Bill Collins was Director of Business Development for Enron Communications. I can not emphasize enough how very important this is: DIRECTOR. Not Vice President. Mr. Collins problems at Enron Communications began almost as soon as Scott Yeager brought him aboard. He had written a document which he called a business plan; it was not actually a business plan, it was a vague idea for two very specific functionalities of software. But he had this plan and he brought it to Enron and Joe Hirko agreed to pay him $150,000 for this plan, plus an annual salary of $105,000. He also received 70,000 stock options.
And the title of Director of Business Development.
Do you know how sometimes it’s the little things that drive you up a wall? How everything can be great but that one little glitch is the thing you obsess about? For Bill Collins, it was his title.
Bill Collins wanted that Vice President title so badly that he could taste it. He complained to Scott Yeager; he complained to Joe Hirko; he complained to anyone who would listen that he wasn’t VP. When he wasn’t complaining about his title, he was complaining about his compensation. Oh, and lying to customers. And his peers. And his bosses.
I normally have compassion for the mentally ill, so I do not take much glee in writing about the experiences Bill Collins had while at Enron. I understand that he is not in full control of his faculties.
To get an idea of what kind of personality Bill Collins was strapped with, let us turn to the Form 302 notes – that is the FBI document that is created after interviewing a subject. In this case, the 302 was from a woman who formerly worked with Collins at MFS Datanet. She told FBI agents that her job was to go with Collins on customer calls because Collins would sometimes undergo radical personality changes at unpredictable times. Her job was to calm the customer down when Collin went from smiley face to hyper-jerk in half a second. It sounds like fiction; alas, it is the sad reality.
Collins was impeached numerous times on the stand. But let’s remove that fact. Let’s just agree for a moment to conform to Bill Collins’ world where everything he says is true. These are some of Bill Collins’ claims:
He invented InterAgent.
He was going to start a company with Rex Shelby, David Berberian, Scott Smith, Scott Yeager, and some others (this one has a lot of tangents, so I will refer back to this.)
He was responsible for the idea to attend a trade show in Las Vegas. (This, incidentally might be true. What grates on my nerves about it is that he is bragging about it. He does that a lot. Everything is his idea.)
He was responsible for designing the trade show booth.
He was going to make $100 million “in the next few months”.
He also admits that “I was intolerant of opinions besides my own.” And in one of his many temper tantrums when he wanted to be made Vice President, he threatened Joe Hirko.
The big problem with Bill Collins is that he was a know-it-all and a man who just didn’t think it fair that he wasn’t getting what he deserved. He believed that because he had a journalism degree, he should be put in charge of all the press releases for Enron Communications. He believed that because he had written his stupid little plan, he should be Rex Shelby’s boss. Oh, and he hated Rex Shelby. Rex Shelby does have a tendency to drive people insane with all that hot, sexy competence and honesty. It’s a real bitch being exposed to that kind of goodness and genius every day. I love to talk about Rex Shelby, so please indulge me.
From the trial transcript:
Q. And are you friends with Mr. Rex Shelby?
On the cross with Tomko, Shelby’s counsel:
Q. Mr. Collins, my name is Ed Tomko and I represent Mr. Shelby. You didn’t like Mr. Shelby very much, did you?
A. At the time I worked at Enron?
Q. Yes, sir.
A. We didn’t have a personal relationship.
And later, still on the cross with Tomko:
Q. Now, were you trying to get rid of Rex Shelby?
A. I — I was holding him and his organization accountable for the lack of progress that we were making, and I’m expressing the view that we could be better off without
Q. Now, did you discuss this idea with Mr. Yeager?
Q. And what was his response?
A. He was not in favor of it. He wasn’t in favor of it.
Later, he claims that he and Rex Shelby, Scott Yeager, Scott Smith and the gang were going to start a business based on his great business plan. Now, at the time, Mr. Shelby already had a very successful company called Modulus. But this is actually an unwittingly great point for the defense. If Mr. Shelby is greedy and wants to pump and dump the stock, why start another company with Yeager, Collins and the gang instead of selling his company to Enron? Well, we don’t have to worry about that because there was never a plan for these guys to go into business together and indeed, once they were all at Enron, Collins tried mightily to get Rex and David Berberian kicked out.
How? By trying to sell Modulus to Sun.
At this time, Modulus and Sun had been in bed together for years. Sun loved Modulus. The executives and engineers at Sun thought the Modulus gang was the cat’s pajamas. Modulus created the industry’s first JMS-compliant toolkit. Sun had them demonstrate it on stage at the 1998 JavaOne conference. Any of the Modulus guys could have walked in the front door of Sun and been feted like a king. Sun even offered to buy Modulus. Shelby declined that offer and went with Enron.
Bill Collins trying to encourage Sun to take over Modulus would be like somebody asking me to please, please, I beg of you, write about Enron.
Obviously, Bill Collins had a problem with the Modulus gang. Meanwhile, Bill Collins was not even a blip on the radar of the Modulus men; they were too busy working and building the Broadband Operating System to pay much attention to him. Collins tended to alienate people easily – undermining them and their projects when he felt he should get more credit for his contributions. You will find this a common theme with Bill. It’s all about his title, his compensation, his stock, his visibility, his worth. (I described Bill Collins recently as, “Toxic, the kind of guy you can’t get away from. I get the sense he would follow you into the bathroom to remind you that he deserves a promotion and a raise.”)
In December 1999 Enron Communications wanted a deal with Microsoft. Collins believed that Microsoft would not want the deal if it knew how cozy Enron and Sun were together (because Sun and Microsoft were obviously very competitive.) In his interactions with Microsoft, Collins never used the words “Broadband Operating System” or “BOS”, believing this would somehow tip them off that they were in bed with Sun. (Please do not look for logic in this; there isn’t any.)
One afternoon while Collins was meeting with a guy in the Microsoft CFO’s office, Jeff Skilling and David Berbarian were meeting with Steve Ballmer. Skilling did not care to obfuscate the issue and told Ballmer about the BOS (as any honest executive would, I might add.) Shortly after that meeting, Mr. Hirko informed Collins that all communication with Microsoft would go through Skilling or another executive, Managing Director Rich DiMichele.
But Collins felt he had a better handle on the situation that either CEO Skilling or CEO Hirko. After Hirko took the Microsoft deal from him, Collins sent the Microsoft CFO an email stating, “we are prepared to take ECI public with Microsoft as a shareholder of something on the order of 3 percent of the company for something on the order of $200 million.”
At trial, Hirko’s attorney, David Angeli, dug in to this.
Q. So, you were communicating with Microsoft here about the equity issue, right?
Q. And, in fact, you weren’t being truthful with, Microsoft were you, when you said that you were prepared to take ECI public?
A. I was not being truthful.
Why lie, particularly after you’ve been pulled off the entire project? Who knows. You’re in Collins-ville, it doesn’t have to make sense.
While he disliked Rex Shelby and the Modulus gang, he had more ambivalent feelings for Scott Yeager.
Tony Canales, counsel for Scott Yeager, is a fine attorney and very unusual in that he often uses humor to make his point. Very few attorneys can do that gracefully, and Canales excels. But anytime I see him being funny, I tense up. I know he’s about to come out of nowhere and rip some guy’s head off (which is why I love Tony Canales the way I do.)
Canales asked Collins to describe his relationship with Scott Yeager. Collins said, “It was like a marriage….I would describe it as a relationship with a lot of ups and a lot of downs.”
Well, that’s all Canales needed. I’ll let the transcript speak for itself for the rest of this:
Q. Did you, sir, at any point in time describe your relationship to Mr. Yeager as a marriage without sex?
Q. Now, was that ever a good marriage, by the way?
A. Indeed, it was.
Q. Did the marriage turn sour?
A. At times.
Q. Was the marriage confrontational?
Q. Were you the cause of the break up of that marriage?
A. I believe there’s two sides to every story.
Q. Yes. Do you agree, sir, that you are the kind of person that — at least you’ve described — have you ever described yourself as a person with a chip on his shoulder?
Q. What does that mean?
A. It means I struggle emotionally with all kinds of things.
And there he goes, bleeding all over the courtroom. Huge, giant red flag for the jury to see, and Tony Canales standing there looking innocent as a choir boy. Canales didn’t let this go. Oh no, he would ask about “the marriage” a few more times, and each time, it seems more and more emasculating for Collins (and each time, Canales is increasingly funny.)
Q. At some time you liked Mr. DiMichele, you wanted to go — transfer from the section you were in, sales, to corporate development, correct? That’s what you are expressing in
your thoughts here?
A. Generally speaking, yes.
Q. What happened to Scott? What happened to that marriage? You got divorced by this time?
I have to wonder what Scott Yeager was thinking – especially with his lovely wife in the room – listening to this. Hopefully he found it as amusing as I did.
In February of 1999, Bill Collins received a formal reprimand. In a meeting with eight people, he began undermining other groups and people, and promoting himself, complaining that he wasn’t getting the credit he deserved, and he ended up threatening Joe Hirko. Scott Yeager wrote up a formal reprimand and asked Collins to take a week to cool off, which he did. When Collins returned, he wrote an apologetic letter, stating that he would try to improve his attitude and he was committed to the success of the company.
He lasted about another year. Right before the analyst conference of January 20, 2000, Collins decided that Wall Street was going to hate EBS and their silly Broadband Operating System so he sold the stock that had vested. He received about $240,000 for that stock sale. At trial, he openly admits he traded on inside information:
Q. And when you sold your stock, did you have information about the status of the products and the business that had not been made public?
A. Yes, I did.
Q. And was that information that you thought was important?
Q. Were you concerned at the time you sold that you were doing something wrong?
A. The thought crossed my mind.
Q. But you sold anyway?
So he sold his stock and of course, we all know that soon after the conference: Enron’s stock skyrocketed. Collins missed out. He violated his non-compete agreement to go work for another company Vectrix, with Shawna Meyer and her lover Jim Irvine. The reason he left? Vectrix would give him the title of Vice President.
Canales asked what else Collins would receive at Vectrix, a pre-IPO company. Collins replied he would receive 1% equity in the company. Canales asked what happened to the company. It went bankrupt.
Collins never made as much money as he did at Enron. But he did have the title of Vice President, finally, for about six months.
Two months after he left, he got in a reflective mood and then he got chatty. He sent Ken Rice a letter stating that as part of his compensation, he wanted the stock options that had not vested when he left Enron, and would Ken Rice please be a gentleman and give him the reasonable 85 percent of the value of the stock – about $15 million dollars.
When he could stop laughing, Ken Rice forwarded the letter to the EBS attorney, Kristina Mordaunt. Mordaunt replied, very reasonably, that he was not entitled to options that had not vested after he voluntarily departed the company, and she added that she would like him to forward a list of his current job duties because it sounded, from the letter, like he was competing now with EBS.
He did not reply.
But in his mind, Bill Collins had been snubbed by Enron Broadband Services once again. He didn’t get his title, he didn’t get the compensation he so richly deserved, he didn’t get compensated fairly for his business plan and he didn’t get the $15 million he would have made if he had held on for three more weeks. Enron was robbing him blind!
Oddly, Rex Shelby was partially to blame for this. (I get the feeling that everytime Collins turned around, he sneered, “Shelby!” like Seinfeld sneering, “Newman!”)
From the trial transcript:
Q. And what was the purpose of writing this letter to Mr. Rice?
A. Well, obviously, I guessed wrong about the effect that the announcement would have on the stock price. And I told Mr. Rice that — I argued that there was a case to be made
that I was still entitled to some of those shares and that wanted him to agree to give them to me.
Q. Sir, did you not tell — did you, sir, or did you not in this letter tell Mr. Ken Rice that your concepts and your ideas regarding the BOS and so forth were taken over by Rex Shelby?
A. I believe I said Mr. Shelby and Mr. Berberian, yes.
I would like to list for you Modulus’ client base:
Wells Fargo Bank
Substantial clients, wouldn’t you say? And so how on earth was Modulus ever able to snag these customers without Bill Collins stupid plan? I guess they were just sort of pretending to be successful when they were Modulus and then when Enron bought them, the Modulus gang suddenly had to appropriate the business plan of a journalism major who has no MBA, no master’s degree, no PhD, no technical degree of any description, and no technical experience at all.
But to address Collins’ larger point, he felt that Rex Shelby and David Berberian were responsible for taking over his plan and thus, depriving him (once again) of the credit he so richly deserved.
Eighteen months after he left the company, he sent Scott Yeager a letter. The letter apologized for being a giant pain in the ass. He also added that Scott had made it possible for him to be financially secure for the first time in his life – he bought a home and a vacation home, he had given money to all his brothers and sisters, and he finally felt he could relax. He also thanked Scott for giving him the business opportunities that he had.
After all the crap Bill Collins had put him through, Scott wisely did not reply. But as always with Collins, his good feelings about Scott Yeager began to evaporate (again… you know how marriages can be) and when the FBI contacted him about their investigation into EBS, Collins volunteered to give as much information as he could about the people who worked there. He sent emails from his personal computer to an FBI agent and John Kroger, who was eyeballing Scott Yeager, Rex Shelby, Joe Hirko, and Ken Rice for an indictment.
Bill Collins has genuine mental/emotional problems, as he admitted on the stand. That does not give him a pass to make up fantasies on the stand and portray them as truth. It is even more egregious for the United States Government to take advantage of someone in such a compromised position.