Andrew S. Fastow, being escorted to the federal courthouse earlier this month in Houston, was indicted today on 78 federal charges relating to the collapse of Enron Corp. (AP photo / October 2, 2002) |
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HOUSTON -
A year after Enron Corp.'s facade as a thriving global energy behemoth began to crumble publicly, only remnants remain of the heady days in the 50-story headquarters where the rich and powerful once ruled.
No one uses former chairman Kenneth L. Lay's corner office, on the top floor with its view of the city skyline -- including the Houston Astros ballpark that has dumped the name of the disgraced energy company.
The 2,000 workers left in a building that once housed 7,500 are consolidated on half-empty floors. The Starbucks in the lobby is still kicking, but lines of java lovers are rare. Most of Enron's now-14,000 workers worldwide are at pipelines and power plants.
The cavernous board room for 15 directors is too spacious for the current slate of just four directors, none of whom were around for the financial sleight of hand led to Enron's demise.
Interim chief executive Stephen Cooper, a restructuring expert, uses former chief executive Jeffrey K. Skilling's office, which faces Enron's smaller twin building.
Intended to showcase its once-envied trading operation, the bankrupt company last week sold the tower for less than half its $240 million construction cost.
"It's not the same company," spokeswoman Karen Denne said.
But what was No. 7 on the Fortune 500 two years ago retains its image of corporate malfeasance since Oct. 16, 2001, when it revealed a $618 million loss and eliminated $1.2 billion in shareholder equity.
Those revelations opened the door to an elaborate knot of partnerships and off-the-balance-sheet debts that quickly fueled Enron's failure.
"It would have been unthinkable to imagine the events that were about to take place," said John Abraham, a former executive with the company's broadband unit.
Enron admitted that its financial statements had been wrong for years, in what turned out to be the first in a string of corporate and accounting scandals involving companies such as Adelphia Communications Corp., Global Crossing Ltd. and WorldCom Inc.
The company filed for bankruptcy in December, six weeks after the financial schemes were disclosed.
"Enron started to open the Pandora's box of all sorts of other evils, and Enron was certainly the mother of all other frauds," said Sanders Morris Harris Inc. analyst John Olson.
Olson's skepticism of Enron, rare among analysts before the October earnings release, drew the company's ire.
The collapse sparked investigations by at least 14 regulatory agencies and 11 congressional committees, and shareholder lawsuits.
At least three books on the collapse have been published and CBS will air a movie, "The Crooked E," based on former trader Brian Cruver's account of the implosion.
Criminal charges against some alleged participants have been filed since mid-June, after Enron's former auditor, Arthur Andersen LLP, was convicted of obstruction of justice for shredding and doctoring Enron-related documents.
The Chicago-based Andersen is to be sentenced Wednesday. David Duncan, Andersen's former top Enron auditor who pleaded guilty to obstruction, has an Oct. 25 sentencing date.
Former Enron chief financial officer Andrew S. Fastow, as well as three London bankers, are charged with creating or investing in partnerships to scam Enron shareholders while they pocketed millions.
Fastow, 41, who said he was following orders, is free on $5 million bond.
Former federal prosecutor Robert Mintz, now a partner at McCarter & English in Newark, N.J., said Enron watchers may be frustrated at the pace of the criminal probe, particularly in contrast to the speediness of criminal charges filed against former WorldCom and Adelphia executives.
"The reality is that the stakes here for the government are enormous," Mintz said. "Prosecutors have to be immune from the pressure that politicians and the public in general may bring on them.
"It's the federal prosecutors who are standing in court who have to prove those cases."
Meanwhile, Enron is seeking bids this month for its 12 most valuable assets, including the Portland General Electric Co. utility in Oregon and its stakes in three pipelines.
Last month, Enron held the first of several surplus property auctions.
Even Enron's Web site has slimmed down, but a message with a list of milestones since the company's 1985 inception recalls the pre-scandal days:
"Enron has accomplished more in its 15-year history than many of the world's best-known companies have in a century," the message says.
"Why? Because Enron employees have an insatiable drive for trying the unexpected, thinking the unthinkable and accomplishing the unattainable. We have set a new course for energy and communications in the new millennium ... Keep your hiking boots on. The journey has just begun."
No one uses former chairman Kenneth L. Lay's corner office, on the top floor with its view of the city skyline -- including the Houston Astros ballpark that has dumped the name of the disgraced energy company.
The 2,000 workers left in a building that once housed 7,500 are consolidated on half-empty floors. The Starbucks in the lobby is still kicking, but lines of java lovers are rare. Most of Enron's now-14,000 workers worldwide are at pipelines and power plants.
The cavernous board room for 15 directors is too spacious for the current slate of just four directors, none of whom were around for the financial sleight of hand led to Enron's demise.
Interim chief executive Stephen Cooper, a restructuring expert, uses former chief executive Jeffrey K. Skilling's office, which faces Enron's smaller twin building.
Intended to showcase its once-envied trading operation, the bankrupt company last week sold the tower for less than half its $240 million construction cost.
"It's not the same company," spokeswoman Karen Denne said.
But what was No. 7 on the Fortune 500 two years ago retains its image of corporate malfeasance since Oct. 16, 2001, when it revealed a $618 million loss and eliminated $1.2 billion in shareholder equity.
Those revelations opened the door to an elaborate knot of partnerships and off-the-balance-sheet debts that quickly fueled Enron's failure.
"It would have been unthinkable to imagine the events that were about to take place," said John Abraham, a former executive with the company's broadband unit.
Enron admitted that its financial statements had been wrong for years, in what turned out to be the first in a string of corporate and accounting scandals involving companies such as Adelphia Communications Corp., Global Crossing Ltd. and WorldCom Inc.
The company filed for bankruptcy in December, six weeks after the financial schemes were disclosed.
"Enron started to open the Pandora's box of all sorts of other evils, and Enron was certainly the mother of all other frauds," said Sanders Morris Harris Inc. analyst John Olson.
Olson's skepticism of Enron, rare among analysts before the October earnings release, drew the company's ire.
The collapse sparked investigations by at least 14 regulatory agencies and 11 congressional committees, and shareholder lawsuits.
At least three books on the collapse have been published and CBS will air a movie, "The Crooked E," based on former trader Brian Cruver's account of the implosion.
Criminal charges against some alleged participants have been filed since mid-June, after Enron's former auditor, Arthur Andersen LLP, was convicted of obstruction of justice for shredding and doctoring Enron-related documents.
The Chicago-based Andersen is to be sentenced Wednesday. David Duncan, Andersen's former top Enron auditor who pleaded guilty to obstruction, has an Oct. 25 sentencing date.
Former Enron chief financial officer Andrew S. Fastow, as well as three London bankers, are charged with creating or investing in partnerships to scam Enron shareholders while they pocketed millions.
Fastow, 41, who said he was following orders, is free on $5 million bond.
Former federal prosecutor Robert Mintz, now a partner at McCarter & English in Newark, N.J., said Enron watchers may be frustrated at the pace of the criminal probe, particularly in contrast to the speediness of criminal charges filed against former WorldCom and Adelphia executives.
"The reality is that the stakes here for the government are enormous," Mintz said. "Prosecutors have to be immune from the pressure that politicians and the public in general may bring on them.
"It's the federal prosecutors who are standing in court who have to prove those cases."
Meanwhile, Enron is seeking bids this month for its 12 most valuable assets, including the Portland General Electric Co. utility in Oregon and its stakes in three pipelines.
Last month, Enron held the first of several surplus property auctions.
Even Enron's Web site has slimmed down, but a message with a list of milestones since the company's 1985 inception recalls the pre-scandal days:
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