The decline and fall of the Enron empire

The company's e-mail archive captures everything: Ken Lay's livin'-large heyday, the political schemes of his minions, and hate mail that employees sent their CEO when the company collapsed.

Oct 14, 2003 | When the Wall Street Journal reported last week that nearly 1.5 million Enron e-mail messages were posted on the Web, waiting for the world to read, the newspaper pointed out that many of the e-mails contained the private ramblings of Enron employees who didn't deserve to have their dirty laundry put on public display.

Fair enough. While the Federal Energy Regulatory Commission says the public has a right to know the facts upon which the Enron investigation was based, it's hard to see the public value of releasing messages in which Enron employees chat about their lunch plans, complain about the weather, and joke about visiting strip clubs and their own right hands when their girlfriends and wives are away.

But what the Journal didn't mention is that the Enron e-mail library posted on FERC's Web site also contains a remarkable glimpse into the culture of Enron -- how the family of Ken Lay lived large in the glory days, how Tom DeLay and other members of Congress used the company as a veritable ATM for campaign contributions, how Enron plotted to place employees in the Bush-Cheney administration, how company executives almost obsessively followed the investigation into price gouging during California's energy crisis, and ultimately how Enron employees suffered when the company collapsed.

Amid a sea of dick jokes, spam and Internet porn, the e-mails offer a window into the soul, such as it was, of Enron: from the high-flying days when the company decorated its top executive office suites in holiday themes -- according to a 2000 e-mail, Ken Lay's office was done up in honor of St. Lucia, Jeff Skilling's had Kwanzaa, and Andrew Fastow's was lit up for Hanukkah -- to the end, when things had gone so far south that members of the Lay family began to fear they'd be kidnapped.

The e-mail messages also touch on -- albeit briefly -- the supposedly secret meeting that California Governor-elect Arnold Schwarzenegger and other business leaders had with Ken Lay in May 2001. After word of the meeting appeared in the San Francisco Chronicle, one internal e-mail suggests that Enron executives tried to figure out who leaked the story. In another e-mail, a friend who had worked with Skilling at McKinsey & Co. warned him that the meeting had been a mistake -- "posh location, closed format, odd group, seemingly self-serving agenda" -- and that the company should be more careful about public appearances in order to avoid a "coast-to-coast firestorm" that could harm Enron's "reputation, leadership and shareholder value."

If he only knew. Enron declared bankruptcy in December 2001. Andrew Fastow and his wife, Lea, are awaiting trial on criminal charges. And while neither Ken Lay nor Jeff Skilling has been charged with any crime yet, they are the subject of any number of civil suits and have become poster boys for everything wrong in corporate America.

The Enron e-mails are available for searching and browsing at FERC's Web site. For those with better things to do, here are some of the highlights.

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If the Enron e-mail library is any indication, one of Ken Lay's most frequent correspondents was his daughter, Elizabeth. She wrote to him about friends who wanted jobs at Enron, about her plans for a lavish wedding to attorney Jose Luis Vittor, about her hopes for the Bush-Cheney campaign and, ultimately, about the stress Lay was facing as Enron collapsed. It appears that Lay himself seldom responded to these e-mails; in many instances, his secretary, Rosalee Fleming, did.

To: Ken Lay and Mark Lay
From: Elizabeth Lay
Date: Sept. 26, 2000
Subject: ADay

Dear Dad and Mark,

I am attaching the resume of the lovely and talented Ms. Amanda Day who, like all wise soon to be graduates of business school, is very interested in a position at Enron. Of course she would be an incredibly valuable addition to the Enron team and to Houston. If you have any questions about her character, achievements, or goals, please feel free to contact me.

All my love,

Elizabeth

To: Ken and Linda Lay
From: Elizabeth Lay
Date: Sept. 9, 1999
Subject: Band

Dad & Linda --

...I sent an email to the wedding coordinator ... [S]he recommended a photographer out of Atlanta, I love his work, he does candid more so than the traditional portraits. He also did a number of the Kennedys' weddings, etc. I'll try and get a price quote, but I might need your help in negotiations.

Also, she sent some information on a decorator/florist who seems phenomenal, I don't know if Linda might be willing to help me out with that as she knows a lot more about both flowers and decoration than I do. The Ballroom at the Ritz is pretty basic and he can turn it into anything but basic. Also, that we if we find a church that is not so amazing, he can decorate that as well...

I love you!

Liz & Jose Luis

To: Elizabeth Lay
From: Rosalee Fleming
Date: Jan. 27, 2000
Subject: Hotel Reservations

Hi Liz --

The reason Ken and Linda were trying to reach you from the plane was that they had some suggestions for the hotel rooms and wanted you to know their preference. They would like to give the Jasmine Suite that they are currently in to the Vittors with a connecting bedroom, to take care of their family.

They would like Mark and Natalie to have the end or corner suite that the Vittors have.

Ken and Linda said that they would prefer two connecting rooms, hopefully on the 3rd or 4th floor. They would like for the rooms to have the ocean view on the North side. If that isn't possible, it would be o.k. to overlook the pool, but they would not really like the south side as it wouldn't be as quiet. The two rooms would give them everything they need, with 2 baths.

They said they can be reached in Switzerland tomorrow... They should arrive in Davos about 9:00 a.m.

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During the company's glory days, Enron was a generous donor to political campaigns -- largely, Republican ones. Numerous e-mail messages in the Enron library concern the coordination of campaign contributions -- and the elaborate bookkeeping required to ensure at least technical compliance with campaign-finance laws.

To: Rosalee Fleming, Jeff Skilling
From: Steve Kean [Enron executive vice president and chief of staff]
Date: July 24, 2000
Subject: Jeff Skilling's letter from Tom DeLay re: RNSEC

Jeff and Ken both received notes from Tom DeLay about designating portions of their contributions for use in Texas. Mr. DeLay would like them to make that designation using the letter below (note that it will need to be modified to be from each individually rather than a joint letter). It is, of course, up to Ken and Jeff whether to make the designation.

To: Steven Kean [Enron executive vice president and chief of staff]
From: Cynthia Sandherr [Enron vice president]
Date: July 24, 2000
Subject: Jeff Skilling's letter from Tom DeLay re: RNSEC

Per your voicemail, attached is the written response suggested by Congressman DeLay's fundraiser. We cannot, per his suggested text, write one letter on behalf of both Ken Lay and Jeff Skilling (due to bundling rules we should write two separate letters) and we should put it on personal stationery and not corporate letterhead. Please let Carolyn or I know if you need anything further on this. Thanks, Cynthia.

From: Warren Robold [fundraising consultant for Tom DeLay]
To: Carolyn Cooney [Enron lobbyist]
Date: June 24, 2000

You should write this letter on your letterhead and direct it to Joe Jaso and copy Tom DeLay, Jim Ellis and myself. All funds where money could be left in the State of Texas from corporate and personal should be included.

Dear Joe:

Enron, Mr. Ken Lay and Mr. Skilling are requesting that their contribution be matched per our understanding from the fax and verbal communications from Warren Robold. This totals $100,000 between both individuals and the Corporation for the RNSEC matching funds program. We want these funds matched in time for the Texas State deadlines. It was our intention from the onset of this program to have our funds go to this account. The various points of contact from the RNC caused some minor confusion so checks went to Texas instead of DC. This is very important to Mr. Lay and Mr. Shilling. Let us know if we need to request these funds returned and new checks written and mailed to you at your DC address. You may call me if you have any questions.

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