Word: enronizing
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...Enron employees who filed into a hotel meeting room on Oct. 23 were understandably nervous. Just days before, the energy-trading company had announced a $618 million loss for the third quarter, tied in part to the unraveling of one of its partnerships, and chief executive Ken Lay had called an all-hands meeting to reassure workers about the future. The affable Lay told everyone that if operating earnings were on target, as it appeared they would be, bonuses would be paid. The questions that followed veered toward the trivial--the Christmas party, parking privileges--until one persistent energy trader...
...trader, Jim Schwieger, challenged Lay. Why, he asked, was chief financial officer Andrew Fastow sharing the stage--and gainfully employed--considering that he had just blown half a billion dollars mismanaging several Enron partnerships and earned $30 million doing it? Lay put his arm around Fastow and proclaimed his "unequivocal trust" in the CFO. The partnership accounting was complex stuff, Lay explained, but Fastow was on top of it--or he'd be in big trouble. A day after that buddy-buddy display, Fastow was history...
When LJM began to fail and investors became worried about Fastow’s dealings with Enron and LJM, Enron was forced to cut ties with the company and take a loss of $1 billion, which contributed to the company’s Dec. 2 bankruptcy filing...
...board made a reasonable business judgment to permit Mr. Fastow to serve in these partnerships,” Winokur said yesterday. “We believed those transactions would be in the best interest of Enron and its shareholders... I must therefore respectfully disagree with some aspects of the report relating to the board’s performance and corporate governance principles...
Minutes from a 1999 Enron board meeting show that Winokur played a prominent role in approving the creation of LJM2, an off-shoot of LJM. The minutes show that Winokur was the one who proposed a motion to overrule a company policy that would have prohibited Fastow from forming LJM2...