THE RISE AND FALL OF ENRON
January 2002

In less than two decades, Enron grew from a small midwestern gas pipeline company into the world's largest energy trader with a pipeline business on the side. The following timeline charts the company's rise and fall.

Nov. 29, 2001: What made Enron collapse? Online NewsHour Report on Energy Deregulation Browse the NewsHour's coverage of: business	1985 Enron is formed when a Houston-based natural gas company merges with a gas provider in Nebraska to operate a natural gas 37,000-mile pipeline. 1986 Former Exxon executive, Kenneth Lay, becomes chief executive officer of Enron. Enron begins operating its Northern Natural Gas Pipeline, a 64,000-mile pipeline linking the Great Lakes with Texas. 1996 The Federal Energy Regulatory Commission initiates the deregulation of energy markets.
	The meteoric rise of Enron: 1998-2001
	1998 Enron acquires Wessex Water and enters the water and waste waterforms market through its Azurix subsidiary. Azuriz manages and owns utilities primarily in South America, North America, the United Kingdom and Canada. 1999 Enron begins selling broadband Internet services as a wholesale commodity. That spring, the Houston Astros announce the name of Houston's new ballpark, "Enron Field." Enron's Azurix subsidiary begins commercial operations through its 1,860-mile natural gas pipeline running from Bolivia to Brazil. By this time, Enron has foreign investments and assets valued over $20 billion and subsidiaries operating in over 50 countries. In November, Enron launches EnronOnline, an energy and commodities trading site. Dec. 2000 Enron files its annual report in which it claims to have tripled its revenues since 1998. Jan. 2000 Fortune magazine ranks Enron no. 24 among the "100 Best Companies to Work for in America." Feb. 2001 Kenneth Lay hands the chief executive position to Jeff Skilling, who served as Enron's president and chief operating officer since 1997. April 2001 Since 1997, Kenneth Lay and his wife contributed a total of $444,960 in political donations, mostly to members of the Republican Party, including Sen. Phil Gramm (R-Texas), whose wife, Wendy Gramm, served on the Enron board and as the former Chairman of Futures Trading Commission, according to the Federal Election Commission data. According to the Center for Responsive Politics, the Lays have contributed almost $883,000 to candidates and parties since 1989, of which 90 percent went to Republicans. According to FEC data, Enron employees, executives, and the Enron Corp. Political Action Committee contributed nearly $114,000 to President Bush's presidential campaign between 1999 and 2000. May 2001 Prices for natural gas soar in California, one of the first states to deregulate its energy markets. California politicians accuse Enron Corp., owner of the 2,500-mile Transwestern Pipeline in California, of manipulating market prices for natural gas.
	A sudden collapse
	July 2001 New CEO Jeff Skilling gets hit in the face with pie from a protester who blamed Enron for California's energy crisis. California consumer groups and politicians accused Enron of price-gouging during California's power shortage. Enron stock drops to $42.93. July 2001 As the California power crisis provokes rolling blackouts, Pacific Gas and Electric Company files for bankruptcy amid skyrocketing costs. Pacific Gas and Electric Company is one of the top three utility companies, along with Southern California Edison and San Diego Gas & Electric. Aug. 14, 2001 CEO Jeff Skilling resigns for "personal reasons." Oct. 12, 2001 Enron discloses a $638 million loss in its third quarter for this fiscal year. Oct. 24, 2001 Andrew Fastow ousted as chief financial officer due to questionable business transactions and partnerships. Jeff McMahon takes over as CFO. Oct. 31, 2001 Securities and Exchange Commission upgrades its inquiry into a formal investigation on Enron's business transactions and accounting records. Nov. 8, 2001 Enron revises its financial statements to reduce earnings by an additional $586 million over the past four years, in large part due to losses with suspect partnerships. It is also disclosed that Fastow made $30 million in fees and profits from his involvement with the outside partnerships. Enron announces it must pay a $690 million in debt, with another $6 billion by next year. Enron's CEO Lay calls the U.S. Secretary of the Treasury, Paul O'Neill, to discuss Enron's financial troubles, according to a Treasury Dept. spokesperson. Nov. 9, 2001 Dynegy offers a rescue buy-out of Enron for $10 billion in stock. Dynegy also agrees to pay back more than $13 billion of Enron's debt, and Dynegy's major shareholder ChevronTexaco providing Enron with an immediate $1.5 billion. Nov. 19, 2001 Standard and Poor, a major credit rating agency, downgrade Enron's debt to "junk status," triggering Dynegy to withdraw its purchase offer. Nov. 28, 2001 Dynegy terminates purchase agreement. Dec. 4, 2001 Enron files for the largest Chapter 11 bankruptcy protection in U.S. history. Its two major investors, Citibank and J.P Morgan, provide $1.5 billion of emergency funding. Enron lays off nearly 4,000 employees from its Houston headquarters, many of whom had lost up to 90 percent of their 401(k) retirement savings as Enron's shares took a nose-dive that month. Enron also files a $10 billion damages suit against Dynegy for allegedly breaching the purchase agreement. Dynegy files a counter-suit in attempt to gain ownership over the Northern Natural Gas Pipeline, one of Enron's earliest assets. Dec. 6, 2001 Enron discloses that it had paid $50 million to 75 of its most successful traders in attempt to prevent them from leaving company as it planned to merge with Dynegy. Enron also reveals that several days before it filed for bankruptcy, the company gives nearly 500 bonuses of up to $55 million. Dec. 8, 2001 Amalgamated Bank, a New York bank mostly owned by unions, files suit against 29 Enron executives and board members, including Wendy L. Gramm (wife of Rep. Phil Gramm and former Chairman of Futures Trading Commission in Washington, D.C.) and Lord John Wakeham (former UK Secretary of State for Energy), Dr. Charles E. Walker (former Deputy Secretary of the Treasury). The bank alleges the Enron officials artificially inflated the company's stock value, gaining millions of dollars based on fraudulent financial records, before the company's stock plunged. The suit requests that a federal judge freeze bank accounts containing over $1 billion of 29 Enron executives and board members, stressing that the company illegally froze employees' 401(k) savings, which were largely invested in Enron's stock. Dec. 10, 2001 Labor Dept. launches an inquiry into Enron's handling of employee retirement pensions, notably the company's temporarily freezing employee 401(k) assets; nearly 70 to 90 per cent of laid off employees lost their retirement savings from Enron's stock crash. The SEC also begins investigation into the role of Enron's independent auditors, Arthur Andersen. Dec. 12, 2001 House Financial Services Committee hears testimony on Enron's financial deterioration from officers from the Securities and Exchange Commission, accounting firm Arthur Andersen, and members from the AFL-CIO, and Thompson Financial. Kenneth Lay, the Chair and CEO of Enron, refuses to attend the hearing, but plans to testify in front of Congress on Feb. 4, 2002. Arthur Andersen CEO Joseph Berardino testifies that Enron may have committed "illegal acts" in its financial accounting practices, sparking a criminal investigation by the Justice Department. Many congressional members and the Bush administration do not plan to dismiss the future opening of energy markets. "I think the [Enron] circumstances ... don't necessarily relate to the issues of energy deregulation," said U.S. Energy Secretary Spencer Abraham. In the Senate, Democrat Majority Leader Tom Daschle (D-S.D.) plans to push forward the opening of wholesale electricity markets, but recommends that the Federal Energy Regulatory Commission create a monitoring system to oversee electricity and natural gas prices. Dec. 18, 2001 Senate Commerce, Science, and Transportation Committee begins testimony on the collapse of Enron. Enron shareholders, former employees, and representatives from Arthur Andersen, Enron's independent auditors, provide statements. Enron Chair Kenneth Lay, does not attend, but plans to attend a hearing scheduled for Feb. 4. Sen. Byron Dorgan (D-N.D.), head of the Subcommittee on Consumer Affairs, and Sen. Fritz Hollings (D-S.D.) request that the Federal Trade Commission launch an investigation into Enron's allegedly fradulent accounting practices and illegal business strategies that ultimately caused 4,000 employees to lose their pension savings. Jan. 2, 2002 Governmental Affairs Committee Chairman Joe Lieberman, D-Conn., and Permanent Subcommittee on Investigations (PSI) Chairman Carl Levin, D-Mich., announce an inquiry into Enron and whether or not the federal government failed to protect Enron's employees and businesses affected by Enron's sudden bankruptcy. Formal hearings are scheduled to begin on January 24. Jan. 4, 2002 Enron and Dynegy settle their dispute over the ownership of the Northern Natural Gas Pipeline after Enron agrees to turn over the pipeline to Dynegy at the end of January. Jan. 10, 2002 The Justice Department launches a criminal investigation of Enron, and its allegedly illegal financial disclosures, investments, and its pension policy. Attorney General John Ashcroft and his Chief of Staff, David Ayres, recused themselves from the investigation since Enron had contributed to Ashcroft's failed 2000 senatorial bid. A federal judge in Houston deals a blow to plaintiffs in a civil suit requesting a freeze on bank accounts of Enron executives and board members.

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