Conspiracy of Fools Read Free Page A

you’re now CFO of this company.”
    What was that?
McMahon wasn’t sure he heard Whalley correctly. He was chief financial officer? Just like that?
    “Excuse me?” McMahon said. “I’m CFO?”
    “Yes, you’re CFO.”
    McMahon glanced across the table. Fastow was shaking his head, looking shocked. The moment was surreal.
    Are other companies like this? You get promoted and the guy you replace gets fired, all in front of everybody?
    “Wait a minute!” Fastow sputtered, anger in his voice. “That was not my understanding of the deal!”
    Whalley held up a hand. “Andy, I don’t have time for this. I don’t know your arrangement; I don’t know the legal stuff. You get with Ken and work it out. But you’re not CFO. That decision’s made.”
    That was it. Whalley turned away from Fastow.
    “Okay, Jeff, commercial paper. What should we do?”
    “Well,” McMahon said, “I need to assemble a team to figure out where we are. But I think there’s a good chance we’ll need to draw down the revolvers.”
    Bowen jumped in. “People, from my experience, if a company has a cash crisis, it either draws its revolvers immediately or gets ready for the banks to come in and find lots of reasons to delay sending the cash.”
    The group tossed around the idea. Fastow shook his head, leaning forward in his chair. “Wait a minute, Ray,” he said, looking at Bowen. “I really disagree with you. I think drawing down the revolvers will send a terrible message to the market.”
    Fastow pressed a forefinger against the table.
    “You do this,” he said forcefully, “and people are going to think there’s really something
wrong
at Enron.”
    Three hours later, Fastow sat in a rich leather chair at the credenza behind his desk, typing an e-mail to his wife, Lea. They had planned to have lunch together that day, but now that was impossible. Too much needed to be done; he had to get some things settled. He finished typing his apologies to Lea and hit the “send” button.
    Fastow pushed back from the credenza and stood. Ken Lay appeared in his office doorway, his face stern.
    “I need to talk to you, Andy,” Lay said.
    “Okay, Ken. Come on in.”
    Fastow touched the button on his remote, closing his office door, while Lay sat at the conference table. As Fastow joined him, Lay eyed the man he had trusted for so long. In the hours since their first meeting that day, he had learned new information, disturbing details that had made Lay question his steadfast confidence in Fastow. But no matter. The problem was out of Lay’s hands now.
    “Andy, I just left a meeting of the board. And based on the information you provided this morning, the board decided that we can’t continue with you as CFO. We’ve decided to put you on a leave of absence and make Jeff McMahon the new chief financial officer.”
    Fastow didn’t flinch. Lay was surprised; no one had bothered to tell him that Whalley had already delivered the news with far less formality. “I understand,” he said.
    Before Lay could speak again, Fastow plowed ahead.
    “We need to work out a severance agreement,” he said.
    Lay shook his head. “We’re not ready for that, Andy.”
    “It won’t take long. I won’t be unrealistic. I know I’m entitled to nine or ten million dollars. But I think for three or four million, we can all agree that I’m leaving and I’m not going to be a problem.”
    What?
Was this some kind of threat?
    “Andy, we’re not doing it that way,” Lay said. “First of all, there’s a lot I need to do other than negotiate your severance. But I also need the board involved.”
    Fastow leaned in, his voice above a whisper. “Well, let’s just have a handshake on something now, you and me, just so it’s done.” Lay almost recoiled in disgust.
    “No, Andy. We’ll talk about it in a few days, but right now we’re not going to do anything.”
    Lay didn’t wait for a response. He rose to let Fastow know that the meeting had ended.
    “Andy,