Enron, Ep 4: The Downfall

Bad Bets

The Wall Street Journal

News, Business, True Crime

4.8 • 1.3K Ratings

🗓️ 2 November 2021

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

The biggest problem for Enron wasn't that former CEO Jeffrey Skilling suddenly quit, or that former CFO Andy Fastow was enriching himself. It was that Enron's success was dependent on an image that was partly a facade. After Wall Street Journal reporters pulled back the curtain, it all came tumbling down. In this episode, how Enron fell from Wall Street darling to bankruptcy in just a matter of weeks. Questions about the making of Bad Bets? Join John Emshwiller and Rebecca Smith for a live Q&A on Thursday, November 4th at 2 p.m. EST. Sign up at wsj.com/live-qa. We'd love to hear from you. John Emshwiller hosts. The original reporting on which this season is based was done by him and Rebecca Smith. Bad Bets is a production of The Wall Street Journal. This season was produced in collaboration with Neon Hum Media. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	You're listening to Bad Betz, a podcast from the Wall Street Journal that unravels big
0:06.1	business dramas that have had a big impact on our world.
0:10.0	This first season chronicles the collapse of Enron.
0:13.1	I'm John M. Schweiler.
0:15.3	We've heard a lot about the two men whose decisions seem to precipitate Enron's downfall.
0:20.0	CEO Jeff Skilling with his grand plans.
0:22.8	And CFO Andy Fashtow with his financial engineering.
0:26.5	But the biggest problem for the company wasn't that Fashtow was enriching himself or
0:30.5	the skilling and suddenly quit.
0:32.3	It was an Enron success, was dependent on an image that was partly a façade.
0:37.7	And when we started pulling back the curtain, everything came tumbling down.
0:42.7	Stay with us.
0:47.3	Our interest rates heading higher.
0:49.1	San Francisco Fed President Mary Daley tells us what policy makers are thinking about
0:53.2	the economy and your money.
0:55.2	On WSJ's Take on the Week, subscribe today wherever you get your podcasts.
1:25.6	In early September 2001, my Wall Street Journal colleague Rebecca Smith and I were digging
1:30.6	into Enron and those very suspicions looking LJM partnerships that Fashtow had been running.
1:36.6	It appeared Enron was using these outside partnerships to hide losses and keep earnings
1:40.5	growing.
1:42.0	Jim Timmons, the former Enron employee turned whistleblower, was our best lead.
1:47.2	He said he had internal documents.
	...

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