Ken Lay really wasn't the worst of them. He was oblivious to most of the dealmaking, although he gave his blessing to many questionable practices without seeing the evidence that they were legal or appropriate. And he loved dealmakers. Unfortunately, to the exclusion of the penny-watchers or the risk managers. The company floated along on a cloud of arrogance and "creativity". I know about creativity in work; I am highly creative at times, finding ways to do things that others might not. But never unethical, never illegal. This bunch gave creativity a really bad name.
Some of the things they did rang a bell with me. I remembered Confessions of an Economic Hit Man, the story of how we do business internationally. How the hit man goes to the developing country, asssesses its needs for power and other infrastructure, makes the case for a loan to the country (from the World Bank), with the stipulation that the loan be used to create the overblown infrastructure, built by American contractors. Then, down the line, the infrastructure costs too much, the returns are not there, not as projected (deliberately inflated at the beginning) and the country defaults. From there it is but a step to American control of that country.
The way Enron practiced it was similar, at least the major steps. Enron wasn't looking to take over the country (I don't think) but was happy to supply contractors to build huge power plants that produced too much power and too little cash return. This, of course, was just one small part of Enron. We all know about the clever manipulating of California's electricity, which cost the state huge bundles (which wasn't helped by Gray Davis, I admit). And we all know about the manipulation of bookkeeping to show profits that were expected to be received many years in the future, and then probably not as high. And the incredible hedging schemes.
The fact that I can understand so much of what went on is a huge tribute to the author, Kurt Eichenwald. This book was a best seller, in spite of its huge size.
Oh yeah, what I came here to say. The biggest culprit in this mess was Andy Fastow, Chief Financial Officer. I have looked him up online (unlike other true crime stories, this one does not have a batch of photographs wedged in the middle) so I could see what the bastard looks like. I learned that this good-looking guy flipped so he could get a lesser sentence. Yes, this way more were brought down, but Fastow himself was the biggie. That seems like an error in judgment on the side of the prosecutors, but I wasn't there. I don't know what they were dealing with. It does seem right that the heads of the corporation were convicted - even if Lay were ignorant of much of it he shouldn't have been. That's what he gets the big bucks for.