Customer Reviews
2 of 3 people found the following review helpful:
 A SHOCKER, even if you think you know this story, Apr 27, 2023
I read the author's other fine book, The Informant, and was eagerly awaiting his take on the Enron tale. Eichenwald does not disappoint.
The magnitude of the criminal activity at Enron -- and at other greedy corporations and outside executives -- was shocking. These are people who just laughed at the world while they lined their pockets. Just halfway through the book, your blood will boil and you will be telling others to read it. It's been a very long time that I couldn't put a book away, but this is the book.
The one thing about the book I truly enjoyed is that, despite its mouth-dropping tale, it rings true. Everyone comes off as human, driven by different mixes of greed, criminality hubris and incompetance. (Even Andy Fastow, the clear criminal of the tale, is seen down on the floor, goofing around with other people's children.) Some on here seem bothered by that, as if only a story where Lay, Skilling and company are seen drinking the blood of babies would be satisfactory.
In a way, I think that is part of Eichenwald's point -- one that he never makes out loud. (If I have any criticism it is that. I wish Eichenwald would spend more time telling us what HE thinks, so I wouldn't have to be guessing here.) Time and again, he shows journalists, analysts and politicians fawning over Skilling, Lay, et. al., with them being constantly portrayed (during the 1990's) as superhuman, infallible geniuses. All of the character traits that emerge in this book were already there, but no one mentioned them. They didn't fit the storyline.
Now, the storyline has changed: they are evil incarnate, so, some insist, everything about them must be evil. Eichenwald shows a constitency: we understand how they were portrayed as superhuman when they were not, and we understand why they are portrayed as evil. But, they are human. Failed, greedy, imcompetant executives who deserve to go to jail for their crimes. But human nonetheless. For those who demand baby-blood fairy tales, this will not be satisfying. But it is the only thing that explains how this crew could go from being seen as infallible in the 1990's to evil demons in this decade -- oftentimes based on the same information.
But, all that aside, this is a great read. You will love it.
2 of 3 people found the following review helpful:
 Not exactly a whitewash, but still too exculpatory, Apr 27, 2023
Eichenwald is a fine writer, and this book makes for a good summer read if nothing else. But, as befits an NY Times financial reporter who was apparently always a step behind on this story as it broke (reporters from Fortune and the Wall Street Journal, who he credits, did the groundbreaking work), Eichenwald seems implicitly desperate to get his book out there with a different spin than the others -- and yes, that spin is clearly to make Ken Lay a PR-obsessed patsy, Skilling a sort of idiot savant, and Fastow the near-psychopathic villain of the tale. That spin is obvious from the preface and continues throughout the book, and those who have written on here that they don't see it must be willfully blind. Yet, even if there's some truth to those characterizations, corporate responsibility does not work that way, not under the law, not under the simple rules of business common sense -- all of which Enron defied in the very way it set about doing business in the early 90s. To make this a Fastow-centered tale, then, Eichenwald downplays both the fact of Lay, Skilling, and the board's criminal neglect (at a very minimum), as well as the systemic failures built into the mania for deregulation and so-called free markets in the late 80s and 90s. This is most visible perhaps in the relatively short shrift that Eichenwald gives to the California energy crisis for which Enron and their ilk were almost entirely responsible, and on which other reporters have been far more detailed and less forgiving. Eichenwald almost grants Enron a pass on the trade practices in which they engaged in California, apparently because they were a) mostly "legal," and b) market-sanctioned. Eichenwald's establishment bias seems clearest in these sections (and here he also neglects the political context of who stood to win as California suffered; i.e., the Bush Administration).
I should mention one other odd feature of this book. For a major release from a major publisher, it was very surprising that no photographs were included, not even on the book's website. Despite the lengthy textual listing of the cast of characters as a frontispiece, it would have helped a lot to be able to attach faces to these names, esp. the more obscure ones (for ex., I still haven't found a photo of Kopper anywhere, nor does he appear in the documentary just released).
In sum, if you're going to read only one book on Enron, I don't think this should be the one.
2 of 3 people found the following review helpful:
This is real Water Cooler book!, Apr 27, 2023
The title also reads, "Behind thick corporate walls, in the shadows of Wall Street, along the corridors of political power, a scandal is brewing...." This is a real water cooler book. Anyone who works for a large corporation has to recognize this cast of characters; the over paid CEO (in this case Ken Lay) who does not sweat the details and is more of a press the flesh relationship builder; the COO (in this case Jeff Skilling) who is over his head and can't ask the right questions; the under qualified CFO (in this case Andrew Fastow) who is both a crook and incompetent; and the real villain of the piece the Board of Directors who voted to let Fastow get away with breaking corporate conflict of interest rules. This cast is joined by literally dozens of other players, all highly compentent and sure as rain that something is not right at the top. A most compelling example is Jim Bouillion who bought Enron's insurance, did his job well and protected the company only to lose everything and learn his management thought a monkey could do his job. Everything is here in a richly layer narrative that reads like a classic American Business novel. What's wrong with evaluating employees on a curve, it's here. What's wrong about a company culture that only rewards results and not the truth, it's here. What happens to those who can't say yes to the boss, it's here. Riveting stuff and a smashing good read. You will learn all you need to know about Enron, government oversight, politics, and the rib off of share holders by everyone including a monumentally incompetent Board of Directors (these folks make the Board at Disney, "Disney War" look like positive roll models. Don't be put off by the book's length, I assure you that if your interested at all in the subject, at all in business, at all in how you can game the system and only get 10 years in prison, this is your book to enjoy.
6 of 9 people found the following review helpful:
 this is worse than I would EVER have imagined, Apr 21, 2023
The problems of Enron can be viewed as either extremely simple or overwhelmingly complex. What happened is an intersection of arrogance, greed, and stupidity that is unprecedented in my research and reading experience on business. That is easy to get. What is hard to comprehend is how it went on for so long - with so many willing accomplices in outside firms, from Andersen to Merrill Lynch - and the precise financial and accounting techniques that were employed. As such, I think this story is an indictment of the entire establishment of people who think and write about business, myself included. Let's admit that we didn't see this one coming and didn't ask the right questions!
As a first-rate reporter, Eichenwald takes us through the entire story, offering up personal details that allow the reader to imagine that they enter the heads of the people involved. It is a tour de force, with ample documentation to back up every reconstructed conversation, and beautifully written.
The story that emerges is that once Ken Lay left the confines of a stodgy business - natural gas pipelines - he got way way out of his depth. His company evolved into a trading conglomerate, and not even its competitors clearly understood how it was making money. At first, it did well, growing to become one of Wall Street's darlings and even a major political player.
But underneath, lots of things were going wrong. FOr starters, much of its profits came from an accounting redefinition (mark-to-market), in which the company was allowed to book profits for deals immediately - based on the company's own estimates (!) - and regardless of cash flow in subsequent years. That made dealmaking the road to profitability, creating what can only be described as an elaborate ponzi scheme: to show a profit, the company had to strike more and more deals, even as its cash position was precarious.
Then things got worse. Many of the deals that Enron made were simply bad and not checked out in any serious way (with proper "due diligence"). In other words, decisions involving hundreds of millions and then billions were made off the cuff in areas that the executives were almost entirely ingorant, like electricity plants in India, water futures, and of course, the broadband internet. This resulted in a huge array on non-performing assets. In spite of this, the way to advance in the company remained to make deals regardless of their quality.
SOmewhere along the line - possibly when Rich Kinder, one of the original top execs, left - management lost control of the situation. This is where Andy Fastow - the great villain of the book who was also catastrophically stupid, to put it mildly - was appointed CFO, turning an oversight office into a profit center! No one thought to question him as he created accounting schemes that allowed the company to report huge profits by shunting non-performing assets into secretive "partnerships", all while enriching himself and several conspirators.
To keep banks and accountants on board, Fastow played hardball, threatening to cut them out of hugely profitable deals if they refused to play along, and most of them did play along while complaining that it was sleazy and then doing nothing to stop him. (FOr this complicity, many of them paid later in prison sentences as well as the demise of Arthur Andersen.) Fastow also got dissenting analysts and even Andersen acountants off the Enron account if they dared question the company's postion, ruining their careers. It is only the beginning of the human suffering that resulted from the company's eventual collapse.
Skilling and Lay, according to Eichenwald, kept themselves blissfully unaware of this situation as they went about their roles as corporate celebrities at the highest level. This is a failing so blatant that it is beyond catastrophe. They are the fools of the title, if you can believe that they weren't in on the whole thing. Indeed, the company had no business strategy or business model! In retrospect, there appear, according to the author, to have been many in the organization who worried about its practices, but their advice was eith systematically ignored or dismissed by those who were compromised. But in my view, even the most self-serving fool should have recognized the blatant conflicts of interest - Fastow was CFO as well as the manager of off-account funds, which meant that Enron often did business with itself, as customer and purchaser, with all transactions booked as profits for hefty fees for Fastow and his helpers!
As told, the story is truly rivetting and a fascinating look into the roaring 1990s. However, Eichenwald refrains from both adding analytical context and offering his opinions on the protagonists. That means that this book strives for pure reporting rather than the eloquent moral commentaries of a David Halberstam. I think that that lessens the import of the book significantly, though others may prefer it that way. Moreover, occasional value judgments did slip in, in such comments as Eichenald's assertions that "even a baboon could have made money on the deal." After all the work he did, he cannot but have reached his own conclusions, which by force influenced his writing - so why not be open about them?
In spite of these criticisms, this is wonderful reporting and lively writing. Warmly recommended.
2 of 4 people found the following review helpful:
Greed Is Good? Eichenwald Is Better, Apr 21, 2023
There are few American adults who haven't heard of Enron, but there are probably even fewer who can explain what happened to bring about the precipitous fall of one of Texas's and Wall Street's darlings of the roaring 1990's. In CONSPIRACY OF FOOLS, Kurt Eichenwald has accomplished the notable dual feat of making the Enron debacle both entertaining and understandable. Over the course of 675 pages, Eichenwald manages to introduce a huge cast of players, explain Enron's operations, outline its convoluted accounting and misbegotten reward systems, and turn an incident whose outcome we already know into a suspenseful story. This was a book and a topic I wasn't sure would sustain my interest, but the more I read, the less I wanted to put this book down.
Eichenwald paints his own portraits of the key players. We see Ken Lay as a glad-handing social striver, a CEO living in a cloud, never questioning where the amazing earnings were coming from as long as they kept showing up. Jeff Skilling appears self-centered and unstable, possibly the dumbest smart guy on the planet, while Andy Fastow comes across as little more than a smart petty thief and pathetic society wannabe. CONSPIRACY OF FOOLS has no shortage of villains, but there are heroes and tainted heroes in this book as well. The more you read, the more you root for them to win out - Jeff McMahon, Ray Bowen, Jordan Mintz, Bill Brown, Sherron Watkins, and Kevin Kindall at Enron, and Carl Bass at Arthur Andersen.
The Enron collapse was extraordinarily complex, and we may never know the full truth of what happened. Other books may assign blame differently or may emphasize or downplay one person's or group's role relative to others, but from my perspective, it hardly matters. CONSPIRACY OF FOOLS makes it clear that there was more than enough blame to go around, that Enron was a total, systemic collapse of unimaginable proportions. Nobody of significance emerges from Eichenwald's story unscathed: Enron's senior management and borderline incompetent Board of Directors, its outside lawyers and accountants (the late Arthur Andersen), its investment banks and lenders, the SEC, and Wall Street's shilling analysts. Even worse and more shameful were the various business journals and publications who lionized Ken Lay, Jeff Skilling, and even Andrew Fastow as business geniuses, paragons of MBA-instilled deftness and revolutionary thinking. Almost nobody did their job, and the few who tried were summarily ignored, transferred, or fired from positions too low to be noticed. Nearly everyone ignored one of the most basic common sense rules of business: when something seems too good to be true, it probably isn't true.
As Kurt Eichenwald makes abundantly clear, Enron is a morality tale, a case study if there ever was one in today's bonus-driven business environment. At every turn, CONSPIRACY OF FOOLS reveals a culture of greed and self-aggrandizement at the expense of truth, ethics, and the real interests of shareholders. The Board of Directors were too happy with the company's amazing results to question how such things might be possible, senior management was busy collecting its bonus checks (when it wasn't stealing outright from the company), the Andersen partner-in-charge repeatedly appeased his client to protect their $30+ million in consulting fees and his own bonus, and the investment bankers caved on every marginally legal deal rather than lose their gravy trains. Virtually no one involved acted according to their consciences or sense of ethical behavior, and few acted in the best interests of their companies. Eichenwald could easily have subtitled his book, "Show Me the Money!"
While the book tells a tale of one company's failure, it really offers an implicit indictment of an era characterized by Worldcom, Global Crossing, Adelphia, HealthSouth, Tyco, and too many others. Eichenwald never steps outside his story line to address the larger, systemic issues, but his story alone is enough to raise serious concerns. In a sense, the Harvards and Whartons and Kelloggs have created this environment; perhaps it's time for them to make books like CONSPIRACY OF FOOLS part of their required reading. If there is a lesson to be learned here, it's that greed is decidely not good.
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