Conspiracy of Fools: A True Story

What went wrong? Veteran New York Times financial journalist Kurt Eichenwald does an epic job of telling Enron's story in his 742-page tome Conspiracy of Fools. Eichenwald, a finalist for the Pulitzer Prize in 2000, also authored The Informant, an acclaimed account of a vast international price-fixing scandal at Archer Daniels Midland. Conspiracy of Fools tells the Enron tale with a cinematic narrative style, relying almost exclusively on scene and dialogue to bring his account to vivid life. We see how federal regulators opened the doors for the Enron fraud early on when they let the company loosen up its accounting rules and essentially cook its books. We read how Enron bullied Wall Street firms into issuing favorable reports about its share price by threatening to take away lucrative banking fees. Eichenwald also reveals how Enron manipulated electricity prices during the California energy crisis of 2000. Eichenwald's book is less successful in situating the Enron debacle in its wider context--the cycle of market speculation that reached a historic summit in the dot-com bubble. Was Enron just a cautionary sign of the greed and lack of ethics of a few bad apples, or was it more symptomatic of an entire market system? That may be a debate for another book. --Alex Roslin

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0 of 0 people found the following review helpful:

Boris Karloff in a Business Suit, 2009-01-04
The story of Enron is part horror story, part cautionary tale and fully apocryphal. Bring the top minds of business together, create a corporate culture which aspires to riches, and bring on unchecked growth, and watch it self immoliate.

Enron had cultivated corporate rock stars in the 1990's. Their company was sought by politicians and sitting President's. Their profitability was unmatched, and their hunger for market share in the energy business was unmatched. Looking back on the landscape of the past ten years, Enron was at the epicenter of the demand side of energy, as it began its fierce ascent.

However, greed, arrogance, corruption and incompetence of its' financial officers brought it down. Nobody listened to the red flags being waved, and the accounting giant of Arthur Andersen looked the other way. With the political permissiveness of the day, the stars aligned to bring down this corporate giant in almost blinding speed.

The cast of characters is compelling, with Ken Lay in the middle. Lay comes off as an almost innocent dupe, and a tragic figure. I suspect the real truth is that Lay was more at the center of the finacial maelstrom, or at least he knew more than this book portrays. Lay became the fall guy for the Enron collapse, although the real villain in this particular portrayal is Andy Fastow, who inveigled his way to CFO.

Fastow's inside financing, which leveraged Enron, and earned himself millions of dollars in illegally got profits, ultimately greased the skids for Enron's precipitous fall. The final number of Enron's loss was somewhat over $36 Billion, ande the human toll of misery has still not been tallied.

Eichtenwald's book was well researched, and reads like a novel at times. His portrayals of the characters, although differnt from other books on the subject I have read (most notably Jeff Skilling) leaves the reader with a solid familiarity of each, if not an intimacy.

However, it is style that the author writes that sometimes troubles me. There is a style of journalism that injects the author onto the scene. for instance, the author might right "Ken Lay put his head into his right hand and massaged his eyebrows as he sat alone in his office."

This sullies the credibility of the writer to me.

He also writes at times the thoughts of the participants. Again, unless he directly interviewed these central characters, and there is no evidence in the source section that he did, he is inserting his bias and imagination into this story.

In spite of this, it is the best book so far on the Enron meltdown, and bears re-examining after the real estate crisis we are suffering through at this writing.



0 of 0 people found the following review helpful:

Read it., 2008-06-26
Seriously, this guy churns out a book every 4 years cause he does his research. Add to that the fact he is an exceptional writer. Perfect guy to write about this historic meltdown. Hard to rate your favorite books but remember how much I enjoyed reading it two years later. What a blast of a read (tragic story though). After reading the book I became so interested in the Enron debacle, that I actually skipped class and drove to houston (two years ago) to watch Fastow get cross-examined during Skilling and Lay's trial.

So yes I fully reccomend and endorse this book. Buy it and enjoy!


0 of 0 people found the following review helpful:

a horror story of greed and incompetence, 2008-06-16
Conspiracy of Fools is the story of Enron, from beginning to collapse, researched and presented in excruciating detail. It's a horror story of greed, incompetence, arrogance, and willful ignorance. And it's a cautionary tale depicting the importance of accounting. It's also thought-provoking, particularly with regard to the contradictory nature of American business--what's good for the actual business isn't necessarily what's good for the stockholders, and vice versa.

The first quarter or so of the book, I spent a lot of time flipping back to the the cast of characters in the front of the book, and being frustrated by the way it jumped between characters and POVs. After I became familiar with the major players, it read much more smoothly.

The other thing that drove me nuts for quite a while was that so many scenes were described with precise dates, sometimes even down to the minute. I kept expecting those times to be significant in some way, but they never were. I eventually realized that it was supposed to be proof of how accurate the research was, but I just found it distracting.

There's more detail than I expected, but in this kind of book, I appreciated that--it felt like I got a clearer picture of not only what happened, but why, and how it was allowed to happen.

Other than that, it was fascinating, and horrifying. Reading it was like watching a series of train wrecks, or a horror movie where you're screaming at the bimbo not to go up the stairs, but she does anyway. I'm glad I read it.


1 of 1 people found the following review helpful:

Giving You, The Stockholder, The Business, 2008-06-11
As a 56 year old very successful business owner of 30 years, I always looked in awe at these 40 year old CEOs and CFOs of major publicly held corporations. How did these guys learn so much in such a short period of time? Are they actually that much smarter than I am? Apparently NOT! The only difference between us is that I could never match their levels of arrogance, greed, stupidity and total lack of ethics. Welcome to the world of big business.

As tragic as the ENRON situation is, what transpired behind the scenes was so incredulous, I found myself laughing out loud. The fact that they thought they could get away with some of these schemes was astounding. The fact that they got away with them as long as they did is a tribute to the stupidity of the supporting staff around them. This book should be required reading for any college grad going into the business world.


0 of 1 people found the following review helpful:

Excellent, revealing, very well written, 2008-05-30
It was most interesting to get a glimpse into the personal life as well as the unethical business practices of the executives.

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