The Women of Enron : Corporate Cassandra

Margaret Ceconi grew up believing that if you do bad things, you’ll burn in hell.

For someone who spent just eight months inside the ring at Enron, Margaret Ceconi landed some heavy punches. Though she’s less famous than her fellow watchdog Sherron Watkins, Ceconi was the only one to go outside the company with her concerns, alerting the SEC to possible accounting fraud in 2001. That effort didn’t accomplish much. The SEC returned her phone call but took no action.


In some ways, Ceconi is a natural watchdog. The 12 long years that she spent at Our Lady of Victories, a Catholic school in Pascagoula, Mississippi, gave her a strict moral structure, she says. “It was based on fear, that if we did bad things, we’d get caught and . . . burn in hell!” she says. “But I’ll tell you, it made us think about things with the end in mind. The problem with Enron was that no one was afraid of getting punished, even if they ever got caught.”

And Ceconi spent much of her career prior to Enron making sure wrongdoers did get caught. As a commercial credit auditor, her job was to detect fraud in receivables accounting. Ceconi was in her fifth year at GE Capital in Dallas when Enron came calling in January 2001, offering $400,000 in annual compensation — before a cut of the action. Her new job: selling Enron’s now-reviled 10-year “bundled” energy contracts for Enron Energy Services (EES).

Ceconi negotiated just one such contract in her tenure, but it was a whopper: a $700 million power deal with a large industrial company in the Midwest. Based on EES’s initial projections, she would have made $1.5 million on that contract alone. But sometime in May, the profit projection for the contract dwindled from $15 million to just $2 million. Ceconi would get next to nothing. And that’s what spurred her to look into EES’s accounting. “I was compensated on the profits. I had to know how we made our money,” she says, unapologetic that her initial motives were mercenary rather then moral.

Ceconi says she uncovered a fraud: $800 million worth of money-losing trades on bundled energy contracts that belonged to EES but had been accounted for on the books of Enron North America. But soon after she placed a call to the SEC, she was laid off along with several hundred of her colleagues that August.

Later that month, both Ceconi and Watkins drafted their respective whistle-blower memorandums. But while Watkins kept her message inside the chain of command, Ceconi delivered her memo to human resources with a request that it be disseminated to Enron’s board of directors. It never was. As the Enron saga unfolded throughout the fall, Ceconi became increasingly distressed at the lack of response to her memo. She began corresponding with Prudential Securities analyst Carol Coale under the email identity “enrontruth.” (Coale was one of the first analysts to downgrade Enron shares in 2001.) By December 2001, Ceconi had been recruited to join a Houston-based accounting firm. When Enron filed for Chapter 11 on December 3, she decided that she needed to do more.

“I went to my interior decorator,” she says, sipping a glass of Pinot Grigio. Turns out that her decorator, Pamela O’Brien, is married to Obie O’Brien, a lobbyist who, in turn, works for Raymond Plank, the chief executive of Houston-based Apache Corp. Ceconi knew Plank had political ties in Washington. She gave a copy of her memo to her decorator. Within days, it had reached the halls of Congress and had been published on the Internet. On January 29, Cicone appeared on Good Morning America to talk about her memo and about Enron’s collapse.


Unfortunately, Cicone’s whistle-blowing seems to have caused more damage to her than to Enron’s wrongdoers. (Her memo may have gotten little response, says Watkins, because it was seen as “emotional.”) She’s lost friends over it, she says, sounding the first note of regret in a nearly three-hour retelling of her ordeal. The conservative accounting firm that she had joined didn’t appreciate the publicity either. Ceconi left after just a few months. And unlike Watkins, Ceconi hasn’t converted her role as watchdog into a revenue stream. “No one has offered me a book contract, and I haven’t asked for one,” she says.

Not that she hasn’t enjoyed some of the attention. Last July, Ceconi attended a party for a group of ex-Enron women who uncovered “their hidden assets” for Playboy’s “Women of Enron” cover feature. (Ceconi did not pose.) The party was hosted by Houston plastic surgeon Franklin Rose, and attendees received free collagen and botox treatments along with the champagne. Not surprisingly, the event attracted plenty of media coverage, and Ceconi’s image was again broadcast nationwide, this time in more colorful company.

“What can I say?” she offers, lifting a waft of blond bangs from her forehead. “I’m 43. I wanted the $800 of free botox.”

Nor did it take Ceconi long to recover professionally. In September 2002, she took a job selling accounting services at BDO Seidman. It’s not as much fun as Enron, and, at somewhat more than $100,000 a year, it’s a lot less lucrative. But it’s enough to keep Ceconi in the sprawling ranch home that she owns in Bellaire, an upscale suburb of Houston. She still entertains there, by the pool and patio in her backyard, though she just as often orders in pizza and dines at home with her roommate.

Given the chance, Ceconi says she’d do it all over again. But this time, she’d try to be a little more graceful. She’d have handled the media more carefully, she says — and she probably should have skipped the botox party. “I did the right thing about Enron, and I got punished for it,” she says. “I wasn’t very politically attuned before. I’m getting better, slowly.”

And looking back, why does she think that so many people did so many bad things at Enron? “I don’t know,” she says. “Maybe it’s like they told us in Catholic school: People would rather beg for forgiveness than ask for permission first.”