Conspiracy of Fools: A True Story

Product Details

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

Product Reviews

(5 stars) - Reads like a novel.
Conspiracy of Fools by Kurt Eichenwald, a meticulously researched telling of the Enron collapse, has a surprisingly compelling narrative which reads like a novel. This richly detailed story of greed and arrogance entertains without sacrificing accuracy. Moreover, Eichenwald clears up a number of commonly held misconceptions about the Enron saga, including the circumstances surrounding Jeff Skilling's abrupt resignation.
As far as the three major players are concerned, Eichenwald's research paints the following portraits:

Ken Lay- With a PhD. in economics and a resume that made him a credible candidate for Secretary of the Treasury, Lay was not stupid. However, he allowed an anything goes corporate culture to flourish at Enron. Eichenwald shows that illegalities were tolerated at Enron before Fastow or Skilling were ever hired.

Jeff Skilling- Immature, arrogant and willfully ignorant of how Enron consistently generated substantial earnings quarter after quarter despite the lack of profitability among its many component divisions.

Andy Fastow- Incredibly greedy and amoral. Unqualified to be CFO of a major corporation. Beloved by Skilling and Lay because he made it look like he was bringing huge profits to Enron even as he was shamelessly stealing from its shareholders.

Also culpable in this very tragic tale are the SEC, Merrill Lynch and other investment banks and the accounting firm Arthur Andersen.
Conspiracy of Fools documents how the collapse of Enron simultaneously brought about the collapse of Arthur Andersen as well.

Bottom line: A must read for those wishing to know the details behind the collapse of Enron. An event that proved tragic for thousands of shareholders, employees and pensioners. And one which presaged even greater corporate upheavals that would follow.

(5 stars) - Conspiracy of Foolds
I began reading this book with some misgivings because the subject matter isn't exactly tea fare. Having not read anything by Kurt Eichenwald until now, I was thrilled with his writing style. I lived in Dallas during all the hoopla and news of the demise of Enron so I was somewhat familiar with the main characters. Eichenwald does a marvelous job of developing these characters and their personalities with all their pluses and minuses. Unadulterated greed is at the heart of this whole experience and he exposes this at every turn. This is a thick book, but I couldn't put it down except to rest. It read like a mystery novel and I credit Eichenwald with his marvelous ability to keep me engaged, turning those pages for the next unbelievable deal and/or crisis. Everyone is taken in from Washington, D. C. on down the line. Hopefully some lessons were learned by those in power as well as the rest of us.

(4 stars) - Great read
I read The Smartest Guys in the Room and it is factual and goes into detail regarding the transactions and deals that brought Enron down, but this book is much more entertaining in that it is written like a story. I suggest reading The Smartest Guys in the Room 1st and then read this book - it brings the first book to life and then buy or rent the video.

(2 stars) - Could have been written by Ken Lay
This was the first of three books and numerous articles I have read about the Enron catastrophe. This one seems to take great pains to exonerate Ken Lay. Everything is someone else's fault.

There is a lot of interesting and factual information here, but most of it seems twisted to protect Ken Lay and lay all the blame on Andy Fastow. While Fastow is certainly a crook, the main problem with Enron was not the end-stage shenanigans, but the way the company was run, the way commissions and bonuses were paid for lousy deals, Enron's system of robbing California and other states of billions of dollars, that really caused the problems. Ken Lay ran Enron the way George Bush ran the US economy, and got similar results. (It didn't help that Lay/Enron was Bush's biggest financial backer since the early 1990's, either.)

[...]

(4 stars) - Very concise and engaging read.
Kurt Eichenwald has done a masterful job of laying out the Enron debacle. I was engaged from the beginning to the end. For such a complex issue, the explanation of greed and criminality is explained in a way that it is easy to understand, even if you are not an accountant.

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