The Enron Scandal Pt. 2
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This episode picks up where the Enron scandal part one left off. If you haven't checked it out yet, we recommend pressing pause and listening to part one first. Due to the nature of today's story, listener discretion is advised. This episode includes discussions of suicide. Consider this when deciding how and when you'll listen. To get help on mental health and suicide, visit spotify.com/resources. Imagine.

It's the summer of 2006. You're living in Aspen, Colorado. The city's playing host to a big event that brings together the world's most brilliant minds and influential leaders: the Aspen Ideas Festival.

Scheduled to speak are Supreme Court Justice Stephen Breyer, former Secretary of State Madeleine Albright, and former President Bill Clinton, among many others. But you won't be in attendance. Tickets cost $1,800 a pop, and you work as a local nurse at Aspen Valley Hospital.

It's around 2:00 AM on July 5th, the third day of the event. You're working an overnight shift in the ICU when you notice a famous name has been admitted. Ken Lay, the disgraced founder of Enron. Someone who couldn't possibly be attending the Ideas Festival. His face has been plastered on the front page of newspapers since the company's massive accounting scandal broke in 2001.

A federal jury has already convicted him of six charges: conspiracy, two counts of wire fraud, and three counts of securities fraud. But there are rumors he might have been greasing the hands of politicians too. He's not in jail yet because he's out on bond, awaiting sentencing. For a second, you wonder what he's being treated for, but it's a fleeting thought. You have your own patients to attend to.

In fact, you forget about his visit entirely until, about 36 hours later, another famous name comes through the hospital's doors: former Secretary of State Colin Powell. He's coming from a dinner with President Clinton and a large entourage, but he doesn't stay long. He's discharged within a couple of hours. Maybe altitude sickness, people say.

And then you read a headline that says Ken Lay died from an apparent heart attack at the hospital the night before. And that means Lay will never be sentenced. His guilty verdict will be expunged, offering enormous protection for his multi-million dollar estate.

I'm Carter Roy, and you're listening to Conspiracy Theories, a Spotify podcast. Episodes release Wednesdays. Be sure to check us out on Instagram at TheConspiracyPod, and we would love to hear from you. So if you're listening on the Spotify app, swipe up and give us your thoughts.

Today, we're diving back into the Enron scandal. And once again, Connor, one of our show's producers, is here to tell the story. Hey, Carter. Hey, Connor. So good to have you back. And we are about to dive into part two. Stay with us.

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Hi there, Carter Roy here. If you're interested in true crime, especially unsolved murders, serial killers, and cold cases, you'll love my brand new show, Murder True Crime Stories. Each episode covers a notorious murder or murders with a special focus on those who were impacted the most. We'll always leave with the knowledge of why these stories need to be heard. You can listen to Murder True Crime Stories wherever you get your podcasts.

Okay, where should we start? Well, last time we walked through Enron's rise, fall, and the court cases that followed, and we focused a lot on the who, what, why, and how at the time. But today, we're going to dive deeper into Enron's legacy, and I found the perfect person to help us.

My goal for a long time was to be something other than Enron Girl, and I have decided that's just likely not going to happen. This is Bethany McLean. She and reporter Peter Elkin co-authored the book The Smartest Guys in the Room, The Amazing Rise and Scandalous Fall of Enron. But Bethany wasn't always considered Enron Girl.

Back in 2001, she was a young, up-and-coming journalist writing a small column for Fortune magazine. It was called Companies to Watch. Which was essentially a stock-picking column in what was known as the back of the book, the personal investing section at the back of the magazine. And nobody really wanted to work for that section of the magazine. You know, you wanted to be writing pieces in the middle of the book, or you wanted to be writing for the upfront section, right?

That was where the cool kids were. But when I started at Fortune, I very quickly got a reputation for being debatably smart, but definitely unable to write. And I like to blame my years at Goldman for squeezing any writing ability out of me. But so nobody was going to sign me any of the more glamorous stories because I had this reputation, but a stock picking column that they thought I could do.

Bethany had worked as an investment banker at Goldman Sachs before pivoting to journalism. And one day, a source of Bethany's tells her to take a closer look at Enron's books, thinking maybe she can figure out how the company makes money.

And it was one of those lucky moments in a career because I was, I guess, at that point, five years out of working at Goldman. And so I knew enough to know that if I could go through Enron's numbers and have questions that it wasn't because I was clueless. Well, it might have been because I was clueless. But then when nobody I talked to could answer the questions either, then I started to figure out that, yeah, there's there's a mystery here.

Okay, so what did she do then? As she's trying to figure everything out, she calls up Enron to ask some questions. You know, standard journalism stuff. She wants to run the story by them, see if all the facts are right, and ask if they have a comment. And Jeff Skilling, who was then the company's CEO, had gotten on the phone with me and he had said, basically, you're unethical.

because you don't understand enough about our business to be writing a story. And the questions you're asking show your degree of ignorance. And if you understood our company a little better, you wouldn't be asking such dumb questions.

And that's a pretty terrifying thing to be told because, you know, it could always be right. Right. And then he had three Enron executives fly up to Fortune and sit with me and my editors and try to explain why we were missing the boat. And at the end of that meeting, my editor said they didn't answer a single question, make the story tougher. Right.

But I was still terrified. It's an asymmetric reaction when you publish a story. If you write something really positive about a company, you're going to get praise from the company. And if there's a mistake in the story, they're not really going to care because the story was positive. If you write something negative, you're going to get outrage from a lot of quarters, from investors, from anybody who stood to make money on this thing that you're now trying to blow a hole in.

And if there's a mistake in the story, if you've missed something, you're screwed. And there's going to be some form of retaliation. In Fortune's case, it was that Enron wouldn't talk to Fortune anymore. Okay, it sounds like she really pissed off Enron. But what did Bethany's article actually say? Yeah, well, that's kind of the thing. Even though there was backlash, she didn't really accuse Enron of doing anything.

So I think the story I wrote in Fortune was pretty lame in the sense that it more said there are a lot of questions here than it did say this thing is a fraud and it's going to go bankrupt. So people have given me credit for breaking the story, which I think is undeserved because to me, breaking a story would have been actually saying,

the CFO of Enron is ripping off the company and ripping off investors. And I just knew enough to say that something didn't add up. My story was published under the very meek title, Is Enron Overpriced? I mean, given that the company was bankrupt six months later. Yes, it was definitely overpriced. But if you had asked me when I was writing that story, is there a chance Enron is going to go bankrupt? I would have said absolutely no way.

We hadn't had in the decades running up to Enron a major corporate calamity like this. And so even though its revenues were a little bit of a figment of the imagination, it was one of the most celebrated companies around the world. Everybody wanted to be like Enron. And the idea that this company could just go poof was pretty inconceivable. And how did the public react to Bethany's piece? They kind of didn't.

I mean, according to her, no one really picked up on the story until after Enron went bankrupt. People started looking back and wondering, hmm, why didn't anyone catch this? And that's when they found her story. So the big splash came later. And by that point, Bethany wasn't the only one covering the story of Enron. Everyone was. And that includes the Wall Street Journal, which did a ton of reporting detailing the actual specifics of Enron's corruption.

All of a sudden, everybody decided, or the world decided, that the story I had written was important, and that came out of nowhere. Back in those days, even though our names went on stories in Fortune, there wasn't much exposure outside the magazine. It wasn't like you were going on Twitter or TV to talk about things you'd written. That whole ecosystem just didn't really exist. So to suddenly have everybody writing about me and this story was really, really surprising.

I mean, the Enron story must have been on the front page of The New York Times and leading the news for weeks on end, if not months. And I think it was because it was the first time in such a long time that we had a major American company go bust. And it was the first time since employees had been told, you know, rely on your company, put your savings into your employer stock, and this is how you're going to fund your retirement.

And suddenly there was this shock that this thing could happen. You know, a company that everybody had thought was solid could just vaporize. And I think it was a real a real crack. And unfortunately, the first of many, but a real crack in our system.

And that's maybe the key takeaway here. Enron was the first, but not the last crack in our system. A lot has happened since. When Enron went bankrupt and I started working on my book, people said to me, well, how are you ever going to top this in your career? To the idea of me being Enron girl. And I thought, well, nothing like this is ever going to happen again because I've had my scandal now and things like this don't happen all the time.

And, you know, since then, we've had Bernie Madoff. We've had the global financial crisis. We've had FTX. We've had Elizabeth Holmes and Theranos. We've had innumerable other examples. And so it turned out that Enron wasn't so unique after all. Wow.

I remember it so well. It did seem like this cataclysmic thing, and the idea that it could essentially evaporate just changed your whole notion of what a company was. You're like, yeah, there's certain companies that they'll rise and fall, but they'll always be there. Goodyear Tire will always be there. And Enron seemed to fit into that category, so it spread doubt over the whole thing,

And yet right now, we kind of have a whole different take, which is like, oh, maybe 50%, 70%, 20% of these companies are all fraudulent house of cards. And I think if the Enron scandal were to happen today, the world might have a completely different reaction.

For better or worse, I'm not sure it would be so shocking, like as you're saying. And for our purposes, it might not have inspired as many conspiracy theories. Okay, well, those are my magic words. So let's talk about the conspiracy theories. Let's start with Cliff Baxter's death.

Okay, so who's Cliff Baxter? Baxter served as vice chairman of Enron until May 2001, when he stepped down from the role that made him a multimillionaire. This was before the bankruptcy, before everything hitting the fan. But afterwards, in January 2002, police find Baxter dead in his car with a handgun at his side. Okay, so police find Cliff Baxter dead.

What happens next? A lot of speculation. At the time, no one really knows the extent of the company's internal dealings. They just know Enron went bankrupt and there's an investigation underway. Then suddenly there's this major tragedy and people start to get suspicious. The police initially declare Baxter's death a suicide, but after some blowback, they keep the case open to investigate whether it could have been murder.

At the time, for sure, that is part of the reason or that added to the reasons that Enron was on the front page of every paper because, you know, a top executive found dead in their car. He must have been off to keep them from divulging some particularly salacious piece of information.

The question became, did someone kill Baxter before he could testify? I guess the first question is, why would somebody want to kill Baxter? I mean, was Baxter's testimony so important or was it just because of his role as vice chairman? Because of his role, yes. But also because Baxter had reportedly raised concerns prior to leaving Enron.

We talked last time about how Sharon Watkins, the Enron whistleblower, wrote a letter to Enron's upper management about the company's murky accounting practices. Well, she named Baxter as another employee who had concerns. She wrote, quote, And so that made Baxter a potential star witness for the prosecution.

Someone who could say, hey, no one can claim ignorance here. These people knew things were shady and they didn't make any effort to change. Okay, so I can see how people could imagine a motive to get rid of Baxter. He could be the critical piece of testimony that the whole thing hinges on.

But what did the actual evidence say? Early on, it was reported that a note was found with Baxter at the time of his death, but it wasn't initially made public. And in its absence, questions started to percolate. What did it say? Did it mention Enron? And that April 2002, CBS published an article called The Mysterious Death of an Enron Exec.

They tasked two experts with reading the police, autopsy, and lab reports. And those experts raised a couple of red flags. For example, there was allegedly a strange wound on one of Baxter's hands and what they called unexplained shards of glass in Baxter's shirt. A few months after that article comes out, the police released the 900-page report they compiled during Baxter's death probe.

And that, for me, puts everything to rest. According to the Houston Chronicle, the report showed that authorities did actually receive several tips suggesting Baxter died from something other than suicide, but none of them panned out.

And all the documented evidence pointed to suicide. For example, the gun that killed Baxter? It was his. He bought it about a year prior, and forensics testing showed it was his hand that held and discharged the gun. What about the note he left? Was that ever made public? It was. It was a short message addressed to his wife, and to respect the family's privacy,

We're choosing not to reveal the contents here, but the note did support suicide as the cause of death. And a handwriting test confirmed Baxter wrote the letter. Records also indicate that in the days leading up to his death, he actually tried to seek help. On his doctor's orders, he tried to make an appointment with a psychiatrist, but there weren't any available slots in the near future, so he gave up. Here's Bethany's assessment.

I think it's just the tragic story of one man's struggle with himself and inability to confront what he saw coming down the pike.

That does seem to be what the facts lay out. And what about Ken Lay's sudden death? Is there anything there? As a reminder for our listeners, Lay was one of Enron's founders and the company's longest sitting CEO. He was convicted of a few different crimes, but he died before his sentencing. And because he died, his guilty conviction was expunged because he died before getting sentenced and his death

wife, I believe, got to keep some of the money that would otherwise have been forfeited. So people believe that he either faked his death and he's still out there somewhere or that he killed himself deliberately in order to get out from under the guilty verdict. Okay. I understand why Kenley might want to fake his own death, but help me understand the logic. Why would he want to actually die? It's kind of twofold.

to protect his family's legacy and to protect their estate. Lay was 64 years old and looking at maybe spending the rest of his life in prison. As Bethany mentioned, his death erased his guilty conviction, and it made it much more difficult for the government to seize the $43 million in assets that they were after.

I couldn't find the exact numbers, but Lay's wife and kids walked away with enough assets and savings to live quite comfortably. Okay, well certainly that's motive to get out of the conviction one way or the other. And walk me through what evidence we have. Well, similar to a lot of fake death conspiracies, it's mostly circumstantial. For starters, the timing. It just seems a little too convenient.

And a lot of internet theorists like to bring up that Lay's family had his body cremated shortly after his death, so there's no body to point to anymore. But some theories go even further, like the one we alluded to at the start of today's episode, that involves Colin Powell. Colin Powell, right, was the U.S. Secretary of State at the time of Enron's collapse, right? He was.

But apparently the day after Lay was pronounced dead, Powell was treated for altitude sickness at the same hospital in Aspen, which resulted in rumors that maybe Powell brought Lay all the paperwork and identification he needed to start over in a new life.

Most theories suggest on a beach somewhere living the high life. Others though claim the CIA got involved through Lay's connections to the Bush family, since George W was president at the time. And there's two versions of that theory. In one, the CIA helped him fake his death. In the other, they gave him a special untraceable poison that ended his life painlessly.

And believe it or not, after his death, the theories surrounding Lay were so rampant that people started selling t-shirts with his face on them alongside the words Ken Lay Lives, which also became a website domain which no longer exists anymore.

Well, maybe he's hanging out with Elvis somewhere. And it does have all the elements of what we see with these kind of conspiracies. I mean, he does have a connection to the government. Colin Powell, he's probably somebody he does know. Why would Colin Powell go to the hospital for a couple hours? What could be transferred there? How hard is it if you have $40 million to get a new identity? Probably not. Yeah, yeah. Has anyone ever claimed to see Ken Lay after his alleged death? Well,

Well, funny that you asked, because this is a great story, in my opinion. According to The New York Times, some people believed Ken Lay moved on to porn. I'm sorry, what? He didn't. But apparently there's an adult movie star named Dave Cummings that some thought kind of looked like Lay.

Other than that, I'm not sure if there have been other Ken Lay sightings. I am going to refrain from researching that one. And what evidence is there to support the official story? Well, the official coroner's report, family statements, everything you'd expect. That all supports the claim that Lay died of a heart attack. Here's Bethany again. I would love it if Ken Lay were to reappear someday. I think that would be awesome. But I think he's dead.

Thinking you're dead is a hard thing to follow. Yeah, it is. And also, not to speculate, I'm not a doctor, obviously, but a man under incredible pressure at 64 years old, I mean, certainly a heart attack is within the realm of possibility. That's not a crazy thing. No, not at all.

But it's also not the last conspiracy theory Enron inspired. Bethany did bring up one more. She actually said the smartest guys in the room, the documentary, not the book, made a pretty compelling case for this one, even though she's never agreed with it. We touched on it briefly last time.

the Bush administration was supportive of Enron and there was some kind of conspiracy between the Bush administration and Enron to keep Enron going. And it's true that Ken Lay and George Bush were close friends, or were, they weren't close friends, but that they knew each other. And certainly Enron's policy of energy deregulation was lined up with the Bush administration's overall directive on things.

In the end, I've always believed that if there had been complicity between the Bush administration and Enron, you and I probably wouldn't be here talking because Enron would have survived. When push came to shove, no one bailed Enron out, right? It's very unlike what we saw in the financial crisis just a few short years later where firms did get bailed out. No one bailed out Enron. And so these days, now it feels really far-fetched that there was some kind of conspiracy at work there.

Oh, yeah, I can understand the assumption there might be conspiracy knowing that these people know each other and have an aligned interest. Though I would add a caveat, being somebody who dabbles in conspiracy theories, that precisely because it was so early, maybe that's why it wasn't bailed out.

Now we might expect the government to come along and it doesn't really expose the players. It might be that there was some involvement, but the people got too spooked by the time it really looked like Enron would fail, not knowing, well, you can even cover up something that big, it turns out.

Yeah, I would say take it up with the Bush administration. I'll reach out. Yeah. But from Bethany's perspective, I think she makes a fair point. And while discussing Enron's relationship to the Bush family, she actually hit on a concept that I think is really helpful in thinking about Enron's legacy.

I thought this in recent years since the financial crisis, that the more nefarious and insidious part of corruption is implicit corruption rather than explicit corruption. So explicit corruption relies on somebody giving somebody a bag of cash to do something that the other person doesn't already believe in.

implicit corruption arises when we all already think the same way. And so I think during Enron's rise, there was a lot of implicit corruption and there was between Enron and the Bush administration because they had the same kind of free market goals, even though in the end, all these believers in the free market, when the free market turns on them and delivers a verdict of bankruptcy, they say, no, no, no, that's a mistake. You need to bail us out.

The market's getting it wrong this time. But I think that's more, you know, the Bush administration would have been innately sympathetic to Enron's push for energy deregulation because they believed that already, not because they were being bought off by Enron. I love that. I really think that gets at the heart of so much that we see in our society.

giant corporations and financial systems. And it's so easy to see that kind of implicit corporation in our imagination, that it's not standing on a golf course thinking, "Ha ha ha ha, I'm going to hand you a bag of money and you do this illegal thing." But might be a couple guys being like, "Wouldn't it be great to have no regulations? And wouldn't it be great if we could just kind of sell these energy commodity futures this way and like, yeah, let's make the government work that way and business work that way and look, it's all working and basically nobody watching."

I totally agree. I think it's a great way to frame the Enron scandal. Implicit versus explicit corruption. And I know this is going to sound strange given everything we've covered up until now, but there's an argument to be made that, with some notable exceptions, Enron's executives didn't technically do much wrong.

You have got my attention. What do you mean Enron's executives didn't technically do much wrong? I mean, how can that possibly be? Okay, fraud charges fall under two categories, civil and criminal. And only one big criminal charge came out of the Enron scandal. Enron's CFO, Andrew Fastow, was accused of skimming money off the top of transactions he made. He was basically accused of stealing. And that was true.

He did steal. And he admitted he did. It was very black and white, but all the other charges were a lot more amorphous. The tactics Enron's execs used to make their books look better, as we said last time, included 1. Hiding their debt by transferring failing assets to outside special purpose entities, or SPEs, and 2. Abusing a technique known as marked market accounting to overstate its revenues.

But mark-to-market accounting isn't illegal, and neither is the use of special purpose entities. They're actually relatively common practice in the business world. Plus, Enron's board approved the use of those SPEs, knowing they were owned by Andrew Fastow, and Enron's external auditor, Arthur Anderson, they of course played a role too.

I've referred to Enron in recent years as a legal fraud. And what I mean by that is that much of what, not all, but much of what Enron did was actually legal because the accountant signed off on it.

So it met accounting rules, but it totally was not representative of economic reality. And if it hadn't been for Arthur Andersen's willingness to sign off on these dubious transactions, then the whole thing could never have taken on the life that it did. And it led to a lot of questions about the role of accounting firms as gatekeepers, because accounting firms are actually supposed to be working for the investing public, not for the companies for whom they work and by which they are paid.

which is a not small problem in our system and one that continues to this day. Bethany described Arthur Andersen as Enron's enabler. So I want you to think of them as a doctor. It's not a perfect comparison, but hopefully it helps put things into perspective. It's not illegal for a doctor to prescribe painkillers to a patient with severe or chronic pain, like say someone recovering from a major surgery.

But say that same doctor prescribes painkillers in even larger doses to a patient experiencing lesser pain. Knowing the incredibly addictive nature and potential risks of some painkillers, is that a moral thing to do? I wouldn't say so. But is it legal?

Well, it's kind of a legal gray area. Many prescription painkillers are subject to regulation, but making regulatory laws too strict could potentially punish the patients who stand to really benefit. The system requires trust. Trust that the doctors will prioritize the health and well-being of their patients and the general public who could be put at risk by their patients' actions if, say, they operate a motor vehicle while under the influence.

Arthur Andersen ended up going bankrupt and getting taken down by the Enron scandal. A huge debate about whether or not that was fair. And for sure, it helped shape Justice Department policy and the lack of enforcement going forward because nobody wanted to be responsible for causing another Arthur Andersen. Because according to one viewpoint, Arthur Andersen was put out of business because it was charged by the government with fraud and convicted. But then the fraud charge was overturned by the Supreme Court.

And so according to this viewpoint, Arthur Andersen was put out of business for not doing anything wrong. And a lot of employees, tens of thousands of employees who had no connection to Enron lost their jobs and their savings for something that was not their fault. I'm pretty sympathetic to the second point of the second argument. I'm not as sympathetic to the first argument because

Arthur Anderson was never charged with what they actually did wrong. They were never charged with aiding and abetting Enron's accounting fraud because the Justice Department viewed that as too complicated for a jury. It would have gotten into many of the weeds of accounting law in a way that, you know, if you really paid attention to it, you actually might end up siding with Arthur Anderson. You might end up saying, this is totally misleading, but it met accounting rules at

at the time. So instead, the Justice Department charged Arthur Anderson with document destruction, not what they were really guilty of. And then the Supreme Court threw that out. They were never charged with aiding and abetting and runs accounting fraud. And when I say they were guilty of that, I mean they were guilty in a moral sense.

And it's hard to argue with that. For all the convictions Enron's execs faced, it's pretty easy to say what they did was morally wrong. Indefensible, even. They knowingly and exorbitantly misrepresented the truth. But as Bethany says...

Prosecutions are very dependent on the mood of the moment. Enron went bankrupt at a time where the public was calling for people's scalps. And so people got really aggressively prosecuted, even for things that might have been up against the line, not wildly over it. In the financial crisis, nobody got prosecuted because the mood, at least in Washington, was not to prosecute the very banks and financial players we just bailed out.

Yes, Enron's execs knowingly employed an elaborate scheme to defraud the public. Their actions hurt a lot of people. By all measures, what they did constitutes a conspiracy. A jury of their peers found them guilty on a lot of different civil charges. But that doesn't change the fact that our country's systems aren't perfect. That many of the tactics Enron used were and still are legal.

That is incredibly gray and incredibly true. I think it really highlights how hard it is to find villains or good guys in these kind of things where it's like, well, you can legally get away with it. Is it okay? Even though, wow, by doing it, you've upended part of the U.S. economy. You've destroyed people's lives. That can't be okay. And because of that, has the government done anything to prevent another Enron scandal from happening? They did.

The Bush administration passed a regulatory measure called the Sarbanes-Oxley Act, which created more penalties for companies if they destroy, change, or falsify financial records. And it generally placed more responsibilities on companies by creating more disclosure rules for their accounting practices. The Obama administration did something similar with Dodd-Frank after the financial crisis of 2008.

But I think the question is, does the Sarbanes-Oxley Act work the way we need it to? Some economists argue it does as much harm as good. That it actually created too much bureaucracy and red tape for smaller businesses to go public, which has had a negative effect on our economy. Simon Constable wrote a piece about it for Time magazine called "How the Enron Scandal Changed American Business Forever." Bethany feels differently.

It did have a positive impact in terms of tightening up accounting rules around these special purpose entities and around the amount of equity that had to go into them and making executives of companies sign the financial statements owing to their accuracy. There were things in it that I think overall were positive things.

I guess the question I'd ask is not so much what was negative about it, but rather, did it really make a difference? I think where there is short-term orientation and where there's a way for people to make immense amounts of money off businesses that don't succeed in the end, there will be people who figure it

how to make immense amounts of money off businesses that don't succeed and products that aren't good for the country. And as long as those motivations exist, there will be problems. And that doesn't mean we shouldn't try to regulate because this can very quickly become a nihilistic argument for why bother throw your hands in the up in the air and don't do anything at all. And I don't mean that. I don't. But I also think that we should have a healthy skepticism about what regulation can actually do.

How much can regulation matter in the face of huge incentives to do the wrong thing? I don't think that's an excuse for not trying, but I think when you regulate, you need to have an awareness of foreseeable consequences and also of the unforeseeable consequences.

What happened at Enron is still important all these years later. In some unexpected ways too, like how as of this recording, an obstruction law created because Arthur Anderson shredded a bunch of evidence before the government could seize it, that law is now being debated in the highest courts in our country. And on a broader scale, Enron remains important because it was the proverbial canary in the coal mine.

And Ron still matters so much because I think it was first, but it set the tone for a lot of what was to come. It wasn't a one-off. It's precisely because the elements in the story are so familiar now that it's important, not because it is so unique. Oh, it almost seems like the norm now, which doesn't exactly fill you up with hope for the future, does it? No, no, it does not. I actually asked Bethany if she could give me a little hope.

I asked her for her best argument for why Americans should have faith in their financial institutions. Here's what she said. I actually don't know if we should have faith in the institutions, but I think we should have faith in Americans. And I think even the very thing that gets us into trouble is actually for the most part a good thing, and that's our willingness to believe. It's the thing about stories about business frauds or white-collar frauds

crimes or business gone wrong, which is that it always requires the complicity of the victims. Because if people weren't willing to believe, if people weren't willing to invest in Enron, if people weren't willing to give Bernie Madoff their money, if people weren't willing to give FTX their money, Theranos their money, these things would never happen. But it's our willingness to believe sometimes in the face of insurmountable odds that we

leads to great advances too. And so I think that's two sides of a coin and it's the positive. As much as we criticize ourselves when there's a huge calamity for our naivete, we should also give ourselves a little bit of, not a pat on the back, but a little bit of, because without belief in the world, yeah, a little bit of grace. That's a really good word because without a willingness to believe the world does stagnate and we really don't like that picture.

I think that's beautiful. I think especially in the world of conspiracies and conspiracy theories, where there's a lot of acrimony about them and believers and whether things are true or not. It is good to remember that our power of belief, even though it can get us in trouble sometimes, and maybe doesn't always line up with all the facts that we want.

It is the power of innovation. It's the power to break through norms. It's the power to break through bad institutions sometimes. So I really love that idea. That's not the institutions to blame, but our belief powers us. And, you know, there's going to be good and there's going to be bad that comes with that. I couldn't have said it better myself. So I have just one more question for you. Where are Enron's executives now? Well, Bethany says she used to keep tabs on them, but she doesn't anymore.

I've seen Andy Fastow out and about a few places. We've actually crossed paths at a couple of speaking engagements. And I've heard Jeff Skelling is active in Houston and trying to raise money for some new ventures. And I wish him the best of luck. He served his time and at a very high price. And he's a talented guy. Wow, that's well, not the place I expected this to end.

But I'm really struck by her, I guess, grace is the word you used. I mean, she's probably the person that knows more about what went wrong in Enron than anybody. And yet she doesn't have this evil, good, binary, black and white view of it all.

And she seems to understand that it's not just good guys and bad guys, but this giant Petri dish we all live in and we're all trying to do our best. And I guess maybe that's the lesson we can all take from it. And thank you, Connor, for joining us and helping guide us through this really symbolic point in American history. Yeah, thank you so much. I really enjoyed working on this story and I really appreciate you letting me help tell it. Yeah, of course. Well,

There will be more to tell, so I'm sure we'll hear from you again. And thank you all for listening to Conspiracy Theories, a Spotify podcast. We're here with a new episode every Wednesday. If you or someone you know is feeling hopeless or struggling emotionally, visit Spotify.com slash resources for help.

We'd like to give a special thanks to Bethany McClain for lending her expertise to today's story. If you're looking for more information on the Enron scandal, we highly recommend checking out the book she wrote with Peter Elkind, The Smartest Guys in the Room. It's also available for Spotify Premium subscribers in Spotify's audiobook catalog.

Bethany is a contributing editor for Vanity Fair and the author or co-author of many more books, including "Shaky Ground: The Strange Saga of the U.S. Mortgage Giants,"

Saudi America, the truth about fracking and how it's changing the world, All the Devils Are Here, the hidden history of the financial crisis, and The Big Fail, what the pandemic revealed about who America protects and who it leaves behind. And be sure to check us out on Instagram @theconspiracypod. And we'd love to hear from you. So if you're listening on the Spotify app, swipe up and give us your thoughts.

Do you have a personal relationship to the stories we tell? Well, email us at conspiracystories at spotify.com. Until next time, remember, the truth isn't always the best story, and the official story isn't always the truth.

This episode was researched and written by Connor Sampson, edited by Mickey Taylor, fact-checked by Laurie Siegel, and sound designed by Alex Button. Our head of programming is Julian Boisreau, our head of production is Nick Johnson, and Spencer Howard is our post-production supervisor. I'm your host, Carter Roy. This episode is brought to you by Hills Pet Nutrition.

When you feed your pet Hills, you help feed a shelter pet, providing dogs and cats in need with science-led nutrition that helps make them happy, healthy, and ready to be adopted. It's an initiative that Hills has supported since 2002. And since then, the Food, Shelter, and Love program has helped more than 14 million pets find new homes, changing their life forever so they can change yours.

Science did that. Learn more at hillspet.com slash podcast.