OT: excerpts from a column in today's SF Chronicle re ENE
"...Dynegy got in a few extra licks by accusing
Enron of "breaches of representations,
warranties, covenants and agreements in the
merger agreement" -- in other words, lying its
Texas tail off.
How different from when I was at Enron and
the company, the biggest employer in
Houston and the largest energy trader in the
country, was all but immune to criticism.
In fact, that was the first thing that came up
when I sat down with Enron Chairman Ken
Lay in his plush 50th-floor office, overlooking
a new multimillion-dollar tower the company
was building and, not far off, the Enron Field
baseball stadium.
I asked how Lay felt about Gov. Gray Davis
characterizing him as a"pirate" who had
plundered California's power market.
This was back in the darkest days of the
state's energy crisis -- remember that? --
when Enron and other energy titans were
siphoning off billions of dollars in
hyperinflated power charges.
"It's very unfair," Lay told me, his brown eyes
almost moistening at the very mention of the
injustice he and his company had suffered.
"He's trying to vilify us. But we didn't make the
rules in California. We had nothing to do with
creating the problem."
Actually, Enron and Lay were early
proponents of California's bungled
deregulation of the state's electricity market
and, according to insiders in Sacramento,
played an active role in shaping the
legislation that would ultimately be our
undoing.
Maybe Lay didn't see it that way. Maybe he
was in denial. Maybe he just couldn't be
bothered to worry about the misfortunes of
others when Enron was still on top of the
world.
That has changed. Enron is now a penny
stock and the company's business practices
are under investigation. Authorities are
looking into murky financial dealings that may
have been intended to hide mountains of
debt.
I can't think of another corporate behemoth
that imploded as quickly, or as spectacularly.
After my audience with Lay, I was given a tour
of Enron's supercharged trading floor. The
company's Internet-based bidding system
made it the largest e-commerce entity in the
world. During the past two years, Enron
traders have handled more than $1 trillion in
transactions.
I had been expecting something Wall
Streetish -- men with their ties loosened and
sleeves rolled up shouting orders at one
another. What I encountered was a vast floor
of computer terminals at which sat hundreds
of young, casually dressed guys staring
calmly into flat-panel displays.
There was no yelling. Instead, there was rock
music blaring from speakers as traders
bopped their heads to the beat and matched
buy and sell orders for electricity and natural
gas, skimming off a few bucks in profit with
each transaction.
One trader called up California's power
market on his screen. He showed me how
Enron was buying electricity at $250 per
megawatt hour and selling it at $275. "Some
days we're at $250, some days $300 and
some days $500," the trader said.
To him, these were little more than blips on a
radar screen. To California, this was
evidence of how badly the state was
hemorrhaging money.
California now pays about $35 per megawatt
hour for electricity, according to the state
Department of Water Resources, which is still
picking up the pieces from the energy crunch.
Things are gradually returning to normal.
Enron, by comparison, is staring at the
biggest bankruptcy in U.S. history as $61
billion in assets comes up for grabs by
creditors. Shareholders, who would be last in
line to get their cash back, face the very real
prospect of walking away with nothing at all.
The damage would be extensive and
far-reaching. For example, the California
Public Employees' Retirement System, or
CalPERS, holds nearly 3 million Enron
shares. The stake was valued at $197 million
a year ago. It's now worth little more than $1
million.
When I was with Lay in his penthouse office, I
asked about allegations that Enron had
deliberately manipulated California power
prices to drive its own profits through the roof.
He smiled dismissively. "It's so easy to
conjure up conspiracy theories," Lay said.
He was right. Easier by the minute."
above commentary by David Lazarus 11/30/01
sfgate.com. |
