Man-Made

“Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings.”

― John F. Kennedy

ENRON, A Texas Co (1985-2001)

($100 billion Annual Revenue US Co). It ranked as the seventh-largest company on the Fortune 500 and the sixth-largest energy company in the world

SHARP STEEP UPBLAST RISE UP 1985

Enron's origins date back to 1985 when it began life as an interstate pipeline company through the merger of Houston Natural Gas and Omaha-based Inter North. Kenneth Lay, the former chief executive officer of Houston Natural Gas became CEO, and the next year won the post of chairman.

From the pipeline sector, Enron began moving into new fields. In 1999, the company launched its broadband services unit and Enron Online, the company's website for trading commodities, which soon became the largest business site in the world. About 90 per cent of its income eventually came from trades over Enron Online.

Wall Street was impressed with Enron's strategy of swooping into formerly regulated markets to broker contracts for natural gas, electricity or unused telecom bandwidth. The company was celebrated as a paragon of American ingenuity, a stodgy gas pipeline company that had reinvented itself as a high-tech clearinghouse in an ever-expanding roster of markets. Enron's push to force utilities into the Internet age with its online trading systems, at a seemingly handsome profit, became an epic tale of the dot-com revolution.

It now appears that Enron's tale may be more cautionary than epic. Enron envy has crashed, along with the company's stock price, as serious questions emerge about its bookkeeping. Enron disclosed earlier this month that $1.2 billion in market value had vanished as a result of a controversial deal it entered into with private partnerships run by its chief financial officer, Andrew Fastow.

Most alarming was Enron's reluctance to shed light on management's wheeling and dealing. ''Related-party transactions,'' as the accountants call them, are fraught with conflicts of interest. Though much remains to be learned about these transactions, their scope and lack of transparency suggest that Enron may have in effect created its own private hedge fund to assume some of the risk and mask the losses of its complex trading. The extent to which company insiders profited from the partnerships is not yet clear.

Enron has scrambled to dampen Wall Street's concerns, acknowledging its credibility problem while insisting on the health of its core businesses. On Wednesday it brought in William Powers, the dean of the University of Texas School of Law, to review the transactions. The Securities and Exchange Commission has launched its own formal investigation. Mr. Fastow was forced to resign, following Jeffrey Skilling, the man credited with driving Enron into new cutting-edge businesses, out the door.

Growth for Enron was rapid. In 2000, the company's annual revenue reached$100 billion US. It ranked as the seventh-largest company on the Fortune 500 and the sixth-largest energy company in the world. The company's stock price peaked at $90 US. In its heydays, Enron is bigger than GE (General Electric, incorporated in 1892)

SHARP STEEP DOWNHILL SLALOM ALL THE WAY TO HELL 2001

However, cracks began to appear in 2001. In August of that year, Jeffrey Skilling, a driving force in Enron's revamp and the company's CEO of six months, announced his departure, and Lay resumed the post of CEO. In October 2001, Enron reported a loss of $618 million— its first quarterly loss in four years.

Chief financial officer Andrew Fastow was replaced, and the U.S. Securities and Exchange commission launched an investigation into investment partnerships led by Fastow. That investigation would later show that a complex web of partnerships was designed to hide Enron's debt. By late November, the company's stock was down to less than $1 US. Investors had lost billions of dollars.

On Dec. 2, 2001, Enron filed for bankruptcy protection in the biggest case of bankruptcy in the United States up to that point. (WorldCom's collapse would later steal that dubious honour.) Roughly 5,600 Enron employees subsequently lost their jobs.

The next month, the U.S. Justice Department opened its investigation of the company's dealings, and Ken Lay quit as chairman and CEO.

In January 2004, Fastow agreed to a plea bargain and a 10-year sentence. He pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud. He also agreed to cooperate with federal prosecutors.

In February, Skilling entered a plea of not guiltyto 40 charges, including wire fraud, securities fraud, conspiracy, insider trading and making false statements on financial reports.

Lay was charged with fraud and making misleading statements in July. He pleaded not guilty to the 11 charges.

Lay, Skilling go on trial

The trial of Lay and Skilling began in January 2006. Lay and Skilling both testified for more than a week in their own defence. Some of the charges against them were dropped.

Prosecutors alleged that Lay and Skilling used "accounting tricks, fiction, hocus-pocus, trickery, misleading statements, half-truths, omissions and outright lies" to commit their crimes.

Lawyers for the two accused said their clients may be guilty of bad business judgment at Enron, but they never broke the law. "The company failed, but it did not fail because of a fraud," Lay's lawyer, Bruce Collins, told the jury in the case.

Defence lawyers also argued that former Enron executives who took plea deals and testified against Lay and Skilling accepted responsibility for crimes they didn't commit.

Testimony wrapped up, with the jury beginning deliberations on May 17 and presenting the verdict on May 25

Ken Lay died in 2006 after a severe heart attack

Jeffrey Keith "Jeff" Skilling, former CEO of Enron Corporation. In 2006, he was convicted of federal felony charges relating to Enron's collapse and, as of 2018, is serving a 14-year prison sentence at FPC Montgomery in Montgomery, Alabama.

U.S. District Judge Sim Lake of the Southern District of Texas announced at a hearing in Houston today that Skilling would serve 14 years. His original conviction called for him to serve 24 years in connection with the collapse of the once high-flying energy trading firm. Under the agreement with federal prosecutors, Skilling could be released as early as 2017