Enron: what you need to know for your A Level exam

June 27, 2018

Characters:
Kenneth Lay (1942 – 2006)

A convivial man in his 60s.
Ken Lay, one of the most powerful businessmen in Texas, served as ENRON Chairman and CEO from 1986 until his resignation in 2002. He was friends with George W. Bush and Dick Cheney. Bush affectionately referred to him as “Kenny Boy.”
Between 1989 and 2001, he reportedly unloaded more than $300 million of his ENRON stock – all this while encouraging his employees to continue buying the stock which was rapidly decreasing in value.
Lay was charged with and found guilty on six counts of conspiracy and fraud. In another separate trial, he was also found guilty of four counts of fraud and false statements. It was expected that he would be given between 20 to 30 years in prison. Before he was sentenced, Lay died of a heart attack in a remote community in Colorado on July 5, 2006, at the age of 64.
Jeffrey Skilling (b. 1953)
A 40-something single accountant.
Skilling began his career with ENRON in 1990 when Ken Lay offered him the position of chairman and chief executive officer of the ENRON Finance Corp. By 1997, he rose to the very top of ENRON by becoming its President and Chief Operating Officer, answering only to Ken Lay. His meteoric rise is attributed to his groundbreaking idea that ENRON did not actually have to produce energy, but rather they should focus on energy trading and finance. He also introduced “mark to market accounting” which enabled ENRON to immediately, upon signing any new contract, enter the expected profits into their books.  Through this method of accounting, it appeared to all that ENRON was making huge continuous profits and the value of ENRON stocks soared. By February, 2001, Skilling was earning $132 million a year.
Skilling resigned from ENRON in August of 2001 for “personal reasons” and within a month sold off $60 million of his ENRON shares. 
 Skilling was charged in February, 2004, with 35 counts of fraud, insider trading and various over crimes. Two months later, he was arrested for public intoxication after harassing passersby thinking they were undercover FBI agents. In 2006, he was found guilty of numerous charges and sentenced to 24 years and four months in prison and fined $45 million dollars. His case has since been the subject of court appeals and in 2013 federal prosecutors announced a deal that cut 10 years off his sentence and makes him eligible for release in 2017.
Andy Fastow (b. 1961)
Fastow was promoted in 1998 by Jeffrey Skilling to the position of Chief Financial Officer. It was Fastow who engineered the company’s practice of creating shadow companies to hide ENRON’s massive losses. This ensured that the books continued to show increased profits and made the ENRON stocks attractive to investors.
In 2002, he was charged with 78 counts ranging from fraud to money laundering. Two years later, he made a deal whereby he would plead guilty to two charges of wire and securities fraud in exchange for his testimony against other ENRON executives. Because he was so cooperative, he received a six-year prison sentence and was released in December, 2011. He now works at a law firm in Houston as a document review clerk.
Other Players in the Story and the Play
Claudia Roe
 

Executive in charge of ENRON’s International Division. She is a high-powered and short skirt wearing executive in her 40s.

While this character is invented by Playwright Lucy Prebble, she represents an amalgamation of several women who played a key role in the ENRON story, most significantly Rebecca Mark, head of ENRON’s International Division from 1991 until her resignation in 2000.

Employees/ Traders
The Board
Raptors


Ramsay & Hewitt 

This was a fictional law firm. 

Arthur Andersen

Once one of the “Big Five” American accounting firms. Found guilty of criminal charges relating to ENRON’s financial auditing, including witness tampering and destruction of documents. As a result, the firm surrendered their licenses and right to practice.
Sheryl Sloman

Analyst at Citigroup - the third largest bank in the United States.


J.P. Morgan

The largest U.S. bank by assets and market capitalization.

Lehman Brothers

A global financial services firm. Before declaring bankruptcy in 2008, Lehman Brothers was the fourth largest investment bank in the USA.
Irene Gant

ENRON employee who lost everything
Skilling’s Daughter
Lawyer
Reporters
Senator
Congresswoman


Barbara Njau



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