ENRON: The Smartest Guys in the Room


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Enron Timeline

Choose a time period below to explore the scandal.

1980s 1990s 2000 2001 2002 2003 2004 2005 2006

Office workers stand among desks with computers on them and look at three giant screens displaying graphs and other data on a wall

2001

January 2001
Belden’s West Coast power desk has its most profitable month ever: 254 million dollars in gross profits.

January 17, 2001
Rolling blackouts in Northern California.

January 22, 2001
Quarterly analyst conference call. Skilling reports: “outstanding…fantastic…tremendous…”

January 25, 2001
Analyst conference in Houston, Texas. Skilling bullish on the company. Analysts are all convinced. Enron’s CEO of Broadband Services, Ken Rice, increases his estimates for value of broadband.

February 2001
Tom White resigns from EES (Enron Energy Services, the retail division he headed since 1998) and becomes secretary of the Army. He cashes out with 14 million dollars .

Over the past year, Ken Rice cashed in 53 million dollars in shares and options.

February 5-14, 2001
Senior partners from Arthur Anderson, Enron’s accounting firm, meet to discuss whether to retain Enron as a client. They call use of mark-to-market accounting “intelligent gambling.”

February 14, 2001
Writer Bethany McLean interviews Skilling for Fortune magazine.

February 15, 2001
Mark Palmer, head of publicity for Enron, and Enron CFO Andrew Fastow go to Fortune to answer questions. Fastow to Bethany McLean: “I don’t care what you say about the company. Just don’t make me look bad.”

February 19, 2001
Fortune article by Bethany McLean is published: “Is Enron Overpriced?”

February 21, 2001
Employee meeting. Skilling says: “Yes, it is a black box. But it is a black box that’s growing the wholesale business by about 50 percent in volume and profitability. That’s a good black box.” Skilling announces Enron’s goal: “The World’s Leading Company.”

March 2001
Enron transfers large portions of EES business into wholesale to hide EES losses.

Arthur Andersen takes auditor Carl Bass off the Enron account after Bass questions Enron’s accounting practices.

March 23, 2001
Enron schedules unusual analyst conference call to boost stock. It works.

April 17, 2001
Quarterly Conference Call. In the call, now legendary on Wall Street, an analyst questioned Skilling on the company’s progress. Skilling dismissed him as an "asshole."

June 21, 2001
Skilling hit in face with blueberry tofu cream pie by a protester while speaking at the Commonwealth Club in San Francisco.

June 2001
FERC finally institutes price caps across the western states. The California energy crisis ends.

July 12, 2001
Quarterly Conference Call. Skilling still bullish.

July 13, 2001
Skilling announces desire to resign to Lay. Lay asks Skilling to take the weekend and think it over. According to Lay, he tried to talk Skilling out of resigning. Skilling says Lay didn’t seem to care about his announcement and that he offered to stay on for six more months with Enron. Lay claims Skilling wanted an immediate out.

July 24-25, 2001
Skilling meets with analysts and investors in New York. “We will hit those numbers. We will beat those numbers.”

August 3, 2001
Skilling makes a bullish speech on EES. That afternoon, he lays off 300 employees.

August 11, 2001
Skilling talks to Mark Palmer about preparing press release for resignation.

August 13, 2001
Board meeting. Rick Buy outlines disaster scenario if Enron’s stock starts to fall. All SPEs (special purpose entities created to isolate financial risk) crash. Skilling dismisses this. That evening, in board-only session, Skilling, in tears, resigns.

August 14, 2001
Skilling’s resignation announcement. In evening, analyst and investor conference call. Skilling: “The company is in great shape…” Lay: “Company is in the strongest shape that it’s ever been in.” Lay is named CEO.

August 15, 2001
Short sell investor Jim Chanos thinks the stock is going through the floor and bets aggressively on that. Chanos notes that Skilling’s departure coincided with release of second quarter 10-Q, when Enron’s cash flow was a negative 1.3 billion dollars for the first six months.

September 2001
Skilling sells 15.5 million dollars of stock, bringing the total of his sold shares, since May 2000, to over 70 million dollars.

September 26, 2001
Employee meeting. Lay tells employees Enron stock is an “incredible bargain,” and that, “third quarter is looking great.”

October 16, 2001
Enron reports a 638-million-dollar third quarter loss and declares a 1.01-billion-dollar non-recurring charge against its balance sheet, partly related to “structured finance” operations run by Chief Financial Officer Andrew Fastow. In the analyst conference call that day, Lay also announces a 1.2-billion-dollar cut in shareholder equity.

October 17, 2001
Wall Street Journal article, written by John Emshwiller and Rebecca Smith, appears. The article reveals, for the first time, the details of Fastow’s partnerships and shows the precarious nature of Enron’s business.

October 22, 2001
Enron acknowledges Securities and Exchange Commission inquiry into a possible conflict of interest related to the company's dealings with the partnerships.

October 23, 2001
Lay professes support for Fastow, saying he has the “highest regard” for his character during conference call with analysts and employee meeting.

October 23, 2001
In a massive shredding operation, Arthur Andersen destroys one ton of Enron documents.

October 24, 2001
Enron ousts Fastow.

October 31, 2001
Enron announces the SEC inquiry has been upgraded to a formal investigation.

November 8, 2001
Enron files documents with SEC revising its financial statements for past five years to account for 586 million dollars in losses.

November 19, 2001
Enron restates its third quarter earnings and discloses it is trying to restructure a 690-million-dollar obligation that could come due November 27.

November 28, 2001
Enron shares plunge below one dollar.

December 2, 2001
Enron files for Chapter 11 bankruptcy protection.

Read about Enron in 2002 >>


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