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Enron Corp. board records
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Enron Corp. board records

Accession 2487

Hagley Museum and Library: Manuscripts and Archives Department, Hagley Museum and Library


PO Box 3630
Wilmington, Delaware, 19807
302-658-2400
askhagley@hagley.org

Finding aid prepared by Rainer Naus, Andrew Engel, 2016

This finding aid was produced using the Archivists' Toolkit 2016-04-01T12:27-0400

Finding aid prepared using best local practices and Describing Archives: A Content Standard

Cite items for this collection in the following format:
[Description and dates], Box/folder number, Enron Corp. board records (Accession 2487), Hagley Museum and Library, Wilmington, DE 19807

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Descriptive Summary

Title: Enron Corp. board records
Dates: 1997-2002
Accession Number: 2487
Extent: 3.0 linear feet
Language of Material:
Repository: Hagley Museum and Library: Manuscripts and Archives Department
Abstract: This collection contains meeting minutes, supporting materials and other documents relating to the Department of Justice investigation into the Enron Corp. from 1997-2002.
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Administrative Information


Processing Notes

Digitized copies of these documents can be accessed through the Hagley Digital Archives.

Access Restrictions

No restrictions on use.

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Biographical/Historical note

The rise and fall of Enron Corp., a natural gas utility transformed into the world’s largest energy trader, followed a pattern of boom and bust familiar in the history of American business. A charismatic and reckless entrepreneur entices investors with the promise of big returns. Initial stability soon gives way to hubris, excessive risk-taking and misreading the markets. As losses mount, the entrepreneur results to creative or outright fraudulent bookkeeping, drawing in more capital in the vain hope of staving off the inevitable collapse. Depending upon the size of the losses, the entrepreneur’s name and that of his firm either sink into quick oblivion, or become bywords for chicanery and scandal for a generation or more.

Enron Corp. was incorporated in Delaware on April 25, 1930 as the Northern Natural Gas Company. In its early years it was a very large but otherwise ordinary natural gas utility serving the Plains States and headquartered in Omaha, but like many companies, it began conglomerate diversification in the late 1960s and changed its name to InterNorth, Inc. on March 28, 1980. It then bought the Houston Natural Gas Corp. in 1985, briefly becoming known as HNG/InterNorth. Although InterNorth was the surviving corporation, HNG dominated the management of the merged company. When Samuel Segnar of HNG retired as chairman and CEO in 1986, he was succeeded by another HNG officer, Kenneth L. Lay, who changed the name of the company to Enron Corp. on April 10, and moved the headquarters to Houston.

Responding to Congressional deregulation of natural gas prices, Lay introduced the Gas Bank, a new way to market natural gas to consumers, in 1989. The Gas Bank served an intermediary between buyers and sellers and enjoyed great success. Soon, Enron was trading natural gas as a commodity, and the firm began to view itself more and more as a trader and less as a producer. Enron then began to extend their business model, first developed for natural gas, to electric power, steel, water, and paper.

In 1997, Lay promoted Jeffrey Skilling, whom he had hired as CEO of a subsidiary in 1990, to be Enron’s President and Chief Operating Officer. Skilling in turn hired Andrew Fastow as Chief Financial Officer in 1998. Enron’s senior managers created a corporate culture in which managers received most of their rewards in stock options, leading to a focus on short-term performance bonuses and boosting stock prices.

In 2000, Enron announced its entry in to the broadband fiber optic segment and founded Enron Broadband Services, Inc. The energy trading website Enron Online, launched in 1999, quickly became the largest e-commerce site in the world. Many analysts and industry insiders considered this move to be a logical expansion of the business. This led to the doubling of the carrying capacity of fiber already in the ground and eventually an oversupply. Within months of the expansion there was a large quantity of unused fiber connections. Combined with the failure of many start-up internet firms, Enron would lose over $1 billion in its broadband venture, but Enron employed deceptive accounting practices to record a profit of $100 million.

Increasingly relying on its trading business, Enron made changes in its accounting practices, becoming the first non-financial firm to adopt mark-to-market accounting, under which accounting is based on current market value, not historical value. In this, Fastow was assisted by Enron’s outside auditor, Arthur Andersen LLP. The stock price rose 56% in 1999 and an additional 87% in 2000, however Enron was losing money on its operations but continued to show a profit due to unconventional accounting practices. Enron also relied heavily on prepaid agreements which allowed the firm to raise cash, similar to the way in which a loan functions, all the while not showing the liability on their balance sheet. In 2001, Enron signed over $5 billion on prepaid agreements in an attempt to raise capital.

Also risky was Enron’s heavy use of Special Purpose Entities (SPE) to manage the risk associated with various projects. SPE’s were shell firms created by a sponsor but funded by independent equity investors. By 2000, Enron sat atop a bewildering maze of over 2,000 subsidiaries and affiliates spread around the world. At first used correctly, Enron later began to make assurances to an investor that a commitment would be for a short period and then find a new investor to assume the role of a third party and allow the initial investor to secure large profits, in essence a form of Ponzi scheme. When Enron began to have difficulty finding replacement investors, they are reputed to have used key management personnel for the role, which casts doubt of the issue of control of the SPE. By the end of the 1990s, Enron was using SPE’s as hedge funds to lock in mark-to-market profits or to hide losses of bad assets, capitalizing with its own stock, in effect, hedging assets with itself.

In 2001 complaints about the clarity of Enron’s accounting methods and practices were beginning to raise concerns. By then, entities such as Raptors I to IV, created in 2000 to remove bad international assets from Enron’s books, were almost insolvent. In March of 2000, the Raptors were reorganized which helped the firm hide an addition $200 million in losses. The Whitewing Associates L.P. and Osprey SPE’s had their liability points tripped in July of 2001 when the stock fell below $47.00. In 2000, Enron claimed to have $4.8 billion in operating cash, when in reality it had very little. The $100 billion in revenue that was reported in 2000 was simply revenue from trades where cash did not change hands. By this time, credit rating services began to take note of the firm’s financial position at the same time as prices in the fiber optics market plummeted.

The 10-Q report filed in the second quarter of 2001 showed a negative cash flow of $1.3 billion YTD. Another SPE, Marlin, which had been used to cover the losses from one of Enron’s forays into the water utility market, had a payment due to investors at the end of 2001. This obligation was refinanced in July of 2001 for $1 billion. However the note would become due if the stock price fell below $34. As energy prices fell in 2001, so did the stock price, which would mean refunding $2 billion in deposits. The situation becoming dire, Jeff Skilling, who had been promoted to CEO in February, resigned in July and Kenneth Lay once again became CEO. This change, along with many others in executive leadership looked suspicious to investors and analysts.

Stock prices fell $5.00 a share the day that Skilling’s departure was made public in August, and fell an additional $25 per share on September 12, 2001. Stocks would continue to slide through October forcing Enron to replace CFO Andrew Fastow. Facing a liquidity crisis, Enron was forced to draw on $3 billion in back up credit which would only last a few days. The collapse of the stock price led to billions of dollars in obligations coming due immediately. In a final attempt to save the company, Enron was able to secure another $1 billion in loans using their pipelines as collateral. When Enron reported a third quarter loss of $664 million, bailout merger talks with another energy giant, Dynegy, Inc., collapsed. On December 2, 2001, Enron filed for bankruptcy protection, briefly taking the palm for the largest U.S. corporate failure. It would be exceeded, first by WoldCom in 2002 and then Lehman Brothers in 2008.

Following congressional hearings and trials, twenty-two Enron executives and partners pleaded guilty or were convicted for their roles in the collapse of Enron. Arthur Andersen was found guilty of fraud and shredding evidence (a conviction that was later overturned on appeal), and many partners at Andersen were also personally convicted of crimes. The scandal literally destroyed the Andersen firm, causing it to lose its CPA license and the ability to practice before the SEC. Many executives at Enron received probation, but many received prison terms, including former CFO Andrew Fastow and former Chairman Kenneth Lay. Lay died in July 2006 while awaiting sentencing. Lay’s estate was later sued in civil court in an attempt to recover funds. Nearly 20,000 employees lost not only their jobs but also their pensions, as the plan’s resources were tied to company stock. Thus ended the first great American business scandal of the twenty-first century.

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Scope and Content

The records in this collection belonged to Herbert “Pug” Winokur, a member of Enron’s board of directors and chair of its finance committee. He used these records to prepare for depositions associated with the Enron bankruptcy. It is one of the most complete collections of Enron board records in existence.

The Enron Corp. board records span the years 1997 through 2002 and have been divided in four series based on the arrangement of the donor. Series 2, 3, and 4 reflect the original arrangement of the materials as they were delivered to Mr. Winokur by his legal team.

Series I. Loose Minutes, 1997-2001, are minutes and materials from the Board of Directors, Finance Comittee, and Executive Commitee.

Series II. Prep Materials, Herbert S. Winokur, Jr. 1997-2001, contains materials used by Winokur ahead of the Enron trial.

Series III. Bound Files used by the Department of Justice, 1997-2001, is arranged by subject. This item contains board minutes and presentation materials, quarterly and annual reports, as well as press releases and news articles relating to Enron.

Series IV. 1997-2002, Key Transactions Notebook, contains meeting minutes as well as copies of emails that were used in the investigation, indictiments, and company memos.

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Access Points

Winokur, Herbert S.
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Series Descriptions and Inventory

I. Loose minutes, 1997-2001
3.0 linear feet
Box Folder
1 1 Board of Directors meeting minutes and materials, 1997 February 11
Box Folder
1 2 Executive Committee minutes, 25 March 1997
Box Folder
1 3 Finance Committee minutes, 5 May 1997
Box Folder
1 4 Board of Directors minutes (partial), 6 May 1997
Box Folder
1 5 Executive Committee minutes (partial), 1997 November 5
Box Folder
1 6 Finance Committee presentation materials, 1997 December 8
Box Folder
1 7 Executive Committee minutes, 1998 March 2
Box Folder
1 8 Finance Committee minutes, 1998 May 4
Box Folder
1 9 Finance Commitee agenda and materials, 1998 August 10
Box Folder
1 10 Executive Commitee minutes (partial), 1998 October 1
Box Folder
1 11 Finance Commitee minutes, 1998 December 7
Box Folder
1 12 Executive Committee minutes, 1998 December 18
Box Folder
1 13 Finance Committee minutes, 1999 May 3
Box Folder
1 14 Board of Directors Special Meeting minutes, 1999 June 28
Box Folder
1 15 Finance Committee minutes (partial), 1999 August 9
Box Folder
1 16 Finance Committee minutes, 1999 October 11
Box Folder
1 17 Executive Committee minutes, 1999 October 20
Box Folder
1 18 Finance Committee materials, 1999 December 13
Box Folder
1 19 Finance Committee minutes, 2000 February 7
Box Folder
1 20 Finance Committee minutes, 2000 May 1
Box Folder
1 22 Executive Committee minutes (partial), 2000 June 22
Box Folder
1 21 Board of Directors resolutions, 2000 May 2
Box Folder
1 23 Finance Committee minutes, 2000 August 7
Box Folder
1 24 Finance Committee minutes, 2000 October 6
Box Folder
1 25 Board of Directors minutes, 2000 October 10
Box Folder
1 26 Board of Directors, additional meeting materials, 2000 October 7
Box Folder
1 27 Board of Directors materials, 2000 December 12
Box Folder
1 28 Board of Directors Special Meeting minutes, 2001 January 29
Box Folder
1 29 Finance Committee Minutes, 2001 February 12
Box Folder
1 30 Board of Directors minutes, 2001 February 13
Box Folder
1 31 Board of Directors, draft copy of minutes, 2001 February 12
Box Folder
1 32 Executive Committee minutes (partial), 2001 March 12
Box Folder
1 33 Finance Committee minutes, 2001 April 30
Box Folder
1 34 Board of Directors minutes (folder #1), 2001 May 1
Box Folder
1 35 Board of Directors minutes (folder #2), 2001 May 1
Box Folder
1 36 Board of Directors minutes (folder #3), 2001 May 1
Box Folder
1 37 Board of Directors minutes (partial), 2001 June 13
Box Folder
1 38 Joint Meeting of Audit, Compliance & Finance Committees, minutes, 2001 August 13
Box Folder
1 39 Board of Directors minutes, 2001 August 13-14
Box Folder
1 40 Board of Directors minutes, summaries, 1997 February 10-2002 March 14
Box Folder
1 41 Board of Directors minutes, summaries, 2000
Box Folder
1 42 Board of Directors, weekly update reports and meeting notices, 1999-2002
Box Folder
1 43 LJM Investments, Annual Partnership Meeting, 2000 October 26
Box Folder
1 44 Enron Financial Presentation, 2nd Quarter of 2001, 2001
Box Folder
2 1 Arthur Andersen, Enron memoranda, 1999 December-2001 October
Box Folder
2 2 Whitewing packet, board minutes and materials, December 1997 - October 2001
II. Prep Materials, Herbert S. Winokur, Jr., 1997-2001
Box Folder
2 3 Executive Committee minutes (partial), Project Theresa, 1997 March 25
Box Item
2 1 Finance Committee minutes and materials, Project Theresa, 1997 May 5
Box Item
2 1 Board of Directors minutes (partial), Project Theresa, 1997 May 6
Box Item
2 1 Finance Committee minutes, Project Steele, 1998 February 9
Box Item
2 1 Finance and Audit Committee, joint meeting minutes, Project Steele, 1998 February 9
Box Item
2 1 Operating & Strategic Plan: 1998-2000 Board of Directors presentation, Project Steele, 1997 December 9
Box Item
2 1 Executive Committee minutes, Project Tomas, 1998 March 2
Box Item
2 1 Board of Directors Minutes & Y2K readiness material, Mr. Causey's presentation, 1998 December 8
Box Item
2 1 Finance Committee minutes, Subsidiary Preferred Stock Financing, 1999 December 13
Box Item
2 1 Finance Committee minutes, Project Tammy, 2000 August 7
Box Item
2 1 Finance Committee minutes with presentation, Chief Financial Officer report, 2000 August 7
Box Item
2 1 Board of Directors minutes, Minority Financing Vehicle, 2001 May 1
Box Item
2 1 Finance Committee minutes (partial), 2001 August 13
Box Item
2 1 Finance Committee minutes, Nahanni, 2001 August 13
Box Item
2 1 Finance, Audit & Compliance Committees, joint meeting minutes, 2001 August 13
Box Item
2 1 Board of Directors draft minutes and materials including Mr. Causey's Financial and Earnings report, 2001 October 10
Box Item
2 1 Audit & Compliance Committee draft minutes and materials, 2001 November 5
III. Bound Files used by Department of Justice, 1997 August-2001 October
Box Item
2 2 Coda Energy files compiled by the Department of Justice, 2002 September
Box Item
2 2 Ken Lay's Line of Credit files compiled by the Department of Justice, 2002 September
Box Item
2 2 Marlin Water Trust files compiled by the Department of Justice, 2002 September
Box Item
2 2 Nigerian Barges files compiled by the Department of Justice, 2002 September
Box Item
2 2 Project Braveheart files compiled by the Department of Justice, 2002 September
Box Item
2 2 Hawaii 125-0 files, 2002 September
IV. Key Transactions Notebooks, 1997 October-2002 March
Box Item
3 3 Timeline of events surrounding Andersen Document Destruction, 2001 October-November
Box Item
3 3 Audit & Compliance Committee minutes, 1997 October 13
Box Item
3 3 Executive Committee minutes and materials (partial), 1997 November 5
Box Item
3 3 Board of Directors minutes (partial), 1997 December 9
Box Item
3 3 Audit Committee minutes, 1998 February 9
Box Item
3 3 Audit & Compliance Committee minutes, 1998 October 12
Box Item
3 3 Audit & Compliance Committee minutes, 1999 February 7
Box Item
3 3 Board of Directors minutes, 1999 June 28
Box Item
3 3 Audit & Compliance Committee minutes, 1999 August 9
Box Item
3 3 Audit & Compliance Committee minutes, 1999 October 11
Box Item
3 3 Finance Committee minutes, 1999 October 11
Box Item
3 3 Board of Directors minutes, 1999 October 11
Box Item
3 3 Audit & Compliance Committee minutes, 2000 February 7
Box Item
3 3 Board of Directors minutes (partial), 2000 February 7
Box Item
3 3 Audit & Compliance Committee minutes, 2000 May 1
Box Item
3 3 Finance Committee minutes, 2000 May 1
Box Item
3 3 Board of Directors minutes (partial), 2000 May 2
Box Item
3 3 Executive Committee minutes (partial), 2000 June 22
Box Item
3 3 Audit & Compliance Committee minutes, 2000 August 7
Box Item
3 3 Finance Committee minutes, 2000 August 7
Box Item
3 3 Board of Directors minutes (partial), 2000 August 7
Box Item
3 3 Audit & Compliance Committee minutes, 2000 October 6
Box Item
3 3 Finance Committee minutes, 2000 October 6
Box Item
3 3 Board of Directors minutes (partial), 2000 October 7
Box Item
3 3 Audit & Compliance Committee minutes (draft), 2001 February 12
Box Item
3 3 Finance Committee minutes, 2001 February 12
Box Item
3 3 Audit & Compliance Committee minutes, 2001 April 30
Box Item
3 3 Board of Directors minutes (partial), 2001 August 13
Box Item
3 4 Securities & Exchange Commission Form 10-Q Report, 2001 September 30
Box Item
3 4 Form 8-K Report, 2001 November 9
Box Item
3 4 Arthur Andersen memo, notification of threatened or actual litigation, 1999 October 31
Box Item
3 4 Arthur Andersen memo, Retention and Destruction Policy, 2000 February 1
Box Item
3 4 David Duncan email regarding Enron's retention meeting, 2001 February 6
Box Item
3 4 Ken Lay's email to employees regarding Jeff Skilling resigning as CEO, 2001 August 14
Box Item
3 4 Sherron Watkins memo of serious accounting concerns to Ken Lay, 2001 August 15
Box Item
3 4 James Hecker and Arthur Andersen memo to file regarding a discussion with Sherron Watkins about questionable accounting practices at Enron, 2001 August 21
Box Item
3 4 Ken Lay's email to employees regarding 2001 Special Stock Option Grant, 2001 August 27
Box Item
3 4 Margaret Ceconi's whistle blowing email to Ken Lay, 2001 August 29
Box Item
3 4 Human Resources email to All Employees regarding Enron 401(k) Savings Plan, 2001 September 27
Box Item
3 4 Mark Zajac email to David Duncan and Arthur Andersen regarding Fido Fraud Test results, 2001 October 9
Box Item
3 4 Nancy Temple email to M.C. Odom, Arthur Andersen regarding retention policy, 2001 October 12
Box Item
3 4 Vinson & Elkins (V&E) report to J.V.Derrick, Enron General Counsel regarding preliminary investigations, 2001 October 15
Box Item
3 4 Draft of David Duncan's memo to "file" regarding concerns of press release terminology (two drafts slightly different), 2001 October 15
Box Item
3 4 Nancy Temple's email to David Duncan regarding 3rd quarter press release, 2001 October 16
Box Item
3 4 R. Corgel's email to David Duncan regarding 3rd quarter press release, 2001 October 17
Box Item
3 4 David Duncan's appointment calendar, 2001 October 22-28
Box Item
3 4 Enron press release "Enron Announces SEC Request, Pledges Cooperation," 2001 October 22
Box Item
3 4 Nancy Temple's handwritten notes including "Retained V&E," 2001 October 23
Box Item
3 4 Core Consultation conference call agenda, 2001 October 23
Box Item
3 4 Enron email titled "Regarding Document Preservation," 2001 October 25
Box Item
3 4 Enron email regarding Employee Savings Plan, 2001 October 25
Box Item
3 4 Sabrina Scott's email to David Duncan email regarding an "Important Announcement Regarding Document Preservation," 2001 November 1
Box Item
3 4 Nancy Temple's email, "Procedures for Responding to Subpoenas and Litigation," 2001 November 10
Box Item
3 4 Arthur Andersen's press release "Andersen Announces Preliminary Enron-Related Disciplinary and Administrative Actions, 2002 January 15
Box Item
3 4 Kenneth Lay's resignation letter and report on Lay's executive employment termination compensation and additional forms and summaries, 2002 January 23
Box Item
3 4 Written statement and hearing testimony of Robert K. Jaedicke to the Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce, US House of Representatives, 2002 February 7
Box Item
3 4 Kenneth Lay's stock sales information, 2002 March 2
Box Item
3 4 Criminal Indictment of Arthur Andersen (U. S. vs. Arthur Andersen LLP), 2002 March 7
Box Item
3 4 Enron Form 10Q and EES restatement, 2001 March 31
Box Item
3 4 Enron Code of Conduct, undated
Box Item
3 4 Chewco Investments L.P. Restatement, undated
Box Item
3 4 Rhythms Restatement (LJM Cayman L.P., Rhythms NetConnections Inc.), undated