Rated R             1  hr.    50 min.          2005

From insider trading, beginning in the 1980s, to the rolling blackouts of 2001, document shredding, bankruptcy and criminal investigations, Enron’s history has been marked by skilled players and corporate greed. 

Trace the rise and fall of Enron with this timeline highlighting the key players and events that led to its collapse, as well as the trials and surprises that followed. 

1980s 

July 1985
Houston Natural Gas merges with InterNorth, a natural gas company based in Omaha, Nebraska, to form the modern-day Enron, an interstate and intrastate natural gas pipeline company with 37,500 miles of pipe. 

January 1987
Enron discovers that oil traders in their Valhalla, New York office have been diverting company funds to their personal accounts. 

April 1987
The board—including founder and CEO Kenneth Lay—learns that Louis Borget and Tom Mastroeni, the men in charge of the Valhalla operation, were gambling beyond their limits, destroying trading reports, keeping two sets of books and manipulating accounting in order to give the appearance that Valhalla was earning steady profits. The board does not fire the Valhalla executives because Lay makes it clear that they are making too much money to let them go. Lay increases the trading limits of the Valhalla traders. 

October 1987
Borget and Mastroeni end up on the wrong side of a massive trade, threatening to bankrupt the company. Enron executive Mike Muckleroy manages to bluff the market and reduce the loss from one billion dollars to 140 million dollars, thus saving the company. 

October 1987
Ken Lay professes shock at the actions of the traders. They are fired. Three years later, Borget and Mastroeni plead guilty to a number of felonies. Borget spends one year in jail; Mastroeni receives a suspended sentence. 

October 19, 1987
Black Monday. The Dow Jones industrial plummets 508 points, dropping 20.4 percent. It’s the greatest single-day loss in Wall Street history. 

1989
Enron begins trading natural gas commodities. The company will become the largest natural gas merchant in North America and the United Kingdom. 

1990s 

June 1990
Jeff Skilling, who has been a consultant for McKinsey & Co., joins Enron. 

June 11, 1991
Enron asks the Security Exchange Commission (SEC) to approve mark-to-market accounting. 

Jan. 30, 1992
SEC approves mark-to-market accounting for Enron. 

1993
Enron and the government of the state of Maharashtra, India sign a formal agreement to build a massive power plant leading to the formation of the Dabhol Power Company, a joint venture of Enron, General Electric and Bechtel. The cost for construction will soar to 2.8 billion dollars. 

January 8, 1996
Enron and the government of Maharashtra reach a new agreement that would shift some of the construction costs and lower the electricity tariffs. 

November 1996
Richard Kinder, COO of Enron, doesn’t get CEO job, so he leaves. 

December 10, 1996
Enron announces that Jeff Skilling is taking over as COO. 

July 1997 
Enron executive Rebecca Mark tries to sell 50 percent of Enron International to Shell. But the deal doesn’t get done. She blames Cliff Baxter and Skilling for botching the negotiations. 

May 24, 1999
Tim Belden, head of Enron’s West Coast Trading Desk in Portland Oregon, conducts his first experiment to exploit the new rules of California’s deregulated energy market. Known as the Silverpeak Incident, Belden creates congestion on power lines which causes electricity prices to rise and at a cost to California of $7 million. This will be the first of many “games” that Belden and his operation play to exploit “opportunities” in the California market. 

June 28, 1999
Enron’s Board of Directors exempts CFO Andy Fastow from the company’s code of ethics so that he can run a private equity fund—LJM1—that will raise money for and do deals with Enron. The LJM Funds become one of the key tools for Enron to manage its balance sheet and make investors think that it is performing better than it is. 

September 16, 1999 
Enron’s CFO Andy Fastow addresses Merrill Lynch, asking the team of investment bankers to find investors for his LJM2 Fund. He assures them: “If there’s a conflict between Enron and LJM, I will favor LJM.” 

October 12, 1999
Enron board exempts Fastow from Enron’s code of ethics so that he can raise money for LJM2. 

October 13, 1999
Merrill Lynch releases placement memo for LJM2. 

2000 

January 19-20, 2000
Annual Analysts Meeting. First day: Skilling proclaims, “EES (Enron Energy Services) is just rockin’ and rollin.’” Second Day: Enron rolls out its broadband plan. Scott McNealy of Sun Microsystems shows up to offer his support. By end of day, stock rises 26 percent to a new high of 67.25 dollars. 

April 2000
Conference call with stock analysts. Skilling: “…we have been swamped with new opportunities…” 

May 5, 2000
Enron trader, in an email to colleagues, announces “Death Star,” a new strategy to game the California market. 

May 12, 2000
Timothy Belden (chief trader for Enron's West Coast power desk) sends email to Enron headquarters in Houston confirming his strategy is working. “So far so good… pricing keeps going up.” Belden has made a massive bet that California energy prices will increase. His e-mail confirms that prices are rising. 

May 22, 2000
CA ISO (Independent System Operator), the organization in charge of California’s electricity supply and demand, declares a Stage One Emergency, warning of low power reserves. 

June 12, 2000
Skilling makes joke at Las Vegas conference, comparing California to the Titanic. 

July 2000
Enron announces that its Broadband unit (EBS) has joined forces with Blockbuster to supply video-on-demand. 

August 23, 2000
Stock hits all-time high of 90 dollars. Market valuation of 70 billion dollars. FERC (the Federal Energy Regulatory Commission) orders an investigation into strategies designed to drive electricity prices up in California. 

Sept. 20, 2000
Journalist Jonathan Weil writes piece about mark-to-market and energy companies. Investment analyst James Chanos reads this in the Texas Journal, a regional supplement to the Wall Street Journal. 

October 3, 2000
Enron attorney Richard Sanders travels to Portland to discuss Timothy Belden’s strategies. 

November 1, 2000
FERC (Federal Energy Regulatory Commission) investigation exonerates Enron from any wrongdoing in California. 

December 6, 2000
Attornies Christian Yoder and Stephen Hall write internal memo detailing Belden’s strategies. 

December 13, 2000
Enron announces that President and COO Jeffrey Skilling will take over as chief executive in February. Kenneth Lay will remain as chairman. 

Late 2000
Enron uses “aggressive” accounting to declare 53 million dollars in earnings for broadband on a collapsing deal that hadn’t earned a penny in profit. 

2001 

January 2001
Belden’s West Coast power desk has its most profitable month ever: 254 million dollars in gross profits. 

January 17, 2001
Rolling blackouts in Northern California. 

January 22, 2001
Quarterly analyst conference call. Skilling reports: “outstanding…fantastic…tremendous…” 

January 25, 2001
Analyst conference in Houston, Texas. Skilling bullish on the company. Analysts are all convinced. Enron’s CEO of Broadband Services, Ken Rice, increases his estimates for value of broadband. 

February 2001
Tom White resigns from EES (Enron Energy Services, the retail division he headed since 1998) and becomes secretary of the Army. He cashes out with 14 million dollars . 

Over the past year, Ken Rice cashed in 53 million dollars in shares and options. 

February 5-14, 2001
Senior partners from Arthur Anderson, Enron’s accounting firm, meet to discuss whether to retain Enron as a client. They call use of mark-to-market accounting “intelligent gambling.” 

February 14, 2001
Writer Bethany McLean interviews Skilling for Fortune magazine. 

February 15, 2001
Mark Palmer, head of publicity for Enron, and Enron CFO Andrew Fastow go to Fortune to answer questions. Fastow to Bethany McLean: “I don’t care what you say about the company. Just don’t make me look bad.” 

February 19, 2001
Fortune article by Bethany McLean is published: “Is Enron Overpriced?” 

February 21, 2001
Employee meeting. Skilling says: “Yes, it is a black box. But it is a black box that’s growing the wholesale business by about 50 percent in volume and profitability. That’s a good black box.” Skilling announces Enron’s goal: “The World’s Leading Company.” 

March 2001
Enron transfers large portions of EES business into wholesale to hide EES losses. 

Arthur Andersen takes auditor Carl Bass off the Enron account after Bass questions Enron’s accounting practices. 

March 23, 2001
Enron schedules unusual analyst conference call to boost stock. It works. 

April 17, 2001
Quarterly Conference Call. In the call, now legendary on Wall Street, an analyst questioned Skilling on the company’s progress. Skilling dismissed him as an "asshole." 

June 21, 2001
Skilling hit in face with blueberry tofu cream pie by a protester while speaking at the Commonwealth Club in San Francisco. 

June 2001
FERC finally institutes price caps across the western states. The California energy crisis ends. 

July 12, 2001
Quarterly Conference Call. Skilling still bullish. 

July 13, 2001
Skilling announces desire to resign to Lay. Lay asks Skilling to take the weekend and think it over. According to Lay, he tried to talk Skilling out of resigning. Skilling says Lay didn’t seem to care about his announcement and that he offered to stay on for six more months with Enron. Lay claims Skilling wanted an immediate out. 

July 24-25, 2001
Skilling meets with analysts and investors in New York. “We will hit those numbers. We will beat those numbers.” 

August 3, 2001
Skilling makes a bullish speech on EES. That afternoon, he lays off 300 employees. 

August 11, 2001
Skilling talks to Mark Palmer about preparing press release for resignation. 

August 13, 2001
Board meeting. Rick Buy outlines disaster scenario if Enron’s stock starts to fall. All SPEs (special purpose entities created to isolate financial risk) crash. Skilling dismisses this. That evening, in board-only session, Skilling, in tears, resigns. 

August 14, 2001
Skilling’s resignation announcement. In evening, analyst and investor conference call. Skilling: “The company is in great shape…” Lay: “Company is in the strongest shape that it’s ever been in.” Lay is named CEO. 

August 15, 2001
Short sell investor Jim Chanos thinks the stock is going through the floor and bets aggressively on that. Chanos notes that Skilling’s departure coincided with release of second quarter 10-Q, when Enron’s cash flow was a negative 1.3 billion dollars for the first six months. 

September 2001
Skilling sells 15.5 million dollars of stock, bringing the total of his sold shares, since May 2000, to over 70 million dollars. 

September 26, 2001
Employee meeting. Lay tells employees Enron stock is an “incredible bargain,” and that, “third quarter is looking great.” 

October 16, 2001
Enron reports a 638-million-dollar third quarter loss and declares a 1.01-billion-dollar non-recurring charge against its balance sheet, partly related to “structured finance” operations run by Chief Financial Officer Andrew Fastow. In the analyst conference call that day, Lay also announces a 1.2-billion-dollar cut in shareholder equity. 

October 17, 2001
Wall Street Journal article, written by John Emshwiller and Rebecca Smith, appears. The article reveals, for the first time, the details of Fastow’s partnerships and shows the precarious nature of Enron’s business. 

October 22, 2001
Enron acknowledges Securities and Exchange Commission inquiry into a possible conflict of interest related to the company's dealings with the partnerships. 

October 23, 2001
Lay professes support for Fastow, saying he has the “highest regard” for his character during conference call with analysts and employee meeting. 

October 23, 2001
In a massive shredding operation, Arthur Andersen destroys one ton of Enron documents. 

October 24, 2001
Enron ousts Fastow. 

October 31, 2001
Enron announces the SEC inquiry has been upgraded to a formal investigation. 

November 8, 2001
Enron files documents with SEC revising its financial statements for past five years to account for 586 million dollars in losses. 

November 19, 2001
Enron restates its third quarter earnings and discloses it is trying to restructure a 690-million-dollar obligation that could come due November 27. 

November 28, 2001
Enron shares plunge below one dollar. 

December 2, 2001
Enron files for Chapter 11 bankruptcy protection. 

2002 

January 9, 2002
The U.S. Justice Department confirms it has begun a criminal investigation of Enron. 

January 10, 2002
Arthur Andersen announces that employees in its Houston division had destroyed documents related to Enron. 

January 23, 2002
Kenneth Lay resigns as chairman and CEO of Enron. 

January 25, 2002
Cliff Baxter commits suicide soon after he had agreed to testify to Congress in the Enron case. He leaves a suicide note that doesn’t mention Enron but says, "Where there was once great pride now it's gone.” 

February 2, 2002
The Powers Report, a 218-page summary of an internal investigation into Enron's collapse led by University of Texas School of Law Dean William Powers, spreads blame among self-dealing executives and negligent directors. 

February 7, 2002
Former CFO Andrew Fastow and his former top aide Michael Kopper invoke the Fifth Amendment before Congress; former CEO Jeffrey Skilling testifies, saying he knew of no problems at Enron when he resigned. 

March 14, 2002
Former Enron auditor Arthur Andersen LLP indicted for obstruction of justice for destroying tons of Enron-related documents as the SEC began investigating the energy company's finances in October 2001. 

April 9, 2002
David Duncan, Arthur Andersen's former top Enron auditor, pleads guilty to obstruction. 

June 15, 2002
Arthur Andersen convicted of obstruction after a six-week trial that included 72 hours of jury deliberations spread over ten days. 

August 21, 2002
Michael Kopper pleads guilty to conspiracy to commit wire fraud and money laundering conspiracy; acknowledges funneling millions of dollars to Fastow through myriad financial schemes and agrees to cooperate with investigators. 

August 31, 2002
Arthur Andersen surrenders its license to practice accounting in the United States. 85,000 people lose their jobs. Nine billion dollars in annual earnings disappears. 

October 16, 2002
Arthur Andersen sentenced to probation and a 500,000-dollar fine; firm already banned from auditing public companies with only a few hundred employees left on the payroll after its conviction. 

October 31, 2002
Fastow indicted on 78 charges of conspiracy, fraud, money laundering and other counts. 

2003 

February 5, 2003
After rolling blackouts and soaring energy prices in California, Republican former Assemblyman Howard Kaloogian and the taxpayer group People's Advocate announce separate campaigns to try to recall Democrat Governor Gray Davis. 

March 19, 2003
Enron announces the company will keep its North American pipelines and 18 international pipeline and power assets to emerge from bankruptcy as two separate companies with different names. 

March 25, 2003
California recall supporters begin collecting the 897,158 signatures needed to put the recall on the ballot. 

May 1, 2003
Andrew Fastow's wife, Lea, and seven former Enron executives charged. Lea Fastow is charged with conspiracy and filing false tax forms for allegedly participating in some of her husband's deals. Former Enron treasurer Ben Glisan Jr. and midlevel executive Dan Boyle also charged for allegedly participating in Fastow-run schemes. Additional charges filed against Andrew Fastow. 

July 11, 2003
Enron files reorganization plan in its bankruptcy case that says most creditors will receive about one-fifth of the estimated 67 billion dollars they are owed. The 67 billion dollars shrinks to 66.4 billion dollars after several revisions. 

July 23, 2003
California Secretary of State Kevin Shelley announces that Governor Davis will face a recall election. 

August 6, 2003
Actor Arnold Schwarzenegger announces on The Tonight Show with Jay Leno that he will run for governor. California’s Lieutenant Governor Cruz Bustamante, breaking ranks with fellow prominent Democrats, announces he too will run. Senator Dianne Feinstein rules out running for governor, saying the election is "more and more like a carnival every day.” 

September 10, 2003
Former treasurer Ben Glisan Jr. pleads guilty to one count of conspiracy and is the first former Enron executive to be put in jail. 

October 7, 2003
Arnold Schwarzenegger wins the California recall election. 

November 18, 2003
Enron announces it will sell Portland General Electric, its Pacific Northwest utility, to partnership backed by Texas Pacific Group for 1.25 billion dollars in cash and 1.1 billion dollars in assumed debt. 

2004 

January 6, 2004
Enron's roadmap for emerging from bankruptcy receives a New York judge's initial blessing and will be sent to creditors to accept or reject the plan that will pay them a fraction of what they are owed. 

January 14, 2004
Former CFO Andrew Fastow and wife Lea plead guilty. 

Andrew, who faced 98 counts, pleaded guilty to one charge of conspiracy to commit wire fraud and one charge of conspiracy to commit wire and securities fraud. Fastow agreed to serve 10 years in prison; forfeit 23.8 million dollars, including homes in Galveston and Vermont; and forfeit claims on another six million dollars held by third parties. He is cooperating with the Enron task force in ongoing investigations. 

Lea Fastow pleaded guilty to one count of filing a false tax report for failing to report 47,800 dollars in income on her 2000 personal taxes, part of more than 204,000 dollars undeclared over four years. She is given a one-year prison sentence. 

February 19, 2004
Named in a 35-count indictment, former CEO Jeff Skilling pleads not guilty to wire fraud, securities fraud, conspiracy, insider trading and making false statements on financial reports. He's the highest-ranking Enron executive to face criminal charges in the energy giant's downfall. Charges against former Chief Accounting Officer Richard Causey also expanded in the indictment to 31 counts. 

May 18, 2004
Paula Rieker, former director of investor relations and secretary for Enron's board of directors, pleads guilty to one felony count of insider trading and agrees to pay the SEC the 499,333-dollar profit she netted by selling Enron stock before the public knew about big losses at Enron's Internet business. CEO Ken Lay is escorted into the courthouse in handcuffs. 

July 8, 2004
Indicted on 11 criminal counts of fraud and making misleading statements, Enron's highest-ranking executive, Ken Lay, surrenders to the FBI. After pleading not guilty, he calls a news conference to proclaim his innocence and argue that while he takes responsibility for Enron's failure, only a "superman" could know everything that happens at his company. "It has been a tragic day for me and my family,'' Lay says. 

July 30, 2004
Ken Rice, former co-CEO of Enron Broadband Services, pleads guilty to a single count of securities fraud. 

August 25, 2004
Mark Koenig, the former head of Enron's Investor Relations section, pleads guilty to a charge of aiding and abetting securities fraud and agrees to cooperate with the government. 

August 28, 2004
Kevin Hannon, former chief operating officer for Enron Broadband Services, pleads guilty to conspiracy to commit securities and wire fraud. 

October 5, 2004
Timothy Despain, former assistant treasurer at Enron, pleads guilty to conspiracy to commit securities fraud by lying to credit rating agencies. 

November 3, 2004
Enron’s first criminal trial ends. Former Enron accountant Sheila Kahnek is acquitted. Former Vice President Dan Boyle and four former Merrill Lynch bankers are convicted of conspiracy and fraud in the Nigerian barge deal. 

2005 

January 7, 2005
The U.S. Supreme Court agrees to consider overturning the conviction of the Arthur Andersen accounting firm for obstruction of justice in the shredding of thousands of Enron documents. 

February 25, 2005
The fraud and conspiracy trial of Kenneth Lay, the founder of the Enron Corporation, and Jeffrey Skilling, its former chief executive, is set for January 17, 2006. 

April 19, 2005
Former Enron Broadband Services executives are tried in court for lying to make Enron's Internet unit appear that it was doing better than it was. 

May 31, 2005
The U.S. Supreme Court overturns the conviction of the Arthur Andersen accounting firm for obstructing justice by shredding thousands of Enron documents. Andersen’s top Enron accountant withdraws his guilty plea when prosecutors drop their case. 

July 14, 2005
Former Enron Vice President Christopher Calger pleads guilty to one count of conspiracy to commit wire fraud as part of an agreement to cooperate with prosecutors. 

July 20, 2005
After three months, the Enron Internet trial ends in deadlock, without decision. All five defendants face new trials after mistrial is declared. 

2006 

January 30, 2006
Trial begins on charges of conspiracy and fraud against Ken Lay and Jeff Skilling. 

May 2, 2006
Enron Broadband executives Kevin Howard and Michael Krautz begin their retrial. 

May 25, 2006
Ken Lay is found guilty of all six counts against him. Jeff Skilling is found guilty of 19 of the 28 counts against him. 

May 31, 2006
In the Enron Broadband retrial, Kevin Howard is found guilty of conspiracy, fraud and money laundering. The jury acquits Michael Krautz on all charges. 

July 5, 2006
Enron founder Key Lay dies of a heart attack, less than four months before his scheduled October 23 sentencing. 

September 26, 2006
Former Chief Financial Officer Andrew Fastow is sentenced to six years in prison for conspiracy. 

December 12, 2006
Jeff Skilling begins his 24-year sentence for fraud and conspiracy at a Minnesota Federal Correctional Institute. 

Independent Lense:  Enron:  The Smartest Guyes in the Room.  Retrieved on 9-12-09.   http://www.pbs.org/independentlens/enron/timeline.html