24 Days Author Tells What It Was Like To Break The Story Of The Century
By Carole Winkler (RA), Associate News Editor
Issue date: 4/12/04 Section: News
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"When we were first doing the stories, Enron was one of the most prominent, successful corporations in America, said Emshwiller. "Enron happened so fast that they hardly had time to complain."
Emshwiller first began looking through the company's filings when Jeff Skilling suddenly resigned as CEO in early August. The story was a difficult one to tackle, according to Emshwiller. "It is a daunting task - [you really require] two or three hours to read the Enron 10k and I was doing two or three minute 'quickies'." (Quickies are shortcuts taught in journalism school, such as skipping to board interlocks and related party transactions.)
Reading the reports, Emshwiller came across some of Enron's partnerships that were run by Jeff Skilling, and "it seemed very suspicious that a CEO would operate these partnerships." For almost two years, other reporters, including Bethany McLean at Fortune, had also seen them "but nobody could quite figure it out."
One of the techniques the reporters used to troll for information was to put a confusing information tidbit into the "Heard on the Street" column to see if readers recognized it. "Most times it doesn't lead to much, [but] this time it did lead tp a discovery in the way people only dream about," said Emshwiller.
An anonymous source, whom Emshwiller still refuses to identify, called him at the Wall Street Journal about the information and faxed over confidential documents on the off-balance sheet entities. This information, which Emshwiller couldn't have obtained any other way, was what eventually provided the means to get the rest of the pieces of the puzzle that finally broke the story.
Although its top financial executives set the stage for the Enron debacle over several years of illegal activities, the company didn't publicly stumble until October 16, 2001 when they tried and failed to explain a $1 billion write-off during a conference call with analysts and journalists. Ken Lay and Rebecca Smith, who had known each other for years, ended up sparring verbally when Lay could not name the entity that was responsible for much of the loss. Lay finally had the last word when he accused her of being "sneaky." After that the company came undone with astonishing speed.