the CAMP ENRON Report

... gateway to the next Progressive Era?

Some say it's nothing but a train wreck ... roll in the big cranes, clear the track, see what the crew's been smoking. If I thought so, I'd not be writing this ... and if they thought so, they'd not be drumming so hard.

For a brief orientation, see this
Welcome to Camp Enron

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Camp Enron Archives
01/01/2002 - 02/01/2002 02/01/2002 - 03/01/2002 03/01/2002 - 04/01/2002 04/01/2002 - 05/01/2002 05/01/2002 - 06/01/2002 06/01/2002 - 07/01/2002 07/01/2002 - 08/01/2002 08/01/2002 - 09/01/2002 06/01/2003 - 07/01/2003

(2) All "major" articles of older material have now been imported, some with updates worth perusing. We'll keep it all on the main page for a while, will add a few loose pieces of history, will trim the main page and index the archives for convenience later.


free agent, loose cannon, pointy stick ... taking an imposing analytic toolkit out of the box, over the wall and into the street ... with callous disregard for accepted wisdom and standard English

reading the tea leaves from original angles, we've led with uncannily prescient takes on the federal surplus, the dotcom crash, the "Energy Crisis", the Afghan campaign, the federal deficit.

More where those came from ... stay tuned.

For brief orientation, see this
Welcome to CP

... gateway to the next Progressive Era?

For a brief orientation, see this
Welcome to Camp Enron

Many thanks to Tony Adragna and Will Vehrs, still shouting 'cross the Potomac at QuasiPundit. Early Camp Enron material can be found in QP's Dispatches department.
Tuesday, April 16, 2002

--- Short Takes from a Long Week ---

The Baxter suicide note was finally made public ... a nonevent. No insight, no grand pathos, no sinister innuendo, no originality, just "I can't go on", etc. As Enron and related drama unfolds, I expect there will be others who can't go on.

Texas Tuesday - so it was written, so it was done. Dallas Mayor Ron Kirk wins the 4/9 Texas Senate Primary run-off (suggested here in early January as an Enron side-effect), giving Dem's their best shot at Phil Gramm's old seat.

BIG news on Andersen is this piece of old news:
In Andersen's [1996 $10.5M] criminal settlement of the [1990 bankruptcy] Colonial case, the firm was not required to admit wrongdoing but had to submit to a 60-day performance review. Federal prosecutors devoted most of their energies to pursuing Colonial's principals.

Andersen was accused of helping Colonial construct what amounted to a giant Ponzi scheme ... Andersen officials were involved in "the purposeful destruction of documents,"
Is there a pattern here? How does it play in DOJ's current deliberations?

The Andersen/DOJ deferred prosecution deal would normally preclude new criminal charges on old business ... what are the boundaries on this provision? I still expect Andersen to face criminal charges unrelated to document destruction, including some unrelated to Enron except by schematic similarity. DOJ may be satisfied with the mortally-wounded Andersen as a cooperating witness in bigger pursuits, but I see billions in partners' equity walking out the door. What if it turns out that Andersen was really MR. BIG?

NYT's Kurt Eichenwald has his ear to the ground on an investigation of inside-insider trading, a scheme codenamed "Greyhawk". On the verge of a stock-hyping announcement, Enron exec's apparently conspired to route share price gains through partnerships and back onto ENE's bottom line. Booking gains on a corporation's own stock is normally illegal; trading on inside info is normally illegal ... is the combination illegal? Buying stock on insider info is illegal; waiving an existing hedge achieves the same result ... but is that illegal? The law doesn't seem to have been drafted with these novel gambits in mind.

Enron's new CEO Cooper, the restructuring specialist, estimates debt 25% higher than disclosed in December bankruptcy filings. Could go higher. See the Chron. I still can't figure out why they're trying to save this piece of shiroadkill.

The week in court
-- NY Bankruptcy Judge Gonzalez orders an add'l independent examiner to protect creditors' interests against creditors who are also Enron SPE business partners.
-- First appointed bankruptcy examiner Harrison Goldin says "freeze the cash transfers" between Enron and subsidiaries. (See previous items on NEPCO, etc.)
-- Houston shareholder suit Judge Harmon discloses her children's trust fund holdings in tangentially-implicated companies (banks, brokers, etc.). Big dollars but no objection from the parties. (May prove to be a regrettable decision as the web of implication expands.)
-- Enron's suit against Dynergy (for bailing out of the proposed merger) is moved to Houston.

Old fights continue
-- Retention contention: SEC and others object to Enron's new $140B key-employee bonus budget, demand details.
-- Enron directors and Enron-happy investment managers are dropping from plum positions elsewhere.
-- They're still struggling in India to resolved divergent interests and get the Dabhol power plant out of mothballs ... or at least sold off and out of bankruptcy.

Old buzz continues
-- Andersen inches toward settlement with DOJ ... any day now ... maybe tomorrow? It ain't easy for either side.
-- They say Andersen will settle Enron's claims against it for ~$300M ... that's less than 1/2 cent on the dollar of market cap lost in the big fall.
-- Congressional bloodhound Henry Waxman is sniffing around JP Morgan Chase. He's not the only one.
-- Army Sec'y White is still being pecked to death by low-grade ethics allegations... the latest involving FBI investigation of possible insider trading.

Reforms not yet in gear
-- House passed pension package weakens employee protections ... expect stalemate this year.
-- Audit reform remains elusive ... in fact, any feasible solution to the audit conflict problem remains elusive.
-- Financial standards reform isn't even in the starting blocks. Key players know there's a crack in the world, but they don't realize how deep it goes.
-- Option reform talk is hot and heavy, but it's more complicated than it looks. Current practice is clearly wrong, none of the leading reforms goes far enough.
-- NY A.G. Eliot Spitzer may have Wall Street firms over a barrel, now they're bargaining over structural reforms of security analyst operations ... but what to do? Most people won't pay for analysis, it gets gratis'd in with customer relationships or subsidized by some other line of business ... which is exactly where the conflicts of interest come into play. Handcuffs won't solve this problem.

Old business
-- Trading records indicate Enron dehedged and bet big on the energy price spike, with what looks like perfect timing. Western A.G.'s and PUC's allege gouging and self-dealing to kite prices. Looks plain as day on the charts, but a difficult technical case to bring home. Look for confessions from mid-level players under DOJ pressure, months or years down the line.