Pipe Dreams: Greed, Ego, and the Death of Enron
Author: Robert Bryce, Molly Ivins
List Price: $27.50
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ISBN: 158648138X
Publisher: PublicAffairs (08 October, 2002)
Sales Rank: 64,759
Average Customer Rating: 4.31 out of 5
Customer Reviews
Rating: 5 out of 5
Dumb as a Box of Hammers
The Enron books are coming out now, perhaps as fast as stock options granted to key executives at Enron. I expect some of these books will contain mind numbing financial details attempting to explain in very technical terms JEDI, Chewco, "roll-ups" "swaps" and "mark to market" accounting. This is not that book. With Molly Ivins providing an introduction, Pipe Dreams is a primer on ego, greed and ambition reminiscent of James B. Stewart's infamous summary of Michael Milken's shenanigans in Den of Thieves. While the players have changed the hubris has not. The tops of many corporations continue to be littered with individuals whose first mantra is "What's in it for me?" With the 1990's stock market providing an unlimited supply of investor cash, Bryce describes a new breed of Enron executives with their prestigious MBA's in hand, who ultimately overlooked the simplest of economic realities, you can't spend more than you make, at least not forever. The real story of Enron begins with the departure of Richard Kinder. Kinder, a stickler for detail and results, imposed a financial discipline on Enron which required every senior manager manage costs and results. At the time Enron is basically a pipeline company with a steady positive cash flow. Enron is a real money maker, but in the eyes of a certain Harvard Business School alum, Jeffrey Skilling, just a bit boring.
At its core this is ultimately a story about Jeffrey Skilling. Skilling, a McKinsey consultant with a Harvard Business School pedigree, is described in Bryce's book as the "Smartest son of ... I ever knew." A guru of new economics where the deal is more important than cash flow, Skilling ultimately proved to be financially "dumb as a box of hammers."
Bryce understandably cannot resist the temptation to inject more than a few editorial barbs into this work, perhaps because the actions of the players were so outrageous. In the end, this book will make you mad, no matter what your politics.
The book is written in an easy reading, chronological and conversational style. The 51 individual chapters are relatively short, focused on particular subjects and easy to follow. Unfortunately, while excellent, this book emphasizes only the main Enron management players; a disengaged and out of touch Ken Lay, a beguiling and ostentatious Rebecca Mark intent on making her deals regardless of the economics, an ambitious, too smart and financially undisciplined Jeffrey Skilling and a scheming Andy Fastow. For the most part the book ignores meaningful insights into the individual actions (or inactions) of the auditors and the Board of Directors which when the lawsuits and federal prosecution dust settle should provide additional fodder for a needed sequel.
Perhaps Bryce's most intriguing anecdote is the story of an Enron employee with a graduate degree from the University of Oklahoma. From my perspective here in Dallas, if Oklahoma ain't Texas it is mighty close. And when it comes to the energy bidness those folks in Massachusetts generally don't know their bottom from a dry hole. However, because she had a degree from OU instead of that other school, she was ostracized and condemned to the lower levels of Enron management. Sadly she was probably a lot better manager than the Harvard box of hammers.
Rating: 4 out of 5
Ozymandias redux
Meet Ken Lay, Chairman of Enron, who saw fit to send a corporate jet to retrieve his daughter from the south of France after she tired of partying with The Beautiful People. The cost to Enron? About $125,000. Here's Andrew Fastow, CFO and temper-tantrum-throwing bully, who created numerous sham corporations that turned him into a multimillionaire and helped to send the company spiraling into bankruptcy. Introducing Jeff Skilling, CEO, whose accounting legerdemain--learned at Harvard Business School-- bilked Enron shareholders out of millions.
These and many other corporate criminals are among the cast of characters in this fascinating book describing the rise and fall of Enron-- once upon a time the darling of Wall Street and now a company synonymous with corporate greed.
Robert Bryce does a very good job in explaining how a group of arrogant, greedy, crooked MBA types managed to ruin Enron and wipe out the 401k plans of many employees of the company--meanwhile filling their own pockets so they could buy multimillion dollar homes in the swankiest neighborhood of Houston. We learn of politicians, including President George W. Bush, who help to create policies favorable to Enron in exchange for campaign contribution dollars. And all this is explained in a readable style that translates the minutia of accounting practices into language easily understood by the layman.
Pipe Dreams, however, is not without its flaws. I counted numerous typographical errors in the book, perhaps because the publisher wanted it out before our ever-shortening attention spans wandered. And in the book's epilogue, Bryce refers extensively to a Wall Street Journal op-ed piece suggesting corporate reforms instead of drawing his own conclusions about the Enron debacle.
Still, if sordid tales of corporate malfeasance are your cup of tea, this is the book for you.
Rating: 4 out of 5
The Tail Isn't Far Behind
The author explains that fish rot at the head but the tail isn't far behind. Every journalistic treatment of Enron makes the same mistake. They excoriate higher ups but rank and file workers get a free pass.
If my employer flew first class, subsisted on Steak and Lobster, and allowed employees to acquire stock options worth a million dollars I would be suspicious. Public school teachers, police officers, and nurses don't get a million dollar retirement.
My dad was a Vice President for Medical Affairs. He had three deans and twenty department heads under him but his compensation package would make some mid-level Enron people cringe.
I would also wonder if my employer paid an employee's way through Harvard Business School especially if that employee already had a graduate degree behind her.
The most obvious indictment against Enron's rank and file is that they let the company's third world transactions go unnoticed. You cant get Johnny Walker out of a cactus and you cant rob out the world's poorest countries and still sleep at night. Similar Products
Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron
Power Failure: The Inside Story of the Collapse of Enron
Enron: The Rise and Fall
Anatomy of Greed: The Unshredded Truth from an Enron Insider
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