The Smartest Guys in the Room. The Amazing Rise and Scandalous Fall of Enron by Bethany McLean and Peter Elkind.
I wasn’t directly affected by the Enron scandal, and with so much going on, at the time of the great fall. To me it was just another news story, but I know that thousands of people lost everything. In the energy giant’s collapse.
Light reading this book is not, especially for someone so numbers illiterate as I. It is equal parts fascinating and disgusting. You look back at it and say “How could they (the banks, Arthur Anderson, the Enron Board of Directors, the analysts) have missed what was going on??????? Yeah, it was the roaring ‘90’s and many of us were living high, but these guys were in the stratosphere. It is clear people wondered, but no one spoke up.
Prior to reading this book, the piece of the story that caught my eye the most was Lea and Andy Fastow and the plea bargins they cut, especially Lea. I remember being furious that her deal fell apart because the government wasn’t willing to insure that she and her husband would not go to jail at the same time. The Fastow’s wanted one parent to be with their children at all times. I can understand that, but shouldn’t you have thought about how your actions could have negatively impacted your children earlier? Given the scale of Andy Fastow’s illegal actions. I don’t think they had a lot of bargaining power. Obviously the government disagreed because the Fastow’s did not serve concurrent jail terms and ultimately he was only sentenced to 6 years. From what I got out of the book, he was the mastermind behind so much of the fraud committed against investors, but Lay and Skilling lead the parade. It is the ultimate case of the emperor’s new clothes.
It is dense, but I do recommend it.
