Power Failure: The Inside Story of the Collapse of Enron (Paperback)

by Mimi Swartz (Author), Sherron Watkins (Author) "SHERRON Watkins went to the Enron Corporation's November management conference for the year 2000 determined she wouldn't be taken for a loser..." (more)
Key Phrases: leading energy company, professional standards group, chief risk officer, Ken Lay, Jeff Skilling, Wall Street (more...)

Editorial Reviews

Amazon.com Review
Something strange happened to the Enron Corporation in the early 1990s: It went from a company that traded in tangible goods to one that dealt in pure abstractions, with shoddy accounting practices, astonishing compensation packages, and smoke and mirrors to obfuscate this new reality.

Company auditors, Sherron Watkins among them, warned top Enron execs from CEO Kenneth Lay on down that the company’s increasing reliance on cooked books and phony reports "will implode in a wave of accounting scandals." As anyone who played the stock market or watched Enron suits do the perp walk on the evening news a couple of years ago will remember, that’s exactly what happened. Texas Monthly editor Swarz and Watkins team up to offer this account, rich in anecdote and numbers alike, of what went wrong and who made it so. Though even-handed throughout, they serve up plenty of righteous scorn for the corporate leaders who enriched themselves as the company disintegrated, and for the name-brand politicians who abetted them.

Though Osama bin Laden’s pawns barely dented the U.S. economy, observes Alex Berenson in The Number, Lay and his lieutenants brought it to its knees. Swartz’s and Watkins’s eye-opening account will rekindle new indignation over unpunished crimes and well-rewarded hubris, and it ought to be required reading in business schools henceforth. --Gregory McNamee --This text refers to an out of print or unavailable edition of this title.

From Publishers Weekly
Although Watkins, the Enron executive who wrote the anonymous memo that blew the company's troubles wide open, is listed as this book's coauthor, the writing appears to be all Swartz. The Texas Monthly editor uses Watkins as an extensive source and treats her career at Enron as a major narrative thread, but her account of the energy company's financial misdealings casts a much wider net. The book offers particularly strong perspective on some of Enron's wilder escapades, like its disastrous foray into Internet broadcasting, and an unsettling body of evidence about Enron's possible manipulation of California's energy crisis. It does a stunning job of chronicling the power games within Enron. (Although he's not named as a source, it seems likely former CEO Jeff Skilling must have granted at least one interview off the record.) This version of Enron's history is as richly detailed as Robert Bryce's Pipe Dreams, but without that version's overtly moralizing tone; Swartz lets the facts speak for themselves. Watkins's input, interspersed throughout the story, offers a personal perspective on the cutthroat competition among the "hungry, restless, and tightly wound" Enron staffers, especially when she herself is at her most aggressive. The depiction of her gradual awareness that something was wrong, and her efforts to get her superiors to address the problem, helps make the financial crisis understandable on an emotional as well as an informational level, and provides an effective anchor to all the other sides of Enron Swartz includes.
Copyright 2003 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

See all Editorial Reviews

Product Details

• Paperback: 416 pages
• Publisher: Broadway Business (March 9, 2004)
• Language: English
• ISBN-10: 076791368X
• ISBN-13: 978-0767913683
• Product Dimensions: 8.1 x 5.5 x 1.1 inches
• Shipping Weight: 13.4 ounces (View shipping rates and policies)
• Average Customer Review: 4.2 out of 5 stars See all reviews (38 customer reviews)
• Amazon.com Sales Rank: #137,177 in Books (See Bestsellers in Books)

  Popular in these categories: (What's this?)

  #16 in	Books > Professional & Technical > Law > Business > Bankruptcy
  #25 in	Books > Business & Investing > Personal Finance > Bankruptcy
  #97 in	Books > Business & Investing > Industries & Professions > Oil & Energy

Customer Reviews

Most Helpful Customer Reviews

15 of 17 people found the following review helpful:

3.0 out of 5 stars Grain of salt, April 7, 2003

By A Customer

This review is from: Power Failure: The Inside Story of the Collapse of Enron (Hardcover)

I am a former Enron employee. In spite of the way the press (and Jeff Skilling's "befuddled" play-acting in the Congressional hearings) portrays it, many of the issues which brought about the firm's demise were not particularly secret. Sherron Watkins acknowledges and/or implies she was aware of many aspects ("I sure hope we make good use of the bad news about Skilling's resignation and do some house cleaning - can we write down some problem assets and unwind raptor? I've been horribly uncomfortable about some of our accounting in the past few years and with the number of 'redeployments' up, I'm concerned some disgruntled employee will tattle." - Watkins E-Mail to Rick Buy, from FERC).

What Watkins really fails to answer in her book is why she waited so long to "blow the whistle" and why there seemed to be no other "whistleblowers." While many people all over the company were aware of the off balance sheet vehicles there seemed to be a cult of denial that either they were a problem or that they showed any signs of impropriety.

In fact, some of the documents, meetings, and conversations Sherron Watkins references as well as some documents turned in for the Congressional hearings show that there were concerns with Raptor, for instance, well over a year before bankruptcy, bubbled up to the Chief Risk Officer, Chief Accounting Officer, and Chief Financial Officer. Watkins perhaps deserves credit for being the first to bring the problems to the level of CEO, but she was the last in a long series of attempts by many individuals, most of whom took greater career risks by criticizing at a time that the firm was still considered "healthy."

Watkins makes her motivations unclear, which is one of the more disturbing aspects of the book - whether she is simply another example of an "Enron-cultured" individual who seizes upon opportunities rather than embracing the spirit of the touted Enron "core values" - Respect, Integrity, Communication, and Excellence.

11 of 12 people found the following review helpful:

5.0 out of 5 stars Power Failure: Successful book, March 28, 2003

By A Customer

This review is from: Power Failure: The Inside Story of the Collapse of Enron (Hardcover)

I loved this book. I tried diligently to follow this story as it unfolded in real time in the newspapers. As someone not in the finance industry, I knew it was important but found it near-nigh impossible to understand what had gone wrong and how. In this book, Mimi Swartz provides an insider's look (thanks to Sherron Watkins and many other Enron folk) while still maintaining equipoise. The complex financial instruments that were at the heart of this disaster are explained simply and elegantly. I also learned that, like the Milken/junk bond fiasco, the Enron disaster started with fundamentally important business innovation that is likely to remain with us. Bottom line: I couldn't put it down.

10 of 11 people found the following review helpful:

5.0 out of 5 stars A whistle-blower tells the fascinating story of Enron, April 19, 2003

By	Bookreporter.com (New York, New York) - See all my reviews

This review is from: Power Failure: The Inside Story of the Collapse of Enron (Hardcover)

Imagine the life of Sherron Watkins: a posh job with one of the most successful energy companies in the world, all of the amenities that come with wining-and-dining important contacts while negotiating deals worth millions --- and a nagging suspicion that something within the company you're working for isn't quite right. There were thousands of Enron employees, all with the same upward mobility and satisfying salaries that Sherron Watkins possessed. So what set Watkins apart from them? It was the fact that she was willing to risk sacrificing it all to expose the corrupt practices that had made Enron so profitable.

In POWER FAILURE, the entire history of Enron is explored, from its inception in 1985 to its demise in 2001. Written by Mimi Swartz with assistance from whistle-blower Sherron Watkins, this book will take the reader on a journey that includes Enron's earliest successes and failures, the super-charged management conferences, the politically incorrect Enron trading floors and the Senate Hearing Room's investigation and subsequent trial.

But POWER FAILURE is much more than just an expose on a corrupt corporation. It also provides a frightening view on what the big-business atmosphere has become. The story of Enron shows how delicate the balance of politics, money and business practices is, and how thin the line between legal and illegal can be.

Swartz and Watkins effectively tell the story of Enron without a hint of tabloid exploitation. And with all the exploitations that occurred within Enron, that's nothing short of a miracle. They give an accurate, honest perspective on all of the events that took place in the history of the corporation and portray the characters of Enron without bias. That's not to say that there's no negative statements made about people throughout the book --- just that they're given in a diplomatic manner. The book is written in an informative yet entertaining manner, complete with entertaining sidebars and humorous anecdotes to keep the reader's attention. And they have included plenty of pictures to point out just who the evildoers are. This is a must read for business people, tax evaders, anyone who plans to cheat the system, or the average Joe who wants to know what really happened at Enron.

--- Reviewed by Melissa Brown