All About Rex’s Community Service

Rex Shelby, the last man standing in the Enron cases, remains one of the most popular topics among readers of this blog. A previous post about Paris Hilton and Rex Shelby made me curious about what Rex did for his community service. So I did some investigating — what I discovered is amazing!

Rex Shelby’s community service requirement was 230 hours. I have found that most people get brainless assignments that require little of them (in terms of initiative or creativity) and which have little lasting impact — therefore, the people typically put little effort into the service — they do their time and that’s it. I understand that Rex requested of the Probation Office that it assign him something challenging through which he could really accomplish something useful.

Therefore, the Probation Office assigned Rex to an organization that helps the most desperate people in society learn how to find jobs. The organization teaches people how to search for jobs, how to write resumes, how to interview, etc. It makes sure they have clothes for a job interview. The organization makes sure that the people learn the basic computer skills needed to find jobs in today’s world — it makes sure all the people have an email account, for example. The mission of the organization is to move jobless people into jobs.

Rex Shelby helped the organization in a number of ways, but his core responsibility was to work with people to create resumes and cover letters to apply for jobs they wanted. Rex helped the homeless, veterans, ex-cons, disabled people, people with little education, recent immigrants, etc. — the most needy among us, in other words. Within his 230 hours of community service, Rex worked with more than 200 “clients”. He routinely worked hours that he didn’t count against his official total. He became a popular worker at the organization among the people needing help — people requested him by name because of what they heard from others he had worked with — people gravitated to him because he was kind to them and because he had a high success rate — he became known as “Mr. Rex” among his many Hispanic clients. Rex continued to help the organization long after his formal community service obligation had been met.

I understand that the organization has contacted the Probation Office several times to ask for more people like Rex Shelby. The Probation Office has told the organization that “unfortunately, we cannot find any more people like Rex.”

I am not surprised at what Rex Shelby was able to accomplish at that organization — it is consistent with his professional and personal history. What amazes me is that Rex, an innocent man who was falsely indicted by the government and has reason to be bitter and angry, shows no signs of either emotion and has been willing to contribute so much to others during his inane and worthless punishment phase.

This story just reinforces my disdain for the Department of Justice, the Enron Task Force, and the slimy prosecutors who hounded Rex Shelby and the other Enron Broadband defendants. Rex makes those prosecutors look small.

Halfway To Nowhere

This recent report on the failure of halfway houses is no surprise to me. I have talked with a number of the ex-Enron people who spent time at the halfway house in Houston, and their reports were uniformly negative regarding the ability of that halfway house to accomplish its mission. Plus, the entire American system of incarceration is geared toward punishment, not rehabilitation. Therefore, it should be of no surprise that people leave American prisons and halfway houses ready to return to crime.

By way of background, halfway houses were created as transition points to prepare people who are near the end of their prison terms for re-emergence into society. For ex-cons, re-connecting with families and getting an honest job are monumental tasks after languishing in prison for years, especially with a felony conviction on their record. The halfway house staff is supposed to help the ex-cons with the many crucial tasks they face, such as getting a new driver’s license, getting a new social security card, searching for a job, etc. A decent job is really the only thing that is likely to prevent an ex-con from returning to crime — without a job, or the understanding of how to look for one, an ex-con is eventually going to return to crime.

If the halfway house in Houston is representative of those around the country, then a big problem is that they are not staffed with people who could perform the mission of the halfway house, even if they fervently tried. I have been told that the staff of the Houston halfway house is only marginally capable of even the most basic tasks, such as filling out simple forms. The idea that those people could assist ex-cons in any meaningful way is a fantasy. In addition, the Houston facilities themselves are cramped and filthy, the food is worse than prison food, there is no space for vigorous exercise, and there is nothing at the facility to stimulate the hundreds of inmates other than a single television set. So the people at the facility are poorly nourished, under-exercised, under-stimulated, and subject to the supervision of a marginally functional staff. How could anything good possibly result from that situation?

One of the ex-Enron people who spent time at the Houston halfway house told me that the biggest impact of the halfway house on the inmates is to drive their respect of the criminal justice system even lower. They see a system that, at best, is indifferent to them, and this mirrors American society as a whole. In the USA, we are quick to throw people into a prison system that does not even attempt rehabilitation, we continue to treat ex-cons with suspicion and restrictions after they emerge from the dysfunctional prison system, and then we express shock that recidivism in America is so high.

The Enron people who spent time in halfway houses are the rare exceptions to the dismal statistics — they already had excellent work skills and knew how to hunt for jobs. Therefore, the Enron people emerge from the halfway houses with a lowered opinion of the government’s competence (“they can’t even operate a halfway house”), but fully capable of re-integrating into society without anybody’s help. For the Enron people, their time in halfway houses was like spending time in an asylum run by the inmates — an institution that was so obviously dysfunctional that it perplexed them why people were not outraged at the obvious worthlessness of it all. I suspect that the Enron people who spent time in a halfway house, such as Rex Shelby, did more to help the ex-cons there than the halfway house staff.

If the government had any sense, they would run as quickly as possible to the ex-Enron people and beg them to take on the task of revamping the halfway house system in America. The federal and state governments have failed miserably, but I am sure the ex-Enron people could handle the job!

So When Does The Government Present Its Case?

As I have researched the Enron Broadband Services (EBS) case, I have discovered that many of the defendants and defense attorneys had a great sense of humor. I have already pointed out in other posts a number of the funny lines from attorneys that I found in the EBS trial transcripts. Here is a funny (and serious) story involving EBS defendant, Rex Shelby.

At a criminal trial, the prosecutors present their case first — this is the big chance for the prosecutors to make their case. The prosecutors call their witnesses to the stand and try to develop their “theory” of the case in a way that will convince the jurors that their version of events is believable and that the defendants are guilty of crimes. As each prosecution witnesses takes the stand, they are first questioned by the prosecutors, and then cross-examined by the defense attorneys. After the prosecutors have called and questioned all their witnesses, they “rest their case”. At that point, the defense team gets to call their witnesses and present the defendant’s case.

Well, by all accounts, the prosecutors did a miserable job of presenting their case during the EBS trial. It is not that the prosecutors were incompetent — indeed, they were the best attorneys the Department of Justice could round up. The problem was simply that the prosecutors had no case in the first place. The prosecution witnesses were heavily coached, and their interactions with the prosecutors had been totally scripted. The extent of the coaching became obvious when the prosecution witnesses were cross-examined by the defense attorneys. The testimony of the prosecution witnesses, so laboriously constructed and coached by the prosecutors, fell apart under questioning by the defense attorneys. It was not that the defense attorneys were aggressive or hostile with the witnesses — to the contrary, the defense attorneys were more cordial than the prosecutors. The problem was that the prosecutors had constructed a house-of-cards version of events at EBS which collapsed under even the most basic cross-examination.

This situation led to the funny line by Rex Shelby. Immediately after the lead federal prosecutor, Ben Campbell, rose to his feet and announced to the judge, “Your Honor, the Government rests its case,” defendant Rex Shelby turned to his attorney, Ed Tomko, and (sardonically) asked, “So tell me again … when does the government present its case?”

The defense attorneys agreed with Rex’s observation that the prosecutors had completely failed to meet their burden of proof — there was not simply reasonable doubt of the defendants’ guilt — there was doubt that the government even had any basis for indicting the defendants in the first place! Ironically, the defense attorneys’ success at cross-examining the prosecution witnesses presented them with a difficult tactical decision. The defense team now had a good option to rest the defense case quickly, either without presenting any witnesses at all or perhaps by limiting their witnesses to only the EBS defendants themselves.

In a world in which attorneys could be confident that jurors had no biases and that they understood the principles of “burden of proof” and “reasonable doubt”, the decision would have been easy for the defense team — it was obvious that, in the legal sense, the government had totally failed to meet their burden. However, the defense team knew that the jurors came to the trial with huge anti-Enron biases — therefore, they believed that, at a minimum, the jurors must see the defendants on the stand, answering questions. As a result, the defense team did present their case by calling defense witnesses, including all five of the EBS defendants.

In the end, Rex Shelby had called it right — even given the overwhelming anti-Enron hysteria at the time of the trial, so dismal had the prosecutors’ case been that they got zero convictions after a trial that lasted more than three months and cost the taxpayers tens of millions of dollars. And after all my research on EBS, I still agree with Rex’s observation — I still wonder what kind of case the prosecutors thought they had in the first place, because the case the government presented at the EBS trial makes no sense!

Enron Broadband Ventures

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.

Paris Hilton and Rex Shelby

I never thought I’d see former Enron Broadband executive Rex Shelby mentioned in the same breath as Paris Hilton – especially mentioned in an article about immigration – but I guess there is a first time for everything.

Via NY Daily News:

Thousands of sentences to community service are handed down every month in this country. Courts across the United States have imposed such sentences on celebrities (Lindsay Lohan, Paris Hilton) and professionals (former Enron executive Rex Shelby, Medicaid fraud doctors).

Paris Hilton has a way of making even Enron and community service seem seedy.

Legal Impoverishment

The impoverishment of defendants is a basic strategy of federal prosecutors. Prosecutors use impoverishment as a means to cripple the ability of an accused person to defend himself. This, of course, gives the prosecutors a huge built-in advantage over the defendant in plea bargaining and in trial preparation.

First, the prosecutors seize as much of a defendant’s assets as they can get away with, including the defendant’s life savings — this is money not available to the defendant to fund his defense. Then, they force a defendant into the incredibly expensive task of trying to defend himself against the wealthiest entity in the world, the U.S. federal government. As one Enron defendant told me:

“Fighting the federal government cannot be done halfway. To have any chance at all of defending yourself, you must decide that you are willing to put everything on the line, including everything you have earned over your lifetime. You must do this because you know you are fighting an organization without a conscience which wants only to win, and it will do anything it can get away with to beat you. Guilt or innocence, right or wrong, justice, the facts … these are of no concern to federal prosecutors after an indictment has been brought — they only want your scalp.”

A defendant knows that, if he actually exercises his Constitutional right to defend himself, he is likely to lose most or all of his life savings — this is true whether the defendant wins or loses at trial or in the appeals court. As I wrote in an earlier post, “being a prosecutor means never having to say you’re sorry.”

Is it any wonder that trial by jury is so rare? It should be a national embarrassment that 97% of all federal cases pursued by the Department of Justice (DOJ) last year were resolved by guilty pleas, not by trials. In the American system of justice, a defendant must be bold, almost to the point of rashness, to try to defend himself at trial — just getting to trial is likely to impoverish his family. A plea bargain deal is simply good economics for most defendants — pleading guilty of some crime is usually the best practical decision for a defendant, even when he is innocent.

Let me give you three examples of the Feds’ use of impoverishment in the Enron Broadband Services (EBS) cases.

Michael Krautz, an accounting executive at EBS, was acquitted of all charges after two trials. Michael not only lost his savings, but he also went into debt defending himself — and when he was exonerated, he was still in debt.

Scott Yeager, a marketing executive, won acquittals at trial and then was re-indicted by the Feds and threatened with a second trial. Scott eventually had all charges dismissed based on an appeals victory at the Supreme Court. However, even in “victory”, Scott could not recover his life savings, most of which were lost in his defense.

Rex Shelby, a software engineering executive, also won acquittals at trial and then was re-indicted by the Feds and threatened with a second trial. Rex was ready and eager to go to trial, but exhausted all his life savings and could not afford the expense of a second trial. He entered into an obviously contrived plea deal — the deal itself was favorable to Rex. However, the tragedy of this example is that Rex wanted to go to trial to exonerate himself, but had been so impoverished by the Feds that he could not afford to do so.

These EBS examples are not rare — just about any attorney can give you lots of additional examples. Clearly, the strategy of impoverishment has served the federal government well, but has done so at the expense of justice and fairness.

Impoverishment is an extra-legal practice that needs to end. I will follow this post up with another post in which I propose some reforms for ending the practice of impoverishment.

How Many Prosecutors Does It Take To Fight A Software Engineer?

Here is the list of the lead prosecutors (each of which had their own team of additional prosecutors and other DOJ/FBI staff) that Rex Shelby beat or exhausted before he himself ran out of money for his defense:

John Kroger – Presently the Attorney General of Oregon.

Sean Berkowitz – Presently Global Chair of Litigation at Latham & Watkins, based in the Chicago office.

Ben Campbell – Presently a Partner in the NY office of Latham & Watkins.

Lisa Monaco – Presently Assistant Attorney General for National Security, Justice Department.

Van Vincent – Presently Assistant U.S. Attorney, U.S. Department of Justice, Nashville, TN.

Jonathan Lopez – Presently Deputy Chief, Money Laundering and Bank Integrity at U.S. Department of Justice, Washington, DC.

Jack Patrick – Senior Litigation Counsel at the DOJ, recently prosecuted Allen Stanford.

Peter Katz – Principal at Berkeley Research Group in New York, NY.

The heads of the Enron Task Force that Rex also beat were:

Leslie Caldwell – Presently co-chair of Morgan Lewis’s Corporate Investigations and White Collar Practice, New York, NY.

Andrew Weissman – General Counsel for the FBI.

Sean Berkowitz- See above.

Wow, no wonder the DOJ was so eager to do a plea deal with Rex. Would you want to face the guy at trial who beat this list of prosecutors?!

Who Is Rex Shelby?

This was a search term on my blog recently. It reminded me of “Who is John Galt?” from Atlas Shrugged. This fits because Rex Shelby is like a character from an Ayn Rand novel. Rex is the guy who battled the Feds the longest — he fought tooth and nail until he depleted his personal savings. Rex was the first of the Enron Broadband defendants to take the stand to speak in his own defense and the last to resolve his case.

As I’ve pointed out before on this blog, I have never talked with anyone, including prosecution witnesses, who believe that Rex Shelby is guilty of any criminal activity. And the people who know him well and have worked most closely with him insist that he is simply incapable of anything criminal. And, based on the plea deal he negotiated and the sentence he got, the prosecutors and the judge did not believe him to be guilty of anything either.

Anyway, today is the one-year anniversary of Rex Shelby’s sentencing hearing. How time flies when you’re being punished! Rex has flown through all the most onerous parts of his sentence — halfway house, home confinement, community service — all while maintaining a full-time job in a small software company. Rex has been more productive while under punishment than most people are in their normal lives!

I also find it appropriate that this anniversary falls on the same day as a hearing on the Stevens bill in Washington, D.C. The Stevens bill is an attempt to force prosecutors to actually uphold their Brady obligations which require them to identify evidence favorable to the defendants. The failure of the Enron Task Force prosecutors to uphold this basic obligation is one of the abuses that Rex identified in the prosecutorial misconduct motion he filed during his case. Let’s hope that the Stevens bill will help prevent prosecutors from doing to others what they got away with doing to Rex. I encourage you to write your Senators and Congressmen in support of this legislation.

When Is A Conspiracy Not A Conspiracy?

It is usually counter-productive for me to check out the HuffPo because I fundamentally disagree with just about every sentiment expressed in that liberal fever swamp. Today was par for the course, but Enron was mentioned. I had to chime in.

At HuffPo, a writer is screaming for more regulation and wondering why more bankers are not in prison for the 2008 financial meltdown. The reason is simple: the bankers were making home loans available to anyone regardless of whether they would be paid back – as was dictated under the Community Reinvestment Act. The people who enacted that are in congress and congress will not indict themselves.

So the writer quotes – of all people – Loren Steffy, who has made a career out of hating business and Enron in particular:

Three years ago, I asked Sam Buell, the former federal prosecutor in the government’s effort to indict Enron’s Jeff Skilling, the question of whether we’d see widespread prosecutions from the financial crisis. His prediction: Don’t count on it. As I wrote at the time:

In the current crisis, few people understood the complex debt instruments that had become common on Wall Street and therefore the firms failed to make good risk assessments. But what they were doing — such as packaging dodgy mortgages into investment pools that were supposed to minimize risk — was widely known.

“It’s not a conspiracy if everybody’s in on it,” Buell said. “In order to have a fraud conspiracy you’ve got to have some effort by one group to deceived another group.”

But what about the fact that America as whole seems deceived by what happened? Doesn’t matter, Buell argues. Just because Main Street didn’t understand what was happening doesn’t make it a fraud. Those who are stand-ins for investor interest — regulators, brokers, credit agencies — “seem to have known what was going on,” he said.

Sometimes I am actually embarrassed for Loren Steffy. I have said stupid things too, but usually I try to keep them to a minimum. Steffy, on the other hand, proudly flaunts his stupidity like a badge of honor.
That question: “what about the fact that America as a whole seems deceived by what happened?” is just embarrassingly inane.

If that were the standard, incidentally, we would not have a federal government, particularly a Department of Defense. The ignorance of the general populous does not create the legal grounds for conspiracy – not even for the much-despised Enron.

Buell is right, of course. There was no group of people inside Enron who were trying to deceive anyone else. I’ve always marveled that according to the naysayers, Enron managed to hire people from the mailroom to the C-Suite who were criminals. Oh, and they also did business with criminals: NatWest, Merrill Lynch, Vinson & Elkins, Arthur Andersen, Citigroup and McKinsey. And Ken Rice was actually involved in two conspiracies! One in Corporate and one at EBS. And Scott Yeager was so deceptive that he not only fooled everyone at EBS, he managed to fool Jeff Skilling too! And Jeff Skilling was also involved in a conspiracy!

How exactly is this supposed to work? How was Enron able to not only hire a statistically impossible number of criminals, but also just happen to find all the other criminals in its partner organizations? Only five people went to prison for the Watergate scandal (seven were indicted). And yet, eighteen went to prison for Enron – 36 were indicted. Was Enron really that much larger than Watergate? How was it that all these smaller conspiracies were taking place inside this much larger conspiracy? The EBS conspiracy is just ridiculous. Rex Shelby, Joe Hirko and Scott Yeager didn’t know each other outside of work. Rex and Scott had worked on one project before. But why would they agree to conspire illegally with Joe Hirko, who neither one knew? And why would Joe Hirko, who is known as a gentle, kind man decide to start fucking over Enron?

At Corporate, the conspiracies are just absurd. Jeff Skilling supposedly took reserves and added it to the earnings – while at the same time hiding earnings from wholesale. Why? If Enron was in trouble, there were thousands of things he could do to fix it. Such as start cutting costs. But during that time, Enron was buying new jets. If there was a problem, they could have delayed delivery. Jeff could have written a check for millions and laundered it through Andy Fastow and his SPEs, since that’s what the DOJ says happened at Southampton with Ben Glisan, Kristina Mordaunt, and the NatWest bankers. If he and Andy Fastow were already committing multiple felonies every day, what is one more? Why not just make up the loss with a personal check? Or he could have even done it openly and bought some of Enron’s art*. Yet the man who supposedly thought up all kinds of crazy scams just didn’t bother to anything wacky to fix this supposed earnings gap, other than take reserves which was possibly the sloppiest method known to mankind.

The idea that a bunch of smart guys who were already multimillionaires got together and then started conspiring to commit fraud is just laughable. It makes no sense at all. There was no fraud or conspiracy at Enron Corporation.

*There was a story in, I think, 2007 or 2008 where a company declared in its 10-K that the CEO had bought some art from the company and had paid something like $5 million for it. I wish I could find the details, but it was on footnoted.com, which has become a Morningstar company and I can no longer find it.

Enron Execs In Handcuffs

This is the week of the collapse of Enron Corporation so there are a lot of pictures of Enron execs, most of them coming to and from the court house. One trend is to show them in handcuffs if at all possible. Earlier today, the Chron switched out a normal picture of Rex Shelby for this one:

I really hate this picture. It is frightening. Rex Shelby is looking down because he is about to head down some narrow steps, but it looks like he’s ashamed. He had nothing to be ashamed of. If you notice, the agents are also looking down as they approach the steps. Furthermore, I’ve heard from someone who would know that he was actually pleasantly surprised by the FBI agents who arrested him — I hear that they got along well. One of them tried to shield him from the cameras, but he had to step back as they approached the narrow steps — that is when one of the camera slugs, who were camping at the courthouse in those days, managed to grab a photo, I guess.

The purpose of the perp walk is to humiliate the accused and put an image in the minds of media consumers that he is guilty. He’s in handcuffs, so he must be guilty.

The worst one in my opinion is a tie between Ben Glisan and Andy Fastow. Both were wearing chains. But look at this picture of Andy Fastow:

Seriously? Chains? Why? The FBI had taken his belt and his necktie in this photo, then bound his hands. It is painful to look at. His face is so sweet in this picture too – he looks daunted by what has happened to him.

They put Ben Glisan in chains too, but interestingly when he was arrested, they allowed him to cover his hands with his jacket (notice he is without a tie and belt too):

It is disgusting. None of the Enron executives were violent. None protested when they were arrested. And they were treated like violent murderers. When I see images like this, I just think the media beast is being fed. Absolutely must show them in handcuffs or else the public might get the wrong idea, like that maybe they’re innocent. Can’t have that!

Enron Year 2000 10-K Disclosure: Broadband

I found an interesting risk related disclosure in Enron’s Year 2000 10-K. It is regarding Broadband.

In 2001, Broadband Services expects to continue
to expand the commercial roll-out of its content service
offerings including video-on-demand.

There are literally hundreds of examples of statements like these (i.e., “forward looking statements”) spread through analyst conference books, financial disclosures, press releases and other media. Enron – and Jeff Skilling – were very clear about the status of Enron Broadband Services.

A version had been up and running since 1999. The company streamed the Country Music Awards, an Andre Agassi tennis match and a Drew Carey show. But like Rex Shelby said on the stand, “Software is not complete until it is obsolete.”

Yet prosecutors and even some ordinary folks still claim that the EIN was vaporware. It doesn’t make Enron look criminal; it makes the accusers look foolish.

The Skinny on Rex Shelby

So Rex Shelby has completed the guts of his sentence. I understand that there is still some ordinary probation to endure, but the tougher stuff, the halfway house and home confinement, is over for Rex. It was stupid and useless for the Feds to put him through that nonsense, so I am happy for him that it is over.

It is poetic that Rex Shelby ends his sentence right in the middle of the Enron ten-year anniversary events. Rex fought the federal prosecutors of the DOJ longer than any other Enron defendant. Yes, there are still some appeals ongoing in other cases, but those are occurring after a decision of some kind was made in those defendants’ cases. Rex fought the DOJ to a standstill for more than eight years before there was a conclusion of any sort in his case! And he faced down nine lead federal prosecutors in charge of his case over time, each with their own staff of additional prosecutors, agents, clerks, and office workers. I marvel at this because I cannot comprehend how he did it without collapsing from exhaustion.

Rex Shelby was first interviewed by the FBI in August 2002. He was indicted on 20 criminal counts in May 2003. He endured a 3-and-a-half month trial in 2005 after which 14 of the 20 counts were acquitted by jury or judge. This left 6 counts on which the jury hung (I hear the majority of the jury voted to acquit on those 6 counts as well). The DOJ refused to dismiss those remaining 6 charges because … well, because this was Enron and they could not face the embarrassment of admitting they had no case against Rex.

Rex Shelby then went through two long appeal proceedings, each of which ended with a request to the U.S. Supreme Court to hear his case. The Supreme Court did not select Rex’s case, but they did select the case of Rex’s co-defendant, Scott Yeager, who had a similar appeal. Rex actually authored an amicus brief, in his own name, in support of Scott’s appeal, and Scott won in the Supreme Court. The Supreme Court actually supported the arguments in Rex’s amicus brief in their written decision on Scott Yeager. However, on appeal, the 5th Circuit refused to apply the Supreme Court ruling on Scott Yeager to Rex’s own case. This has to be one of the most heinous injustices of a case filled with misconduct and incompetence on the part of the DOJ and the courts.

With no money left to prepare for a second trial (which I understand Rex Shelby desperately wanted), he then negotiated his own plea deal with the DOJ. Most people would say that Rex beat the DOJ because the deal was “favorable” to Rex, but I suspect that Rex is humiliated by the fact that he eventually had to lie for the government about being guilty on a single count, something that he had dedicated all his time and money fighting to avoid for eight years. He could have negotiated a deal at any point during that fight and retained most of his life savings. Or he could simply have lied in the beginning about somebody else at Enron as the prosecution witnesses did — this would have enabled him to avoid an indictment altogether. Instead, he chose to fight the DOJ and, in doing so, he lost his life savings. But, in my opinion, he retained his integrity.

I hear that Rex Shelby harbors no bitterness about his experience and that he has already jumped right back into the high-tech entrepreneurial world that he gave up during his fight with the Feds. This is just amazing to me!

And — oh yes — I also hear that Rex Shelby is a good writer and that everybody wants to hear what he has to say about Enron Broadband. I suspect that there are few people who can be more effective at popping the bubble of the Enron Myth than Rex. I hope, hope, hope he starts writing soon!

Rex Shelby Is Free: And Now We Party!

Rex Shelby completed his home confinement yesterday, November 18. So tonight IT GOES DOWN. Everybody knows Rex Shelby is the underground party king. He’s keepin it real with the First Annual Mega Out-Of-Prison House Party Festival.

324 bands! 2 days! Live alligators! No bathrooms! Flare guns! An Easter-egg hunt for all you dumb-ass kids! Methed out coyotes! A 2-D screening of Avatar! Time-expired penicillin! And you know we got loose hawks flying all over this bitch! We got you locked in with some dope ass guests like the Menendez Brothers! Casey Anthony’s mom! And Former Surgeon General C Everet Koop! It only happens once every three or four years, when Rex Shelby completes his sentence! Don’t miss it!

Sexiest Man Alive

People Magazine has aggregated the collective conscious of tweens everywhere and pronounced Bradley Cooper the “Sexiest Man Alive.”

We here at Cara Ellison Corporation have said for years that the sexiest men alive are Enron defendants. So today, I pronounce Rex Shelby, Jeff Skilling, and of course, ANDY FASTOW the sexiest men alive.

How can I pick just one? They’re all so sexy in different ways. Rex Shelby looks British, therefore he’s sexy (which means the NatWest Three are also the sexiest men alive!) Jeff Skilling is sexy because he’s the wrongly accused hero and he’s gorgeous with those blazing blue eyes and sharp jaw.

And Andy Fastow is the sexiest man alive because he’s just so damn hot. So very very hot. The hottest of the hot. Sexxy hot. Almost sexier than Big! That’s how sexy he is.

And he should totally get in touch with me. Bring on the sexy!

Bethany McLean Writes About Enron (Still and Again)

The doyenne of yellow journalism is at it again! Mizz Berkowitz writes:

Over a decade ago, when I started investigating what had gone wrong at Enron, I remember thinking that I’d be able to call up former Enron employees, and once I got them talking, ask them, “So how’d you do it? How’d you pull it off?” I figured that at a company that became the poster child for corrupt corporate culture, the people who worked there must have been aware of it. But I quickly learned that many people who worked at Enron had no clue. To some, even after its scandalous 2001 bankruptcy, Enron would remain the most dynamic place they had ever worked, a place where people thought they were changing the world.

It is a radical idea but maybe they didn’t know because they committed no fraud? I mean, it is a possibility, right? My best friend, a girl named Occam, has a razor that says this is definitely a possibility.

Incidentally Enron still remains the most dynamic company in the decade of the 1990s and even well into our sad century. There are two companies – Apple and Google – who venture close to what Enron tried to do. But if Enron had been allowed to live, the technologies we are playing with in 2012 would have been passé even in 2000. Thanks, DOJ.

There are a few reasons why it is that even the ultimate insiders — employees — don’t always see the real story. One is the human capacity for self-delusion, especially when there’s money — lots of money — at stake. Enron, with its gorgeous offices and soaring stock price, seemed too prosperous for there to be serious problems. And who would want to see through that facade? Not the people who thought they could make fortunes by staying on the playing field.

This always amuses me – the idea that anyone can be bought. Did you know Ken Rice lost $100 million? What kind of idiot loses that kind of money if all he cares about is money? Did you know Rex Shelby’s salary was deferred and he put every penny he could into his savings account? Again, why put the money in the most vulnerable place if all you care about is money?

Jeff Skilling and Ken Lay lost fortunes. They lost more than anyone else. If they were ripping off the company, wouldn’t they have quietly begun to get the hell out of that company? For people who supposedly love money above everything else, these were some very odd actions.

Furthermore, if Enron was a fraud, why are its technologies and pipelines making other companies billions of dollars? Why would the studious, serious engineers like Larry Ciscon, Mark Palmer, Ellis Giles, and David Berbarian be seduced by mere money, only to lose it all, and then continue their careers doing the same thing that they’d lost all their money on?

I believe it is difficult for people who don’t have millions to fathom that people who do have it don’t necessarily pet it and love it and watch over it like a child. Rex Shelby, who is as serious an engineer as one can possibly find, continued to live like a college student even when he could buy and sell you.

Jeff Skilling, as I’ve said many times, didn’t really care about money. He liked Arby’s, for goodness sake. He didn’t buy a giant house with a house manager and butler and other staff. He just bought a nice house and forgot about it.

The reason some people don’t quite believe one can be so casual about money is because they are thinking that if they had that money, they’d be buying Rolls Royces and velvety quarterhorses and big solid gold mansions. But that’s their own filter – their own bias and their own greed they’re seeing. It had nothing to do with what the people at Enron were actually like, what their values were, or how they lived their lives.

It always amuses me that Bethany McLean pulls these tattered arguments from the mothballs and continues to swan around in them like silken robes. They’re not true. They’re just class warfare. And coming from Bethany McLean, now married to Enron Task Force prosecutor Sean Berkowitz, one would think she might be a little more cognizant of the fact that she’s rich. How did you get your wealth, Mizz Berkowitz? Did you work for it?

We both know the answer to that. Bethany married a Vanderbilt, took all his money, then married Berkowitz who is now making bank in private practice.

So she’s oblivious to her own biases. She, after all, never had to invent the gas bank or the EIN. All she had to do was criticize it when the company collapsed. She writes her little books that are shallow as a teaspoon, then goes on MSNBC to levy her criticism.

She is a vulture, and she is still picking the sunbleached bones of Enron.