Conspiracy of Fools Read Free

save the career of this talented young executive. Fastow would be a victim. It just wasn’t right.
    Lay had no idea that Fastow had failed to tell him the most devastating news of all—news he wouldn’t learn for years to come.
    At almost that very moment across town, Ray Bowen was standing naked in his upstairs bathroom, checking the shower temperature with his hand. As he lifted his foot to step inside, the telephone rang. In the bedroom, his wife answered the line and put the call on hold. “Hey, Ray!” she called. “It’s Jeff!”
    This couldn’t be good, not at this hour. His boss, Jeff McMahon, head of Enron’s paper-market business, would only call this early with a problem. And Bowen knew Enron’s recent chaos had created plenty of those. Wrapping a towel around his waist, he stepped into a toilet room where he had installed a Panasonic phone system.
    “Hey, Jeff. What’s up?”
    “It’s bad, man,” McMahon said. “The shit really hit the fan last night.”
    Bowen listened in disbelief as McMahon told the ugly story. Enron had reached the precipice of collapse. The markets for the billions of dollars in day-to-day credit that large companies need—to pay salaries, to meet obligations to vendors, to keep
the lights
on—had shut out Enron. The institutions that ponied up the cash in short-term loans known as commercial paper no longer believed the company was worth the risk. The marketplace—that living, breathing entity whose judgment its executives hailed as infallible—was passing its harsh, unemotional verdict: Enron could not be trusted to survive the week.
    “How … how can that be?” Bowen stuttered.
    “Don’t know, but that’s what I’m hearing.”
    McMahon paused. “I think that’s it,” he said. “I think they’re going to fire Andy today.”
    No kidding
. Fastow had so mismanaged the books that nobody trusted Enron with an overnight loan? Of course he was gone. And if Lay let sentimentality get in the way of that obvious decision, then Whalley would pull the trigger.
    “So what’s the plan?” Bowen asked.
    “I need your help. Whalley wants you and me to come in and help him figure it out. Can you be there by eight?”
    Fifty-five minutes later, McMahon was in the offices of his division on thefourth floor of Enron’s new building when he saw Bowen hurrying toward him.
    “What do you think?” McMahon called out.
    “We’ve gotta draw down the revolvers right away,” Bowen replied brusquely.
    The revolvers
. The billions of dollars in standing lines of credit that Enron had available from its major banks. That was disaster money, the financial equivalent of a nuclear fallout shelter. And Enron needed it now.
    The two men hustled to the fiftieth floor of the main Enron building. They headed to Skilling’s old office, where Whalley had recently set up shop. A few others were already gathered there. Whalley’s door was closed, and his secretary told the men they needed to wait.
    “Greg’s meeting with Andy Fastow,” she said.
    Minutes passed. Finally the doorknob clicked and Fastow emerged, flashing a nervous smile. Whalley pushed past and took command.
    “Okay,” he said. “We’re meeting upstairs. Go on up, and I’ll be there in a few minutes.”
    The men rode a small internal elevator to the mezzanine level and made their way to a tiny conference room, crowding around an oblong table. Fastow and McMahon—who had long treated each other with an antipathy bordering on contempt—drifted to the seats farthest away from each other. Fifteen minutes later, Whalley blew into the room.
    “Okay, let’s get going,” he said as he took his seat. “Let’s start with the organization first.”
    Whalley shot a look at Fastow, pointing at him.
    “Andy,” he said rapidly, “as we discussed, you’re no longer CFO, effective right now.”
    Fastow’s face fell. “Wait …”
    Ignoring Fastow, Whalley swept his arm across the table, pointing at McMahon.
    “Jeff,