Dream Job Turns Into a Nightmare

Enron had used the Raptors to hedge its risky tech stock investments, protecting $1 billion in income over the past 15 months. The fall in the New Power stock threatened to topple one of the Raptor structures, triggering a domino effect that would knock over the others.

By August, the various structures were insolvent or close to it. Enron had had to put millions of shares of its own stock into the Raptors to rescue them in the spring, or it would have been forced to report more than $500 million in losses on its financial statements.

Skilling's job had become a nightmare of his own making.

He had pushed Enron to change constantly in a quest for the next new thing. Each annual report emphasized a different venture that would be its next big score.

"There was a new message every year," said David Micklewright, a managing director of D'Arcy Masius Benton & Bowles, Enron's advertising firm. "Because it made all these changes, it was considered a fluid and brilliant company. But in retrospect it did that because things weren't working, and it was time to move on."

'The Creative Ones'

In the first week of August, Skilling, who occupied an office suite on the 50th floor of Enron's Houston headquarters, dropped in on the seventh floor to deliver a pep talk. He addressed about 100 employees of Enron Energy Services, a troubled division unsettled by reorganizations and internal questions about whether it was really making any money.

Inside Enron, Skilling was accustomed to deference. But on this day, employees challenged him.

According to former Enron executive Margaret Ceconi, a worker asked: Why was Skilling selling his Enron stock? Skilling, who received about $8.7 million in salary, bonuses and incentives that year, answered that he had instructed his brokers to make periodic sales for "estate planning" and to raise money for his new $4.2 million house in opulent River Oaks.

Skilling assured the assembled employees that their division was doing great. "You are going to be a half-billion bottom-line company in the next couple of years," Ceconi recalled him saying.

Ceconi raised her hand. Exactly how would they do that?

"You guys are the creative ones," she recalled him saying. "That's what you guys are going to have to figure out."

A few hours later, Enron announced the layoff of dozens of employees in the division, including Ceconi.