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Clips from Enron: The Smartest Guys in the Room (2005)

Alan, with our sincere thanks and admiration,

"Alan, with our sincere thanks and admiration,"

Enron: The Smartest Guys in the Room (2005)

we are pleased and indeed honored to award you

"we are pleased and indeed honored to award you"

Enron: The Smartest Guys in the Room (2005)

the Enron prize for distinguished public service.

"the Enron prize for distinguished public service."

Enron: The Smartest Guys in the Room (2005)

They continued to sell the company

"They continued to sell the company"

Enron: The Smartest Guys in the Room (2005)

as being a very stable place

"as being a very stable place"

Enron: The Smartest Guys in the Room (2005)

where it could predictably increase profits

"where it could predictably increase profits"

Enron: The Smartest Guys in the Room (2005)

10 to 15 percent a year.

"10 to 15 percent a year."

Enron: The Smartest Guys in the Room (2005)

In fact, to get to those numbers Enron was doing

"In fact, to get to those numbers Enron was doing"

Enron: The Smartest Guys in the Room (2005)

all sorts of questionable things;

"all sorts of questionable things;"

Enron: The Smartest Guys in the Room (2005)

taking enormous risks.

"taking enormous risks."

Enron: The Smartest Guys in the Room (2005)

We like risk.

"We like risk."

Enron: The Smartest Guys in the Room (2005)

Because you make money by taking risk.

"Because you make money by taking risk."

Enron: The Smartest Guys in the Room (2005)

By all accounts, Enron was soaring.

"By all accounts, Enron was soaring."

Enron: The Smartest Guys in the Room (2005)

But in reality, profits weren't going up;

"But in reality, profits weren't going up;"

Enron: The Smartest Guys in the Room (2005)

they were headed in the opposite direction.

"they were headed in the opposite direction."

Enron: The Smartest Guys in the Room (2005)

Enron had vast natural gas operations all over the world.

"Enron had vast natural gas operations all over the world."

Enron: The Smartest Guys in the Room (2005)

They had cost billions to build

"They had cost billions to build"

Enron: The Smartest Guys in the Room (2005)

and most were performing terribly.

"and most were performing terribly."

Enron: The Smartest Guys in the Room (2005)

But in other places in the world, in India,

"But in other places in the world, in India,"

Enron: The Smartest Guys in the Room (2005)

great quarter and a great year in India.

"great quarter and a great year in India."

Enron: The Smartest Guys in the Room (2005)

Phase one of Dabhol is in operation generating power.

"Phase one of Dabhol is in operation generating power."

Enron: The Smartest Guys in the Room (2005)

Phase two is financed and is under construction.

"Phase two is financed and is under construction."

Enron: The Smartest Guys in the Room (2005)

My experience indicated there were certain places that you

"My experience indicated there were certain places that you"

Enron: The Smartest Guys in the Room (2005)

assiduously stayed away from.

"assiduously stayed away from."

Enron: The Smartest Guys in the Room (2005)

And one of them, as an example, was India.

"And one of them, as an example, was India."

Enron: The Smartest Guys in the Room (2005)

They built this power plant in India.

"They built this power plant in India."

Enron: The Smartest Guys in the Room (2005)

Nobody else would do that at the time.

"Nobody else would do that at the time."

Enron: The Smartest Guys in the Room (2005)

They were terrified of investing in India.

"They were terrified of investing in India."

Enron: The Smartest Guys in the Room (2005)

Enron did it, and did it in a big way.

"Enron did it, and did it in a big way."

Enron: The Smartest Guys in the Room (2005)

But Enron had failed to see something basic.

"But Enron had failed to see something basic."

Enron: The Smartest Guys in the Room (2005)

India couldn't afford to pay for the power

"India couldn't afford to pay for the power"

Enron: The Smartest Guys in the Room (2005)

Enron's plant produced.

"Enron's plant produced."

Enron: The Smartest Guys in the Room (2005)

Now Dabhol is a ruin.

"Now Dabhol is a ruin."

Enron: The Smartest Guys in the Room (2005)

Though it lost a billion dollars on the project,

"Though it lost a billion dollars on the project,"

Enron: The Smartest Guys in the Room (2005)

Enron paid out multi-million dollar

"Enron paid out multi-million dollar"

Enron: The Smartest Guys in the Room (2005)

bonuses to executives based

"bonuses to executives based"

Enron: The Smartest Guys in the Room (2005)

on imaginary profits that never arrived.

"on imaginary profits that never arrived."

Enron: The Smartest Guys in the Room (2005)

Where was the real money going to come from?

"Where was the real money going to come from?"

Enron: The Smartest Guys in the Room (2005)

Of course the pressure was enormous.

"Of course the pressure was enormous."

Enron: The Smartest Guys in the Room (2005)

You had to come up with the next idea

"You had to come up with the next idea"

Enron: The Smartest Guys in the Room (2005)

that would break through.

"that would break through."

Enron: The Smartest Guys in the Room (2005)

Failure was not an option.

"Failure was not an option."

Enron: The Smartest Guys in the Room (2005)

A flurry of buy-outs in the corporate world...

"A flurry of buy-outs in the corporate world..."

Enron: The Smartest Guys in the Room (2005)

the biggest:

"the biggest:"

Enron: The Smartest Guys in the Room (2005)

Enron announcing a buy out of Portland General.

"Enron announcing a buy out of Portland General."

Enron: The Smartest Guys in the Room (2005)

The merger with PGE put Enron in the electricity business.

"The merger with PGE put Enron in the electricity business."

Enron: The Smartest Guys in the Room (2005)

And Portland General's position on the west coast

"And Portland General's position on the west coast"

Enron: The Smartest Guys in the Room (2005)

gave Enron access to the newly deregulated market of California.

"gave Enron access to the newly deregulated market of California."

Enron: The Smartest Guys in the Room (2005)

The merger, we think...

"The merger, we think..."

Enron: The Smartest Guys in the Room (2005)

it uniquely positions us to ultimately

"it uniquely positions us to ultimately"

Enron: The Smartest Guys in the Room (2005)

become the largest marketer of electricity and natural gas

"become the largest marketer of electricity and natural gas"

Enron: The Smartest Guys in the Room (2005)

at both the wholesale and retail level nationwide."

"at both the wholesale and retail level nationwide.""

Enron: The Smartest Guys in the Room (2005)

What brought all this on was the deregulation

"What brought all this on was the deregulation"

Enron: The Smartest Guys in the Room (2005)

they said that we would not survive,

"they said that we would not survive,"

Enron: The Smartest Guys in the Room (2005)

unless we joined forces.

"unless we joined forces."

Enron: The Smartest Guys in the Room (2005)

Enron, I'd never heard of 'em until they were gonna buy us.

"Enron, I'd never heard of 'em until they were gonna buy us."

Enron: The Smartest Guys in the Room (2005)

They slid in here, and when they purchased PGE,

"They slid in here, and when they purchased PGE,"

Enron: The Smartest Guys in the Room (2005)

all the PGE stock became Enron.

"all the PGE stock became Enron."

Enron: The Smartest Guys in the Room (2005)

Just went through, stamped every one of 'em.

"Just went through, stamped every one of 'em."

Enron: The Smartest Guys in the Room (2005)

I looked around me,

"I looked around me,"

Enron: The Smartest Guys in the Room (2005)

and all the guys that were buyin' all this Enron,

"and all the guys that were buyin' all this Enron,"

Enron: The Smartest Guys in the Room (2005)

they were doublin' their money.

"they were doublin' their money."

Enron: The Smartest Guys in the Room (2005)

And that whole time since then, I put the maximum

"And that whole time since then, I put the maximum"

Enron: The Smartest Guys in the Room (2005)

I could into my 401 and savings.

"I could into my 401 and savings."

Enron: The Smartest Guys in the Room (2005)

Portland General, again, good earnings and cash flow.

"Portland General, again, good earnings and cash flow."

Enron: The Smartest Guys in the Room (2005)

It's what's they call on Wall Street a "trust me" story.

"It's what's they call on Wall Street a "trust me" story."

Enron: The Smartest Guys in the Room (2005)

People that had been gas pipeline workers who

"People that had been gas pipeline workers who"

Enron: The Smartest Guys in the Room (2005)

for decades kept all their money in the company

"for decades kept all their money in the company"

Enron: The Smartest Guys in the Room (2005)

because they thought it was this traditional and,

"because they thought it was this traditional and,"

Enron: The Smartest Guys in the Room (2005)

you know, safe investment as it... as it had always been.

"you know, safe investment as it... as it had always been."

Enron: The Smartest Guys in the Room (2005)

And it was... it wasn't anything close to that.

"And it was... it wasn't anything close to that."

Enron: The Smartest Guys in the Room (2005)

Should we invest all of our 401k in Enron stock?

"Should we invest all of our 401k in Enron stock?"

Enron: The Smartest Guys in the Room (2005)

Absolutely. Don't you guys agree?

"Absolutely. Don't you guys agree?"

Enron: The Smartest Guys in the Room (2005)

Enron is a big winner today

"Enron is a big winner today"

Enron: The Smartest Guys in the Room (2005)

One of the things that fascinated me was that

"One of the things that fascinated me was that"

Enron: The Smartest Guys in the Room (2005)

almost all of the Wall Street analysts

"almost all of the Wall Street analysts"

Enron: The Smartest Guys in the Room (2005)

who covered Enron had buy ratings

"who covered Enron had buy ratings"

Enron: The Smartest Guys in the Room (2005)

or strong buy ratings on the company's stock.

"or strong buy ratings on the company's stock."

Enron: The Smartest Guys in the Room (2005)

Why were the analysts blinded to the company's deceit?

"Why were the analysts blinded to the company's deceit?"

Enron: The Smartest Guys in the Room (2005)

We relied on the information that was available at the time.

"We relied on the information that was available at the time."

Enron: The Smartest Guys in the Room (2005)

I trusted the integrity of the company's certified

"I trusted the integrity of the company's certified"

Enron: The Smartest Guys in the Room (2005)

financial statements,

"financial statements,"

Enron: The Smartest Guys in the Room (2005)

and the representations of the company's management.

"and the representations of the company's management."

Enron: The Smartest Guys in the Room (2005)

And we've been absolutely upfront with the analysts.

"And we've been absolutely upfront with the analysts."

Enron: The Smartest Guys in the Room (2005)

Jeff Skilling was the critical component

"Jeff Skilling was the critical component"

Enron: The Smartest Guys in the Room (2005)

in creating the Enron illusion.

"in creating the Enron illusion."

Enron: The Smartest Guys in the Room (2005)

Time and time again when we had a question

"Time and time again when we had a question"

Enron: The Smartest Guys in the Room (2005)

to the sell-side analysts that they couldn't answer,

"to the sell-side analysts that they couldn't answer,"

Enron: The Smartest Guys in the Room (2005)

the response was, 'I'll give Jeff a call;

"the response was, 'I'll give Jeff a call;"

Enron: The Smartest Guys in the Room (2005)

I'll run this by Jeff.'

"I'll run this by Jeff.'"

Enron: The Smartest Guys in the Room (2005)

By giving Jeff a call,

"By giving Jeff a call,"

Enron: The Smartest Guys in the Room (2005)

the analysts weren't 'analyzing' at all.

"the analysts weren't 'analyzing' at all."

Enron: The Smartest Guys in the Room (2005)

They were willing to believe virtually

"They were willing to believe virtually"

Enron: The Smartest Guys in the Room (2005)

anything Enron told them.

"anything Enron told them."

Enron: The Smartest Guys in the Room (2005)

Most of the analysts right now have a target price on us

"Most of the analysts right now have a target price on us"

Enron: The Smartest Guys in the Room (2005)

from a hundred to a hundred and fifteen dollars a share.

"from a hundred to a hundred and fifteen dollars a share."

Enron: The Smartest Guys in the Room (2005)

Any analyst who didn't buy the company line

"Any analyst who didn't buy the company line"

Enron: The Smartest Guys in the Room (2005)

became an enemy of Enron.

"became an enemy of Enron."

Enron: The Smartest Guys in the Room (2005)

Enron's CFO, Andy Fastow,

"Enron's CFO, Andy Fastow,"

Enron: The Smartest Guys in the Room (2005)

had his eye on John Olson

"had his eye on John Olson"

Enron: The Smartest Guys in the Room (2005)

one of the only analysts skeptical of the Enron story.

"one of the only analysts skeptical of the Enron story."

Enron: The Smartest Guys in the Room (2005)

Enron loved analysts' strong buy recommendations.

"Enron loved analysts' strong buy recommendations."

Enron: The Smartest Guys in the Room (2005)

Merrill was informed by Fastow,

"Merrill was informed by Fastow,"

Enron: The Smartest Guys in the Room (2005)

either you get somebody who is on board with us as a strong

"either you get somebody who is on board with us as a strong"

Enron: The Smartest Guys in the Room (2005)

buy recommendation and loves us at the same time

"buy recommendation and loves us at the same time"

Enron: The Smartest Guys in the Room (2005)

or we don't do any business with you.

"or we don't do any business with you."

Enron: The Smartest Guys in the Room (2005)

I knew that my days were numbered.

"I knew that my days were numbered."

Enron: The Smartest Guys in the Room (2005)

This is an abuse.

"This is an abuse."

Enron: The Smartest Guys in the Room (2005)

Merrill Lynch fired John Olson.

"Merrill Lynch fired John Olson."

Enron: The Smartest Guys in the Room (2005)

Soon after Fastow rewarded the bank

"Soon after Fastow rewarded the bank"

Enron: The Smartest Guys in the Room (2005)

with two investment banking jobs

"with two investment banking jobs"

Enron: The Smartest Guys in the Room (2005)

worth 50 million dollars.

"worth 50 million dollars."

Enron: The Smartest Guys in the Room (2005)

Analysts were routinely getting large bonuses

"Analysts were routinely getting large bonuses"

Enron: The Smartest Guys in the Room (2005)

from the investment banking departments to bring

"from the investment banking departments to bring"

Enron: The Smartest Guys in the Room (2005)

in investment banking deals. Ah... once that happens,

"in investment banking deals. Ah... once that happens,"

Enron: The Smartest Guys in the Room (2005)

you know, never was heard a discouraging word.

"you know, never was heard a discouraging word."

Enron: The Smartest Guys in the Room (2005)

While Enron's stock kept rising,

"While Enron's stock kept rising,"

Enron: The Smartest Guys in the Room (2005)

its businesses kept losing money.

"its businesses kept losing money."

Enron: The Smartest Guys in the Room (2005)

Looking at the soaring stocks of the dot-coms,

"Looking at the soaring stocks of the dot-coms,"

Enron: The Smartest Guys in the Room (2005)

Skilling decided to take Enron into cyberspace.

"Skilling decided to take Enron into cyberspace."

Enron: The Smartest Guys in the Room (2005)

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