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Powerful Figures Behind Firm's Rise--and Crash

Management: Enron executives built a small energy company into a giant and have become focal points of inquiries into its collapse.


They engineered financial deals that pushed accounting rules to the limit. They saw markets to deregulate and harnessed the political muscle to take them over.

They dominated oil and gas trading markets and then branched out to deal in everything from pollution credits to bets on the weather.

Now, the best and brightest of Enron Corp.--a mostly young, well-paid crowd that moved through energy and political circles with confidence--are facing lawsuits, subpoenas and possibly criminal indictments as Congress, federal agencies and regulators investigate the biggest business collapse in U.S. history.

With Enron's crash, the company's top brass largely has retreated to plush Houston suburbs from Sugar Land to Bellaire to Humble and are letting their lawyers do the talking while the investigations run their course.

Here are some of the key players in the Enron saga, current and former executives who rode the rocket up and are expected to figure large in the lawsuits and investigations triggered by the collapse.

Kenneth L. Lay

Enron's 59-year-old chairman and chief executive, who resigned under fire Wednesday, took a dinky natural gas pipeline firm and built it into a powerhouse that was a new kind of energy company.

Enron made its money not from pipelines and power plants, but by trading natural gas and electricity and, eventually, a host of more esoteric products such as water, financial havens from bad weather, pollution credits, advertising and broadband Internet time, all supplied by others.

The son of a poor Missouri country preacher, Lay sermonized on the benefits of bringing competition to a wide range of commodities. By bringing together millions of buyers and sellers, Enron could squeeze out the best prices and make a tidy profit. Supplies of electricity, for example, and other commodities would be allocated more efficiently and costs would be reduced.

Lay, who has a doctorate in economics from the University of Houston, saw the promise of natural gas deregulation in the 1980s and electricity deregulation in the 1990s. Enriched by success, he became a big political fund-raiser, an advisor to both Bush administrations and an architect of national energy policy.

In California, Lay tried to shape the state's deregulation policy in the mid-1990s and then influence how the energy crisis was untangled. Politicians and regulators lumped Enron in with a gang of out-of-state energy companies accused of gouging California electricity users and driving its two biggest electricity utilities to the edge of ruin.

Lay's temper could be short and his memory long. Financial analyst John Olson recently told a Houston audience that when he questioned the value of Enron's assets last summer, Lay sent a note reading: "John Olson has been wrong about Enron for over 10 years and he is still wrong. But he is consistent." Olson framed the letter.

Through Enron's stunning downward spiral, two views of Lay emerge: He was an isolated statesman, insulated from financial trickery perpetrated by underlings. Or he was a hands-on manager who knew what was going on.

In Enron's restatement of earnings in November, slashing nearly $600 million from the bottom line over nearly five years, Lay kept up his cheerleading in the face of mounting investor skepticism, saying the company would continue its efforts "to respond to investor requests for information about our operational and financial condition so they can evaluate, appreciate and appropriately value the strength of our core businesses."

"Maybe he's a bumbling figurehead," an energy consultant said. "Or maybe he just played the good old boy and he's the shrewdest guy on the planet."

Jeffrey K. Skilling

Skilling, a competitive bicycle rider, was on the ride of his life as chief executive of Enron. But he stunned the energy industry Aug. 14 when he resigned after only six months on the job.

Skilling called it a "purely personal decision" that had "nothing to do" with Enron, but many in and out of the company wondered why Skilling, 48, would walk away from a job he had long coveted.

Lay brought Skilling to Enron in 1990 from the McKinsey & Co. consulting firm, where Skilling had handled the Enron account. Enron had hit a rough patch because of plummeting natural gas prices, and Skilling had a vision of Enron as a nimble trading company that didn't need hard assets to make money.

The company grew quickly under Lay and Skilling and constantly pushed into new markets, including some that turned sour, such as a retail energy venture, its water business, telecommunications and a huge power project in India.

Skilling, named president and a company director in 1996, was the brash bad cop to Lay's good cop and corporate visionary role.

In 1997, an unfounded rumor swept Wall Street that oil giant Royal Dutch/Shell Group would make a bid for Enron. Asked what he'd do if Shell bought his company, Skilling shot back, "I'd run Shell."

At that time, Enron was about one-fifth Shell's size.

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