish to contribute to the review. You can put forward your views by email to: firstname.lastname@example.org.
I actually smirked when I read the item “whether the US-UK Extradition Treaty is unbalanced.” In a word: yes. It’s terribly unfair. The long arm of American law can reach into the smallest English shires to grab a British citizen, drag him across the pond and force him to stand trial whereas the US would simply scoff if the British government attempted the same to a citizen anywhere in the US.
I am asking anyone who is interested to please share your views with the UK Home Office. I believe it would be helpful for American citizens saying that the criminal justice system in the USA is not quite the bed of roses that the British are led to believe, and that sending citizens to the US without testing any evidence (as is currently the case) merely encourages those rotten apples in the prosecutorial barrel to be even more cavalier about the truth, knowing that the victory is assured once the defendant arrives on US soil. No American court would dream of allowing the reverse to happen to a US citizen.
It is too late to assist the NatWest Three. They’ve served their draconian sentences and have returned to their homes. But it is not too late to help others mired in the system.
Please send your views on extradition to: email@example.com
Please let it be known that the American justice system is biased toward prosecutors. For citizens of the UK, being extradited into the system is a certain conviction.
When I was a freshman in college, my physics professor began his class by teaching us how to count. How to really count. He would ask us to figure out how many oak tree leaves were in the United States, or how many blades of grass in a square mile. One day he asked us to shut our eyes and asked us to visualize three of anything. Three eggs, three stars, three supermodels. Whatever. If we could do that, we were to raise our hand.
Then he asked us to visualize five. The trick was to keep each one vivid in the mind. If you could visualize five distinct, individual things, raise your hand. Most people had their hands up at this point.
Then ten. Solidly half of the class had to put their hands down.
At twenty, there were about four people with their hands still up.
The point is, it is difficult to really see even small numbers, and the bigger the number, the more abstract it becomes. Thus today when I saw that I’ve reached 1,000,021 viewers so far in year 2010, I knew what the number meant, but I can’t really visualize it. I physically know about twenty people who read my blog. The rest of you are mysteries to me – lunar shadow.
I marvel that I’ve been able to attract any audience at all – I sort of goof around, and I’m notorious for not caring about my credibility. So I’m very thankful and very touched and very amused that you check out my little blog here. I love my Enron blog – it’s precious to me. I would write this every day even if nobody ever read it. It makes me happy to write and research and proclaim out loud that there was no fraud or conspiracy at Enron Corporation.
But the truth is, it’s better because you do read it. So thank you! One million people. I can’t imagine.
A few things jumped out at me about the story: 1.) We aren’t shown those photos in US publications. 2.) The NatWest Three were right to fight extradition to this country, which does not do a very good job of protecting people merely accused of a crime. Indeed the accusation process is one of the prosecution’s greatest tools to help punish those who might very well be innocent. With the perp-walks, the crushing emotional torture so illustrated by Stanford, and the small tactical games, such as lying about witnesses they intend to call, our “pre-justice” system is as wretched as the trial and punishment process.
I love my country. But I’ve grown weary of the abuses that take place casually in the criminal justice system – and even in the civil justice system. I’m weary of our acceptance that people such as Stanford will be beaten; officials shrug their shoulders and don’t give it another thought.
This is what the NatWest Three were being imported into. I have no idea if the same problems bedevil UK prisons, or if their justice system is a little more compassionate than ours (when I lived there, I never tangled with that particular aspect of English life.) But I know that our reputation for being monstrous to criminals probably proceeds us and in this instance, the NatWest Three had good reason to be concerned that they would be treated badly.