0:00

In the nineteen nineties and early two

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thousand, Enron was like no corporation on

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earth. It was the ultimate success story,

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But the key to that success was

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accounting fraud. American Scandal as a

0:10

podcast from Wandering The Take you deep

0:13

into the most infamous scandals in American

0:15

history from presidential lies to environmental disasters

0:17

and corporate fraud. and the story of

0:19

Enron as one of the largest business

0:21

scandals in history when they're earning started

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to defy market forces, Analysts and journalists

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became suspicious and when the company was

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revealed to be a fraud. It

0:30

shattered the lives of thousands of employees

0:32

leaving wreckage from California to Wall Street

0:34

at the dark heart of the scam

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where Enron corrupt leaders. But they had

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help from a vast network of collaborators,

0:41

including outside legal and accounting companies that

0:43

covered for them. At the same time,

0:45

the scale of a legal manipulation of

0:47

the American financial system was unprecedented. the

0:49

sheer breadth and complexity of Enron crimes

0:51

done the world and in the aftermath,

0:53

many wondered how such massive fraud could

0:55

go undetected for so long. You're about

0:58

to hear a preview of American scandal.

1:00

While you're listening, follow American Scandal on

1:02

the Wonder Yeah or wherever you get

1:04

your podcasts. On

1:18

Tuesday, August fourteenth, Two Thousand One

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The restaurant on Smith Street and

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Houston is jam packed with the

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lunch crowd. Sharon Watkins looks around.

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She recognizes most of the faces

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of her coworkers at Enron and

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they seem oblivious. Walk ins has

1:33

seen the numbers. She knows what

1:35

they mean. Ship has hit the

1:37

iceberg. it's sinking in. There aren't

1:39

enough lifeboats. She

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pushes her played a way. Having

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lost her appetite, her friend Kathy

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looks concerned. Sharon: what are. You

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fairly touch your and and he's expecting

1:50

as back and fifteen can keep the

1:52

boss when you walk ins. Trust Catty

1:54

When a former Enron V P now

1:56

at the subsidiary L G M and

1:59

she's a friend. The. Watkins

2:01

lowers your voice and means

2:03

prostitutes? Yeah, about Andy? Since

2:06

June, he's had me reviewing assets

2:08

in a boring stuff, but he's

2:10

trying to figure out how to

2:12

get some cash flowing and within

2:14

the next couple of years. But

2:16

here's the problem. We have these

2:18

assets to hand over new pounds.

2:20

All heads with this financial entity

2:22

called Raptor to shield horses, right?

2:24

for a recent appearance. Moscow know

2:26

Raptors soil. We have several of

2:28

them. So yeah, I'm unfamiliar with

2:30

the refs. Well, recently with the

2:32

fact that they lose hundreds of

2:34

millions of dollars. A year because

2:36

I wasn't until I looked into

2:38

it. Enron Energy Services since two

2:40

guys my office. they stood at

2:43

a whiteboard and broke it down.

2:45

Turns out these raptors lose money

2:47

every day. so the keep them

2:49

afloat. Enron stuffing them with hundreds

2:51

of millions of Enron stock. Of

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share. It's a complex transaction, yes,

2:56

but no. know if those raptors

2:58

go bankrupt, he could trigger huge

3:00

losses for the Lg Amd of

3:03

his. I looked at last your

3:05

statements just once Enron actually lost

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a half billion dollars. But because

3:09

of losses are hidden in the

3:12

Raptors No one knows. Not the

3:14

stock analysts, nothing investors and she

3:16

says distinct sound share in subsidized

3:18

price first of all accounts or

3:21

three Anderson they signed off kidding.

3:23

Yeah, and even if the raptors do go

3:25

bankrupt and he does, he doesn't mean anything

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to Lcs. He structured the deal so he

3:30

can pull all with his money. Our first.

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Sharon's head spinning. It

3:36

mister step Enron L, G M, and

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the Raptors might not have anything at

3:40

risk, but Enron should does. and whoever

3:43

else antecedents things and. If

3:45

the raptors go bankrupt which they probably

3:47

will, all the money would be gone.

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But Lynn just shrugs. The. walk

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in seceded firmly in her chair she

3:55

feels like she's fallen she just told

3:57

when her friend the season two hundred

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the worst accounting fraud she's ever seen.

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And Lynn just shrugged. As

4:05

Watkins looks around, everyone's on their phone,

4:07

talking at once, all the

4:09

people from Enron. And one by one, a common

4:12

drains from their faces. Lynn

4:15

reaches for her own thing. She

4:17

recognizes the number and answers. Hello? Oh

4:21

my God, what? I wish I

4:23

were now, yeah. We're on our way.

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Lynn hangs up and swallows hard. Watkins

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leans forward. What happened? Just?

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He just resigned. Watkins stares

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back. Jeff Skilling, the

4:36

CEO of Enron, one of the

4:38

most famous corporate executives in history,

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is abruptly done with the company

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he helped build. You

4:44

must know what Watkins knows. And

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at that moment, Watkins realizes there

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can be no more rationalizations, no

4:51

more procrastination. Her company

4:54

is corrupt. Well, it's time

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for her to get out.