A Forbes article mentions Enron’s “venture fund”. The line that caught my attention was this one: “[Swildens] acquired Enron’s venture portfolio in a bankruptcy proceeding in 2002.”
I’m not actually interested in Swildens, of course; I am interested in Enron. So here’s some background about Enron Broadband Ventures (with some juicy EBS insider baseball). Enron Broadband Ventures was the investment arm of EBS. It had a few early successes. It invested in FastForward Networks, a software manufacturer acquired by Inktomi. It also invested in Avici, a developer of high-speed, high-bandwidth network routers. Enron acted as the company’s technical advisers to help them develop its products. Meanwhile, Enron used Avici’s routers to power the broadband trading operation.
Avici would later become ensnared in the Enron mess because LJM2 and Raptor 1 did a hedge in September 2000 for the tech firm. The DOJ says the hedge was fraudulent. When Andy Fastow pleaded guilty he stated that he backdated documents to make it appear that Enron locked in the value of its investment in Avici in August of 2000, when Avici’s stock was trading at its all time high price.
Here is an old Forbes article (January 2000) about the deal with Avici. There are some quotes by John Griebling, which frankly surprised me. Griebling, by all accounts, is a hard-core, old-school engineer, someone I personally would not select to make comments to the media. But that is just me. (On the other hand, maybe in a random act of journalism, the writers actually wanted to know about the software, not the gloss. For that, Griebling would be a good choice; I just don’t associate Forbes or Fortune or Business Week with actual journalism.)
For context, John Griebling became head of network operations and engineering about the time John Bloomer became head of products. Bloomer, Griebling, and Collins were Scott Yeager’s guys. (Stan Hanks reported directly to him, for those keeping track of these things.) Griebling was initially pretty close to Bloomer, but it became obvious after a while that Bloomer was using him. Bloomer began to trash Griebling covertly in his emails while pretending to be his friend. Griebling found out about it and the two had a falling out that was never repaired. There are some funny emails from Griebling to Bloomer in which he calls Bloomer’s process nonsense “gobbly gook”.
Griebling meant well, but most accounts indicate that he was overwhelmed by his job at EBS. One person said he was a hothead who thought he could get things done by bullying people. He once, toward the end of 1999, exploded at David Berberian in a meeting (accusing Berberian of wanting to control things, which seemed to be a regular accusation). Joe Hirko, not liking confrontation, walked away. So Rex Shelby – who is very close to David Berberian- jumped in and told Griebling he was crazy, and they needed to talk now.
In the hallway, he schooled Griebling on Berberian’s accomplishments, stating that everything tangible that had been accomplished by EBS in 1999 had Berberian’s name on it. Griebling wrote a letter of apology to Berberian that same afternoon. (A classy move, in my opinion.)
When the company collapsed, John Kroger saw him as an easy target. Griebling initially made some stupid comments to Kroger, but then he tried to backtrack and got threatened by Kroger at the Grand Jury.