It wasn’t just that working at Enron was hectic, or demanding, or urgent. What made working at Enron different was that it was intoxicating. It took otherwise unglamorous work — scheduling natural-gas pipelines, developing electricity pricing models, managing a fiber-optic network — and gave it a powerful sense of mission.
Phyllis Anzalone was the first person Enron dispatched to California in 1996 to sell electricity as a retail commodity. The opportunity, she says, “lit me on fire. It was like a drug.”
Helena Payne worked for 24 years at Enron and its predecessor, Houston Natural Gas. She liked the company so much that she recruited her daughter Rebekah Rushing to work there. Rushing, an administrative assistant, adopted the work ethic of an executive. Last summer, she took her laptop on her family vacation to Lake Tahoe, and she worked three of the five days she was there.
Charles Weiss left a 19-year career at Sprint to join Enron in March 2001 — for a job that lasted just 9 months. “The risk,” Weiss says, “was not going to Enron and not having the chance to fulfill my aspirations.”
Steve Kromer worked for 10 years to become an energy-conservation expert before he joined Enron. “For an energy-efficiency nut,” says Kromer, “Enron was nirvana.”
But even as Enron inspired these employees, there were things about the company that didn’t add up.
Helena Payne reviewed and reimbursed Enron corporate expense accounts. For years, she and her fellow “accounting ladies” found themselves authorizing reimbursement for employees who they were sure had paid for prostitutes.
And Steve Kromer always had the sense that for his boss’s bosses, “If the idea was great enough, it didn’t matter whether you ever actually did it. It was more like, ‘Let’s book $3 trillion in revenue and move on.’ “
During Enron’s unraveling, the largest corporate bankruptcy in U.S. history, most attention has been focused on two places: the deception, greed, and malfeasance at the top and the financial victims at the bottom.
But life at Enron, as at most companies, was lived in the middle. Not too far from the top, not too far from the bottom, a battalion of familiar white-collar employees worked every day, their lives consumed, brightened, then betrayed by Enron.
What follows are snapshots of the worlds of five ex-Enroners, people who can explain, How did the company inspire such passion? People willing to answer the question, Were there any hints of the problems that brought Enron down? And people who can help us answer the single most important question of all: What would you have done if you had worked at Enron?
Phyllis Anzalone: The True Believer
How badly did Phyllis Anzalone want to work for Enron? In January 1996, at the start of energy deregulation, she interviewed with two Enron executives and issued an ultimatum: “I said, ‘You can either hire me or compete against me.’ “
What did working at Enron do for Anzalone? For one thing, it made her a lot of money, so much that the company’s failure cost her about $1 million. More important, it made her. It took her from being a reasonably successful facilities-management salesperson from rural Louisiana and propelled her into the ranks of sales superstars. It changed her view of herself; it confirmed what she thought she could achieve. “Enron had a profound effect on my life,” she says. “As devastating as it was, I’m glad I did it. It was like being on steroids every day.”
And what does Anzalone think of the executives who ran Enron — and then ran it into the ground? “They are scum,” she says. “They are crooks, and they are traitors. They betrayed many people’s trust, including mine. Jeff Skilling is lying. Every single employee at Enron knows he’s lying.”
All of which makes Anzalone a true believer. “Working for Enron was a commitment,” she says. “I worked my ass off.”
Four months after Enron hired her, Anzalone went to San Francisco to crack California’s retail-electricity market. She was an “originator” — she “originated,” or sold, energy-supply contracts. “I concentrated on Silicon Valley and health care. Those were critical operating environments that used a lot of energy,” Anzalone says. “My goal was to show businesses how they could improve on the ‘do nothing’ position. That was our biggest competitor — companies who decided to do nothing, to just keep getting electricity from the utility.”
Eventually, she had Applied Materials, Sutter Health, and all of Kaiser Permanente’s sprawling California facilities among her customers. “It was a brand-new industry doing things that had never been done before. It was the most fun I’ve ever had.”
Anzalone was offering customers a seemingly simple proposition: a fixed rate for electricity, going out two, five, even six years, priced 5% below regulated rates. In fact, the sales were extremely complex. The price was based on consumption in 15-minute increments. The contracts were 3 inches thick. “No one understood those contracts,” says Anzalone, “not even me.”
Enron Energy Services (EES), Anzalone says, “was an entrepreneurial culture. If you met your goals, you could double your salary. I was always doubling my goals — or more. In the first five months of 2001, I quadrupled my goals.” In 2000 and 2001, she earned an annual salary well into six figures.
That was the part of Enron that Anzalone thrived on. Then there was the part of Enron that she shunned: the culture of Enron’s Houston headquarters. She disliked it so much that she managed to avoid being stationed there for four of her five years at the company. “I wanted to produce and be left alone,” she says. “I didn’t like the politics of Houston.”
The problem was that Anzalone didn’t fit the Enron pedigree. Much of her appeal is her high-energy, up-by-the-bootstraps hustle. Much of Enron’s cachet was built on its ability to attract the polished graduates of the nation’s leading business schools. “The arrogance of the leadership always offended me,” she says. “I always had a great boss at EES. But I always said, ‘I like the people I work with. I hate the people I work for.’ “
Nor was Anzalone comfortable with Enron’s free-spending ways, even when she benefited from them. “The company never did pay much attention to expenses, and it always bothered me,” she says. In April 2001, EES sent its top 75 performers and their spouses to the Four Seasons Resort Nevis, in the West Indies, for four all-expenses-paid days. “The last day we were there,” says Anzalone, “they flew in the Fabulous Thunderbirds for two hours of dancing. They flew the band to Nevis.” The trip cost $1.2 million — $16,000 a couple.
More than anything, because she believed so deeply in Enron, Anzalone feels deeply betrayed. “Emotionally,” she says, “I’ll feel a sense of loss for a long time. I’m incredibly disappointed in senior management. They lied to the shareholders, they lied to the employees, and they lied to the people at Enron who were making things happen.” She pauses. “You know, if you were at Enron, you loved it.”
Helena Payne: The Good Soldier
Rebekah Rushing: The Good Assistant
Helena Payne is a small woman, reserved and watchful, the kind of woman who seems to know more than she feels the need to say. What she says about Enron and its predecessor, Houston Natural Gas, comes from working there for 24 years. “The backbone of Enron was the good people,” Payne says, “not the people you’re hearing about in the news.” Because of the damage Enron’s bankruptcy has done to her retirement savings, her husband will probably have to keep working. “I feel hurt,” she says, “but I don’t feel hate. Anger doesn’t do anything but give you bad health.”
Payne spent her career in accounts payable, much of that time reviewing employee expense accounts. “I really liked doing the expense reports,” she says. “I met really nice people from all over the company. And I got to do the traveling they did without leaving my desk.”
Payne handled expenses for the whole company, from front-line workers to high-level executives. It was a quiet, revealing vantage from which to observe Enron’s way of doing business. What Payne saw was a cascade of extravagances. “Mostly it was entertainment,” she says. “Lots of entertainment. They’d take hundreds of people to a concert. We always thought, That’s a lot more money than should be spent on company business.”
And then there were the expenses from strip clubs. The “accounting ladies,” says Payne, “kept questioning some of the places we were getting charges for, striptease places. We knew they were prostitution-type places. We paid for prostitutes. The money those people were being reimbursed for, it was a whole lot more than dinner and a couple of drinks. Thousands of dollars. They explained that this was their procedure to entertain their customers, to get more business for the company. That’s the way they put it to us.”
After complaining for years, the accounting clerks were eventually given a list of adult-entertainment venues that they weren’t supposed to reimburse for. “They started telling us, Things have changed, ” says Payne. “They gave us a list of names that we weren’t supposed to pay for. When you see those places, they said, a red light should go off in your head.”
When Enron collapsed, Payne lost nearly 80% of her six-figure 401(k) account. But her own personal accounting of her time with Enron is more accepting than resentful. “I had faith in the company,” Payne says. “I had faith in Ken Lay. You can’t lose faith in people because of a bad apple. If I had the choice to do it again, I would still do the same thing.”
Rebekah Rushing, like her mother, looks back on her time at Enron with few regrets. “I wish I still worked there,” she says. “Everybody was Go, go, go. You gave 110%.” Rushing had a whirlwind seven-and-a-half-year career at Enron, during which she had five jobs. “Not a lot of places would give you the kind of opportunities Enron did without a four-year degree,” she says. “I loved it.”
By the end of her Enron career, Rushing had advanced to a high-level assistant position, with four assistants reporting to her. She’d get to the office around 5 AM, go to the gym for a morning workout, be at her desk by 6:45, and often stay at work until 7 PM. Last year she earned $80,000, including overtime. “If you were a good assistant at Enron,” Rushing says, “you were your boss’s right hand, and he relied on you. You were the quiet partner behind the scenes who got everything done.” Of the senior people who have become newspaper headlines since Enron’s bankruptcy, Rushing says, “I knew them all. Or, at least, I knew their assistants.”
As is often the case in business, the assistants had their own network. And as is always the case with good assistants, they knew what they could — and could not — discuss. Rushing worked out with Andrew Fastow’s assistant every morning at the Enron gym. “We were both single moms with teenage kids,” Rushing says. “We talked about that. She was a breast-cancer survivor. We talked about that too.” One thing that they didn’t talk about was their bosses. “You understand why people can’t talk about things,” she says. “At my boss’s level, there were things going on that I knew about but did not talk about. Reorganizations, restructurings. If you did talk, you didn’t last very long in that kind of position.”
Rushing saw some of the signs of Enron’s collapse last December. “When FedEx wouldn’t let us ship using the Enron account number, when they wanted a credit card, that was a bad sign,” she says. “I’m thinking, a Fortune 500 company where you can’t use the FedEx number? Hmmm …” Rushing is an optimist by nature, but she’s also nobody’s fool: She started her own job search weeks before Enron filed for bankruptcy, and she landed at Avalon Energy LLC in Houston.
But she’s still using her organizational skills to stay connected to her former Enron colleagues. Just 10 days after being laid off, Rushing and two friends set up a fund at Humble Community Bank to help other ex-Enroners. She deposited $90 of her own money to get the account started. By January 18, when the Associated Press wrote a story about the fund, it had $170. The day the AP story ran, Rushing got a phone call from the bank president saying a check for $68,000 had arrived.
“I thought she was teasing me,” Rushing says. “I made her fax me a copy of the check. I was in tears. I couldn’t believe it.” Washington politicians, seeking to cleanse their political campaigns of Enron contributions, had decided to “return” them to Enron’s fired employees — through Rushing’s fund. That first check for $68,000 came from New York senator Charles Schumer’s campaign. Since then, nearly $290,000 has arrived. And while celebrities like Jesse Jackson and elected officials like Congresswoman Sheila Jackson Lee have talked about helping former Enron workers, Rushing and her two friends have actually done it: Their fund has paid out $280,000 to 230 ex-Enroners, paying mortgages and utility bills directly and providing “cash cards” they can use at local grocery stores.
Rushing has little thought for those who brought Enron down. “I don’t like watching those guys testify on TV,” she says. “I have more important things to do with my time. What goes around comes around. I don’t wish bad on anybody. But whatever is supposed to happen to those men will happen.”
Charles Weiss: The Short Timer
Charles Weiss is a torn man.
He knows that he had no choice but to leave Sprint for Enron. It was the right job, at the right moment, at the right place.
And he knows that if he had somehow resisted Enron and stayed at Sprint, he would still have a job. The guy they hired to replace him — two guys, actually — are both still working. Charles Weiss, meanwhile, is jobless in the worst telecom downturn in his 30 years in the business. “I beat myself up all the time,” he says. “Then I look back, and I did what I did for all the right reasons. Who could have foreseen?”
Charles Weiss is a big man, with big hands that have seen plenty of outdoor work. His last job at Sprint had him driving around Houston in a truck, keeping Sprint’s advanced fiber network and its supporting equipment operating. At 48, after 19 years with Sprint, Weiss figured he had about 15 years of work left, and he was ready to move up. But Sprint was headquartered near Kansas City, Kansas. Enron, headquartered in Houston, had just put its own 18,000-mile broadband fiber-optic network in the ground. The company wanted Weiss to be its network-capacity manager, running the equipment he already knew, but from behind a computer screen. Enron offered more money, bonuses, and stock options. Joining Enron Broadband Services (EBS) seemed like the smart move.
So in March 2001, Weiss took the leap.
His first discovery was that EBS didn’t have many customers. “If you consider the capacity of the equipment they had installed,” says Weiss, “they were using less than 10%. If you consider the capacity of the fiber in the ground, they were using less than 1%.”
Enron had based its entire strategy on being “asset light.” And here it was sitting on a very real, brand-new, $1.2 billion fiber network that was 99% dark, 99% unproductive. What to do with an expensive, fast-depreciating hard asset that can’t generate revenue? Turn it into a financial asset. Or, at least, try.
Weiss got swept into the world of commodities trading. He spent a lot of time supporting the broadband trading desk. “My job was to make sure that we could actually provide the capacity and equipment that we were promising,” says Weiss.
The problem was that Enron’s way of doing business didn’t add up. “They would sometimes trade part of their network for capacity on someone else’s lines between, say, New York and Washington, DC,” says Weiss. “Normally, you only do that if you have a customer. But they didn’t have any customers. They never planned to use that capacity between New York and DC to send signals — they were just doing it to make the books look better. Did I think it was odd? Yes and no. It was odd. But it could be an effective way of doing business if the equipment is just sitting there anyway. The problem is, they did the deal just to do the deal. Not because it made real business sense.”
Weiss was an Enron short timer. But in just nine months, he had a complete, compressed Enron career. He worked for five different bosses. He put in 12- and 14-hour days. He “found” and accounted for about $40 million in network equipment that the company seemed not to know that it owned. And then he was abruptly let go.
Which explains why Charles Weiss is a torn man. When he looks back, he concludes that the real risk would have been to stay at his job at Sprint. “The risk was not going to Enron and not having the chance to fulfill my aspirations,” he says.
But sometimes, when he lets himself, Weiss thinks about the people who ran Enron, and then he gets angry. “They make me sick,” he says. “They deceived everybody.” Weiss remembers a day last May when then-CEO Jeffrey Skilling came down to the Enron tower’s 44th floor, where broadband was based, to talk to employees. “He told us that the broadband division by itself was worth $50 a share in stockholder value,” says Weiss.
Steve Kromer: The Convert
When Steve Kromer, now 42, went to work at Enron in early 2000, he had to buy all new clothes. The shorts and T-shirts that had suited him for 10 years as an energy-conservation expert at Lawrence Berkeley National Laboratory weren’t going to cut it at Enron.
“I pulled back to, like, the school pictures of me when I was 5 years old, when my mother used to dress me up,” says Kromer, laughing. “Classic, fit-in kind of clothes.” Enron, he knew, was a place “where you can’t afford to be a wild-ass hippie.”
But for Kromer, the new clothes were a disguise. With almost 20 years invested in energy-conservation work in nonprofits and research labs, Kromer went to Enron with his own agenda. He wanted to use the energy, creativity, and drive of Enron to transform energy conservation from a feel-good proposition to a financially compelling business. “Conservation wouldn’t be greener-than-thou, and it wouldn’t be holier-than-thou,” says Kromer. “It would just be good, clean solutions.”
But a funny thing happened to Steve Kromer along the way. More than his clothes changed. The guy who loves the cool, clean air of Berkeley, California discovered a new part of himself in Enron’s 50-story silver tower cutting into Houston’s muggy haze. “Before I went to Enron, business had a bad connotation, really,” says Kromer. “That’s still the old hippie in me. But I discovered that good business is as exciting as good science.”
Although energy conservation might seem an odd business for the world’s largest energy conglomerate, the group Kromer joined was classic Enron. The idea was for conservation to become a full partner in the energy market, alongside the generation and buying of power. For Enron, where everything was fungible, conservation made financial sense: The company could help its customers save energy, then resell those savings to someone else. For customers, the deal was this: Enron would assess how much energy could be saved over, say, 10 years, and what equipment retrofits were necessary, then pay customers part of the savings up front, as well as a fee to grant Enron the right to do the conservation project. Enron and the customer would split any additional savings. And, once the conservation projects were done, Enron would, of course, bundle the contracts for resale to investors.
What was so great about Enron’s approach, says Kromer, was that the company “didn’t give a shit about energy efficiency. It was just about the money to them.”
Kromer’s expertise — evaluating and measuring how much energy was being saved in a particular setting — fit Enron quite well. He took classes at Enron in financial derivatives. He taught his field engineers to think about risk assessment and probabilities. He learned to speak Enron’s language of marginal rates, proper incentivization, and commodity price curves. He began to think about conservation and engineering in a whole new light. “With conservation, you have to become risk managers, not just engineers,” Kromer says. “That’s what Enron was all about — risk-adjusted engineering.”
The greatest challenge was the competition within Enron. “The internal politics were real cutthroat,” says Kromer. “You had to fight for what you believed in, so you’d fight, you’d get beat up, you’d get depressed. And then the next day you would win — and you’d be on top of the world again.”
Kromer sometimes felt naive about business. But when his bosses at Enron used phrases like “earnings management,” it made him uncomfortable. “I thought, If everybody gets this, well, that’s obviously the ‘adult’ way of doing business,” Kromer says. “But I always had the sense that if the idea was great enough, it didn’t matter whether you ever actually did it. There wasn’t a lot of patience at Enron for the time it would take to get those applications in the ground. It was more like, ‘Let’s book $3 trillion in revenue and move on.’ “
In the end, Kromer says, the energy asset-management group “saved something like the total energy consumption of Rhode Island. Well, maybe not quite that much.” And it produced for Kromer not just a new way of thinking about conservation, but a new way of thinking about himself. “I came out a whole different person,” he says. “I was crazy to begin with, but now I’ve seen a whole new world of possibilities.”
The vision of conservation as a full partner in the world of energy is something Kromer is trying to take beyond Enron. He hopes that that creative part of the Enron legacy isn’t totally lost in the anger over the scandal. “Enron was a passionate place. I hope people remember it for what it could have been too.”
Charles Fishman (email@example.com), a Fast Company senior editor, wrote most recently about Biogen.