Michelle Obama Backs Out of Enron Trader’s Fundraiser

The White House has announced that the First Lady isn’t coming to our fair town – at least not for now.

Michelle Obama was scheduled to be a guest at the home of John Arnold on Tuesday for a fundraiser, but the event has been postponed due to “a scheduling conflict.” The White House says it will be rescheduled but has not determined a date.

John Arnold, a former Enron trader, and his wife Laura were planning to greet guests who who paid $10,000 to attend or couples who paid $15,000. A 5:30 reception cost $250.

News Alert: OWS Protesters Devolve Into Zombies

In a shocking development, the Occupy Wall Street protesters were observed randomly attacking walkers-by and ripping them apart! Eye witnesses report that the protesters appear to be eating their victims, with an apparent preference for the unfortunate victims’ brains. Police and emergency crews report similar incidents at the sites of the “Occupy” protests throughout the nation.

When asked about this development, Geraldo Rivera, who has been covering the Occupy movement for Fox News, commented, “This explains a lot. The protesters have always been inarticulate, unable to explain themselves or even to mutter coherent sentences. They stink, and they congregate in hordes. I originally thought they were just on drugs, but I saw that they became more mindless and violent over time. Who could have guessed that they were actually turning into zombies!”

Sarah Palin, the popular ex-Governor of Alaska, told the press, “These people are a plague on our nation. They know nothing, and they have long been accomplishing nothing. They have always been intellectual zombies — now they are just becoming on the surface what they have always been inside.”

Charles Krauthammer, drawing on his background in psychology, put the developments into perspective. “Why is anyone surprised by this? These protesters resent the fact that there are people in the world who used their own brains to make themselves rich and successful. Because these rich people are unwilling simply to hand over their earnings to the protesters, the protesters are now turning into creatures who are willing to eat the brains of other people in their fruitless quest to find a shortcut to wealth that does not require them to perform actual productive work.”

Nancy Pelosi expressed a different view. “We should not be quick to judge these protesters. These people are just upset and expressing their discontentment with the disparity of incomes in this country. People like this are the backbone of the Democratic Party!”

Obama, still making speeches as he travels across the country in what he insists is not a campaign tour, commented, “This simply shows that we need much more stimulus money injected into the economy. If we simply tax the rich people enough, this problem will go away. While I personally don’t eat other people’s brains, we must protect the rights of people who choose to do so.”

Newt Gingrich offered a historical perspective, “The Liberals have already tried the vampire route — they have been sucking the lifeblood out of our economy for the past three years. I mean, just take a close look at Harry Reid — that man does not even try to camouflage the fact that he is a blood sucker. It was bound to happen that eventually the Liberals would devolve into the walking dead. While an individual Liberal may be pathetic and disgusting, it is only when they congregate in hordes that they become dangerous.”

A former Enron defendant drew a connection to his own experiences, “It’s an ‘open secret’ that the Department of Justice is staffed by ghouls. When federal prosecutor, John Kroger, said that the DOJ’s Enron Task Force wanted ‘scalps’, he meant it literally. My own belief is that what we are seeing with the protesters is the migration of the federal virus into the broader population. It hit the Liberals first because they are in bed with the federal government. But eventually, the out-of-control government virus is a danger to us all.”

Mr. and Mrs. Enron

Big has never owned a house before. He says real estate is a bad investment. Even so, I desperately wanted a real house to start our marriage. I wanted a place where, no matter how far we wandered, we could return to it, and it would be something if not eternal, at least a place that we would always have for ourselves. A base of operations. A place to start from and finish in.

And Big gave it to me:

My bitchin’ kitchen:

Since we are starting this brave new life together, I wanted it to be perfect – and that means I wanted all new furniture. He just bought a brand new iron bed, which I love – it is humongous and so perfect I call it Cloud 9. We could keep that. I bought a great farmhouse trestle table a few months ago, and we’d keep that for our informal dining room. There were a few other items we both liked that would make the cut but the move was going to be mostly our personal stuff, then the day after the official move in, I’d have most of the new furniture delivered.

The night before the move-in, Big informed me his presence was required at a meeting in San Diego. It was not exactly how I imagined my first night in our new home. I was disappointed but determined not to complain. After all, I recognize he’s a busy guy and he loves his work; these things happen. Incidentally, the sparkling engagement ring on my finger ameliorates a lot of angst. (Whoever thought up the idea of diamonds to indicate betrothal, I salute you.)

Early the next morning, when it was still dark outside, I drove Big to the airport. On the curb, he said he’d call as soon as he could, then kissed me goodbye.

By seven o’clock that evening our two apartments were unpacked and comingled. The new place has some large, cavernous spaces and the lack of furniture made it feel (and look) quite empty. The empty walls and floors amplified every sound. In fact, at night, when the unfamiliar sounds were coming at me in stereo, and I did not yet have curtains up on the windows in the back of the house, it was frankly a little creep-tastic. As I took a shower, I kept thinking of the Psycho shower scene. Oh what that movie has done to generations of women who really only want to get clean and get on with their lives.

By 7pm, I noticed that Big still hadn’t called from California. It was odd; we usually keep in touch through-out the day, and I thought for sure he’d have called to make sure the move went smoothly. Even in his most busy, he always calls to say goodnight at least. I made myself a fruit salad for dinner and just sat down at the trestle table to eat it when the phone rang. Finally, grumbled and dived for it.

But the caller ID wasn’t Big’s. It was Rebecca Skilling’s. I swallowed my strawberry, took a quick sip of water, and answered.

“Does Anyone Know Something About Enron?”

It should go without saying that Yahoo Answers is not the most intelligent place to hang out. Every time I’ve had to go to Yahoo to read some news story, I’m always blown away by the stupidity of the comments, which are second only to YouTube in terms of unreadable garbage. Anyway, some one forwarded a link to me regarding a question posed on the site about Enron. I feel so sorry for whoever is paying for this kid’s education. The questions are so biased and stupid that the kid seems almost smart for not getting it. Almost.

Conversation With An Enron Executive About Zombies

I feel like I’ve been talking about zombies literally all day with Big. I’m not complaining. Talking about Zombies is my second favorite activity. I zombified Big and sent him an email with the picture.

He replied: Ugh, zombies are ugly critters.

I don’t understand the “rules” for zombies. Do they go on forever, like the Energizer bunny, even if they don’t “feed”? Does all their flesh eventually rot and fall off so that they become walking skeletons? Maybe the zombie virus prevents them from rotting entirely?

But how much of a person must be left for that person to become a zombie? Must a person die first to become a zombie? I guess if the zombie virus infects a person, that person dies and then becomes a zombie?

If cutting off their heads kills them, it must mean they have a primitive nervous system — so does that system never deteriorate?

I am so confused!

Me: I can’t believe you’d call me ugly like that. It is very hurtful. You smell like a zombie.

Big: No, I was calling my zombie self ugly!

Me: Your zombie self is beautiful because it is still you and your radiant soul, except for the brain eating. And everyone has a flaw or two. Except me. I’m the zombie queen.

Enron Zombies! Run!

It’s almost Halloween, which is the only time I can express my love for all things Zombie without looking like a freak. So I did what any rational person would do and found a zombification program and then proceeded to zombify some Enron executives. I zombified myself too – just to level the playing field.

Here’s me: (Normally my creeptastic smile is less bloody.)

Rex Shelby: (He looks like an intelligent zombie here, like he’s really listening to what his victim has to say before he eats their brains.)

Jeff Skilling: (Mad zombie. Just run.)

Ken Rice: (Business zombie. He’s on the way to a board meeting and has no time for your foolishness).

Kevin Hannon: (He sees you. It’s too late to run. Just pray.)

Conversation With An Enron Executive About iPads

(For the sake of context, it is important to know Big and I been arguing over Apple products for three years straight. He’s just not a fan. I, on the other hand, loves me some Apple products.)

An email from Big had this link and the subject line “iPads encourage criminal activity!”

My reply: I’m refraining from pointing out that you, my beloved, are a felon and you don’t have an iPad.

His reply: Yes, but I would be a bigger felon if I did have an iPad!

McKinsey Is “Vampire Squid”

Well, I happen to heart McKinsey, but other people don’t. Like this guy, who calls McKinsey the “Vampire Squid”. Hm. Big worked at McKinsey. And I have noticed the man never ages. You don’t think…?

I fear for McKinsey. The company is beginning to attract the psychos and conspiracy theorists.

The article states:

Gupta isn’t the first bad apple to emerge from McKinsey’s ranks, or even the most infamous–at least not yet. McKinsey also taught Jeffrey Skilling how to corner California’s electricity market and make profits out of thin air as President of Enron. Nowadays, Skilling is cooling his heels in federal prison.

Right. Because working at McKinsey (or Enron) automatically makes you a criminal. This kind of thinking is infuriating. I am starting to believe that anti-capitalist people really do want us living in caves and eating snails. They seem to hate anything that is remotely sophisticated or civilizing.

A little critical thinking would do these clowns so much good. First of all, what’s so wrong with a company (McKinsey) turning out lots of CEOs and successful people? It’s difficult to actually voice that point since everything is shrouded in mysterious lighting and Jaws music, but it is the most relevant question. They imply that there is something nefarious. Well, okay, what is it? Just say it. Quit using Enron as shorthand. Spell it out.

Secondly, I’ve worked at huge banks and tiny start-ups, and I promise, none of them were at the center of a plot complex enough to involve more than three laptop computers with disparate versions of Windows. Maybe your workplace is different. Maybe you, in fact, are at the heart of some dark conspiracy. If so, the problem is you, not McKinsey. And not Enron either.

Disclosure of Michael Kopper’s Interest in Chewco

I was reading Enron’s 1999 and 2000 10Ks, as one does, and found something interesting. I’m not sure if I already knew this or not, but check this out:

What you’re looking at is Enron’s disclosure of Michael Kopper’s interest in Chewco. While I don’t believe the issue of disclosure was one that came up at any trial, I do think it is interesting that so much was made of this in October 2001. This disclosure was made in 1999. If anyone had a serious problem with it, you’d think they’d have mentioned it earlier.

Former Enron Trader Hosts Michelle Obama

Now can we stop with this Republicans Love Enron crap?

John Arnold will be hosting Michelle Obama for a fundraiser at his Houston home on November 1. There aren’t many details, but I find it lovely anyway.

Today In Enron History

Saturday, October 27, 2001

Chuck Watson met with Ken Lay at Lay’s family home. The two business leaders began to discuss the nuts and bolts of a potential merger. Dynegy didn’t want Enron’s international unit — except it would take the London trading operation. Everything else would strictly be in North America.

The company’s name? Ken Lay proposed “Enron-Dynegy”. Watson flatly refused, stating that the name Enron had become poison. If the merger would happen, it would just be Dynegy, and Watson would run it while Ken Lay would be a board member. And as for management, only Greg Whalley was welcome at Dynegy.

As for price, the opening salvo was for Dynegy to buy Enron at current market price with no added value for shareholders.

This took Ken Lay aback. The stock closed at $15.04 on Friday – and had been at over $90. Ken Lay stated that the reason the stock was zooming downward was because of short sellers and the media. The value was there – it just wasn’t being reflected in the share price.

But even if Watson wouldn’t go for it, Ken Lay knew that this had to happen fast. The company was evaporating before his very eyes. The power dynamic had shifted so dramatically. Just months ago, Enron was the biggest, baddest company in Houston. Now it was asking smaller companies for favors.

Later that day, Rick Causey met with some Anderson accountants at his office. David Duncan, Tom Bauer, and Deb Cash were given a quick presentation on Chewco. Causey described the issue with Michael Kopper’s lover, an issue that had arisen with Barclay’s (the company’s investment looked like a loan; it wasn’t, but it looked like it) and the fact that distributions were sent to Andy Fastow’s wife. Maybe troubling, but was it legal? There was still no dramatic conclusion.

And the lawyers arrived. Two partners from Weil, Gotshal’s Dallas office were shown around the trading floor. The trading guys, who were known for aggression, were determined to survive even if the rest of the company collapsed. They were not going down without a fight. Mark Haedicke, lawyer for the trading division, was the main contact for the Weil, Gotshal attorneys. Finally the went into a conference room to meet with Jeff McMahon, Greg Whalley, and some of the trading team. Ideas were tossed around. They could borrow against assets. But all the international assets were under water. They could get a private equity fund to throw some money at the trading division. They could borrow against the pipelines.

The beautiful, sleek, perfect pipelines. The assets at Enron’s foundation, the assets that brought in hundreds of millions of dollars every year. The core of Enron. Maybe, to the outside world, some value was still locked in those.

Andrew Weissman Appointed FBI General Counsel

Andrew Weissman, former head of the Enron Task Force, has been appointed general counsel of the FBI. This is a catastrophe in the making. Mark my words.

I fear for the organization that must rely on Weissman’s judgement and grace. Mr. Weissman was a heavy-handed prosecutor, a bully whose ruthlessness was matched only by his deviousness.

One Enron executive told me that Weissman would call him every day, saying that he was being indicted. When the indictment didn’t come, he’d say they were still working on it, but it would definitely be done by tomorrow. But… if he wanted to chat with Weissman, perhaps Weissman could offer some protection. He would call this person instead of this person’s attorney, and make these disgusting threats.

There are a lot of stories like this. They’re horrifying. Putting a person like this in a position of great authority is a recipe for disaster.

A Million Little Pieces

As I’m writing a daily chronicle of Enron’s collapse it occurred to me that none of it should have been enough to topple the company. Andy Fastow took about $60 million from Enron, and look at the damage it caused. The money was almost beside the point. If he’d taken five million, the result would have been the same. The act of the CFO acting dishonestly created an amplifying effect to the already bumpy stock. The tech bubble had just burst and investors were nervous – they wanted an excuse to sell. And Enron gave it to them when they fired Andy Fastow and later had to admit he’d been running a prostitution ring inside the company.

Okay that didn’t happen. But wouldn’t it have been hilarious if it had? I mean, I wouldn’t really be shocked. Everything that could go wrong, did. They were on the no catastrophe left behind plan.

If only.
If only Jeff Skilling could have endured it for a few more months and put off his retirement until 2002. If only Chanos hadn’t been such a greedy jackass and made it his personal mission in life to seed journalists with bad (and false) information about Enron. If only Rebecca Smith and John Emshwiller hadn’t been so ready and willing to do the bidding of a crazy billionaire short-seller. If only Andy’s bad acts had been discovered much sooner or much later. A month or two would have made all the difference in the world. If only the write-down had been delayed. If only. A person can go crazy trying to pin down all the tiny points of fate, trying to tease them out of the miscellaneous random stuff and try to make sense of it all.

But I have to make sense of it or I will die. Something essential inside me is nourished by the puzzle. And so I continue to sift through the pieces, trying to find something that looks like a cosmic explanation, something that will satisfy that drive inside me to know.

The perfect storm is so scary – and so hard to really wrap your mind around – because it is uncontrollable. You can’t plan for it. You can’t stop it when it’s happening. You have to just lie there, grit your teeth, and take it. And when it’s over, there’s nothing left to do but pick up a million little pieces and try to put something like a life back together again.

Today In Enron History

Friday, October 26, 2001.

The stock opened at $16 and would close at $15.40 – a loss of only 5.81% of its value. Nothing to cheer about, certainly, but when compared to the losses every day of the week, it was one of the better days.

The morning was surreal. Overnight there had been a terror threat on the Enron building so when workers got to 1400 Smith Street, they found the surrounding avenues blocked off and police everywhere. Of course, it was a false alarm but it certainly was an external representation of how everyone was feeling inside. Like things were about to go boom.

Ben Glisan was at his desk early, researching Chewco. After the WSJ published a lurid exposé the previous day, it was essential to get a handle on the deal.

From 10 to 11, Ken Lay was on the phone with Deloitte and Touche. At noon he attended an Enron board meeting, in which Glisan gave a presentation on everything he knew about Chewco.

One of the executives present at the meeting, Rodney Faldyn, didn’t like the sound of Chewco. He went to see Rick Causey and told him he felt like there might be a problem with it.

A few hours later, Faldyn and Ryan Siurek called Tom Bauer at Arthur Andersen and asked for clarification about the three percent rule. Bauer explained that three percent of an off the books partnership had to come from an independent investor in order for the partnership to be valid and comply with accounting rules.

Faldyn believed then that Chewco did not meet that standard.

Chewco had been used to buy Calper’s interest in JEDI. JEDI spun off a lot of cash – there had never been any question about the JEDI deals. But if Chewco wasn’t independent, that meant that JEDI wasn’t either, and all the income reported on every income statement, every balance sheet, every bit of information that had exited the Enron building would have been wrong, all the way back to 1997.

Ben Glisan, Rick Causey, and Rodney Faldyn met to discuss Chewco. And thus Enron was confronted with the strangest question ever to face any company anywhere: How do federal accounting laws view homosexuality?

(I need to interrupt myself to say I feel really weird talking about about Kopper’s sexuality. You don’t hear me talking about anyone else’s lover – just Kopper’s – and it’s because he’s gay. It shouldn’t be any big deal. So though I’m talking about Kopper’s love life [a place I have no business being] please know I’m really only trying to explain what was happening. I’m not singling him out or anything like that. I’m not going to discuss the sex lives on any other Enron execs. You can take that to the bank.)

If Kopper’s lover had been his lawfully wedded spouse, the whole deal would have violated accounting rules because the capital would not have come from an independent party. But Kopper wasn’t married. In the eyes of the state of Texas and the US Government, he was a single man, and his “friend” could invest whatever the heck he wanted. But he was Kopper’s live in lover. So was his investment independent or not?

Ken Lay must have felt a lead weight in his chest when he picked up the phone to call the Fed chairman, Alan Greenspan. High-flying Enron needed help, and Ken Lay probably never thought he’d see the day. He told Greenspan that Enron was having problems with its trading partners and cash was drying up. He did not ask for a bailout. He would have no doubt taken one, but he didn’t ask for one. Greenspan said he would monitor the situation. Ken Lay then put in a few other calls to his well-placed Washington friends.

After the call, he had a meeting with James Derrick (general counsel) and Rick Causey. Rick told him that they were still looking at Chewco, they hadn’t drawn any conclusions, but it looked like there might be a very serious problem with it.

That night the Enron 401(k) plan was locked down. After months of friendly reminders, Enron employees could not touch their accounts until November.

The (Supposed) Enron Employee Lockout

By October 25, 2001, Enron had sent no fewer than three emails to employees, reminding them that the Enron savings plan would be changing administrators and that they must finalize all trades by 3pm October 26 because they could not touch it again until November 20, 2001. This was the last email that went out:

Anti-Enron people screech that Enron “locked out” its employees so they couldn’t sell their stock as the price was tumbling. This is simply not true. Furthermore, Enron’s actions actually helped employees.

On October 25, 2001 the stock price closed at $16.35.

On November 19, 2001 – the day before they could sell – it closed at $9.06. It was recovering slightly after having hit a low of $8.41 during that time period. It was climbing out.

Then on November 20, 2001, there was another huge sell-off. The price fell to $6.99, losing 22.8% of the value in that single day.

The stock would last only one week after the sell-off, dropping below a dollar.