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The New Power / 'THEY GET IT' / Enron displays political savvy in access to
decision-makers Houston Chronicle, 04/15/01 THE NEW POWER / Enron / Making of the Market-maker / Pipeline operator evolved into player that keeps raising bar Houston Chronicle, 04/15/01 THE NEW POWER / Enron / Making of the Market-maker / With ups and downs, Enron Broadband is a work in progress Houston Chronicle, 04/15/01 THE NEW POWER / Enron / Making of the Market-maker / The project Houston Chronicle, 04/15/01 SIGN OF THE TIMES / Glowing logo once hovered over the city that oil built Houston Chronicle, 04/15/01 THE NEW POWER / Returns on investments too slow in developing nations Houston Chronicle, 04/15/01 THE NEW POWER / Working environment now driven more by new ideas than old doctrine Houston Chronicle, 04/15/01 THE NEW POWER / Firm in a hurry to get into new downtown tower Houston Chronicle, 04/15/01 THE NEW POWER / Current lineup Houston Chronicle, 04/15/01 THE NEW POWER / Enron's chronology Houston Chronicle, 04/15/01 GRASS-ROOTS BUSINESS Oil-Patch Epicenter, Embracing the Web The New York Times, 04/15/01 Sierra Pacific Suspends Quarterly Payout Because of Energy Crisis in Western States Dow Jones Business News, 04/15/01 India: Report cautions Maharashtra on PPAs The Hindu, 04/15/01 Graft vs graft: Political scene in state hits nadir The Times of India, 04/15/01 In an energy crisis, lean toward the green The News & Observer Raleigh, NC, 04/15/01 A The New Power / 'THEY GET IT' / Enron displays political savvy in access to decision-makers DAVID IVANOVICH, Houston Chronicle Washington Bureau Staff 04/15/2001 Houston Chronicle 4 STAR 1 (Copyright 2001) WASHINGTON - When then-candidate George W. Bush needed a plane to shuttle his staff around on the campaign trail, corporations scrambled to offer up their private jets. The Bush camp was eager to fly the friendly skies of Enron Corp. When former Secretary of State James A. Baker III was out of a job at the end of the first Bush administration, Houston-based Enron had some consulting work waiting. And when then-President Clinton, ex-President Ford and golfing legend Jack Nicklaus needed a fourth, Enron Chairman Ken Lay was available to play a round of 18 holes. Here, in a town where access to the political elite is everything, Enron is master of the game. Other companies contribute to political campaigns, hire former insiders and hobnob with politicos, but few do so on a par with Enron. "They get it," noted Andrew Wheat, research director for Texans for Public Justice, an Austin-based watchdog group and frequent Enron critic. "They understand how it works and . . . how things get done, both here and abroad. "I can't think of another company in Texas that compares." In part, Enron's political smarts are an outgrowth of the company's business strategy, to be first in an emerging market even as the rules of the game are being formulated. The company's shrewdness also is a reflection of Lay's own personality, his experience in government and his affinity for politics. And now, thanks to his longtime association with - and munificent contributions to - President Bush, Lay is the envy of corporate America. Access to decision-makers in both parties, however, does not always translate into favorable decisions. Enron's recent lobbying efforts have yielded rather mixed results. Consider: The new Bush administration has taken a largely hands-off approach to the electricity crisis in California, heeding the advice of power wholesaler and marketer Enron. But Enron's broader objective, national deregulation of the power industry, remains stalled on Capitol Hill. Enron officials support the Republicans' vision of a smaller federal government. But the Bush White House has proposed whacking the budgets of two federal agencies Enron has relied upon repeatedly, the Export-Import Bank of the United States and the Overseas Private Investment Corp. Bush, much to Lay's surprise, pledged to try to force power plants to curb their carbon-dioxide emissions, the main greenhouse gas implicated in global warming. That policy could have created a vast growth market for Enron, whose business benefits from construction of more natural-gas-fired plants that emit less carbon dioxide. But last month, Bush flip-flopped on that promise. According to all conventional wisdom inside the capital Beltway, Enron should not be suffering political setbacks now. Lay, a former Naval officer and one-time energy policy-maker during the Nixon administration, is one of Bush's longest and staunchest supporters. An ally of the elder George Bush, Lay worked closely with George W. Bush during the Republican National Convention in Houston in 1992, when Lay co-chaired the host committee. They met up again during the site-selection process for the senior Bush's presidential library. As the younger Bush became a force first in Texas and then in national politics, Lay and other Enron officials emerged as perhaps the biggest contributors of his political career. By July 1999, with Bush's run for the presidency just getting under way, Enron officials had already contributed more than $550,000 to him, according to the Center for Public Integrity. Bush and Lay never became fishing buddies or bird-hunting pals. But then-Gov. Bush did appoint Lay to head his governor's business council. And he dubbed Lay with a series of nicknames, including "Kenny Boy." Lay didn't forget Bush during the presidential race. He was one of the 214 Bush "Pioneers," supporters who raised at least $100,000 for the candidate, and also ponied up cash for Bush's Florida recount battle. For the inaugural festivities, Lay, Enron Chief Executive Jeff Skilling and the corporation itself each contributed the maximum $100,000. But Lay says he didn't contribute so heavily to Bush in the hopes of getting something out of him. Instead, he believed in him as a candidate. "He's smart," Lay said. "He's got good values. He's got family values. . . . He's a man of character and integrity, just like his father." Bush also shares Lay's vision of deregulated, competitive markets. "My basic philosophy is very much in tune with his basic philosophy," Lay said. After the election, Lay was frequently mentioned as a possible candidate for both energy and Treasury secretary. He has also been advising the Bush team on energy policy. Lay's political star, however, didn't rise just with Bush's relocation from Austin to Washington. Despite his strong GOP credentials, Lay was a frequent visitor at the Clinton White House, helping to host the Brazilian president, advising the Democratic administration on trade policy and brainstorming on global warming. Lay was on good terms with all three Treasury secretaries under Clinton - Lloyd Bentsen, Robert Rubin and Larry Summers - as well as White House Chief of Staff Thomas "Mack" McLarty and former Energy Secretary Bill Richardson. To handle the day-to-day political work, Enron doesn't hesitate to hire some of the heaviest hitters on the political scene. The company's list of political consultants has included: Bill Paxon, a former conservative leader in the House; Ralph Reed, one- time head of the Christian Coalition; former Sen. J. Bennett Johnston, D-La., and Elizabeth "Betsy" Moler, former chairwoman of the Federal Energy Regulatory Commission and one-time deputy energy secretary. The company's board of directors includes Wendy Gramm, former head of the Commodity Futures Trading Commission and wife of Senate Banking Committee Chairman Phil Gramm, R-Texas, and John Wakeham, Britain's former energy minister. Back in the early 1990s, within weeks of the end of the first Bush administration, Enron hired Baker and former Commerce Secretary Robert Mosbacher. The move sparked controversy when Baker, who as secretary of state had helped forge the international coalition that expelled Iraqi troops from Kuwait, was visiting a liberated Kuwait lobbying on Enron's behalf. Government watchdogs have long decried the "revolving door" between top government jobs and the corporate world. Wheat of Texans for Public Justice said Enron keeps that door "spinning." More recently, Enron angered right-wing partisans on Capitol Hill when it hired Linda Robertson, a former assistant Treasury secretary in the Clinton administration and a Democrat, to run the company's Washington office. Lay is not apologetic. "We don't discriminate based upon color or creed or race or religion or sex," Lay said. "We also don't discriminate based upon political preference." Unlike many other companies, which are shy of government involvement, Enron does not hesitate to use the resources of the federal government to boost exports and win contracts overseas. Commerce secretaries, for example, routinely take U.S. businesses on international road shows, hoping to use Uncle Sam's political influence to win business for American firms. During the Clinton years, Enron executives accompanied commerce secretaries on at least seven such trips, government records show. The Overseas Private Investment Corp. provides political risk insurance and project financing to U.S. companies doing business overseas. Enron has been one of the agency's biggest customers. And since the end of the Cold War, U.S. diplomats have become much more involved in advocating for American firms. While other companies have been slow to seek out the State Department's help, "Enron was in step with that change," noted McLarty, a former natural-gas-company executive and an expert on Latin American trade. Closer to home, deregulation of the electric-power industry tops the company's domestic political agenda. To date, electricity deregulation has progressed piecemeal, state by state. Bills in Congress to deregulate the industry nationwide have gone nowhere. Enron officials were able to enlist the support of the Clinton administration, but the legislation failed to move on Capitol Hill, largely because of personalities and turf issues. "It didn't come to fruition, not because of Enron but because of a lack of leadership on the issue, particularly in the House," said Moler, the former Energy Regulatory Commission chairwoman. "Enron was very effective, even though they didn't get the ball across the finish line, in terms of advocating a pro-competition agenda." Now, there's a new Congress and a new occupant of the Oval Office, a pro-competition advocate who oversaw the deregulation of the Texas power market. But Enron's hopes of a national deregulation bill dimmed as the lights flickered out in California. While energy experts can think of numerous reasons why California's energy crisis was largely of its own making, the rolling blackouts there have caused other states to slow their deregulation efforts for fear of similar troubles. Even politically savvy Enron may have a tough time pulling out a victory from those ashes. Photo: 1. Jim Crownover, left, and his wife, Molly, welcome former President Bush and Enron Chairman Ken Lay at their home in February 2000. The United Way of the Texas Gulf Coast honored the Alexis de Tocqueville Society during a reception for major donors at the Crownovers' residence (p. 19); Mugs: 2. Lloyd Bentsen (p. 19); 3. J. Bennett Johnston (p. 19); 4. Bill Paxon (p. 19); 5. Ralph Reed (p. 19) Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. BUSINESS THE NEW POWER / Enron / Making of the Market-maker / Pipeline operator evolved into player that keeps raising bar MICHAEL DAVIS Staff 04/15/2001 Houston Chronicle 2 STAR 1 (Copyright 2001) AT ENRON CORP., it came to be known as the "Come to Jesus" meeting. This gathering in late 1988 had nothing to do with religion, but everything to do with a leap of faith. Top management, about 70 in all, met to find out where their company was headed. They were told to expect a big change. At the meeting led by Rich Kinder, who would soon become Enron's president, they were briefed on the company's new strategy. Like the unredeemed at a revival meeting, the leaders of the then-stodgy natural gas pipeline company were told they had to change their ways. Rather than stick to only the safe and highly regulated gas pipeline business, Enron officials were about to stake their company's future on the unregulated part of the business and look for opportunities worldwide. "The decision was made that we needed to move quickly," said Ken Lay, Enron chairman. "And if we were going to be a leader, we were going to have to go after it. If not, other people would." The gravity of the moment was not lost on those present. These veterans of the regulated pipeline business were now working for a company that was heading into uncharted territory. Many in the room would be gone from the company within months, replaced by younger executives who were more open to change. "They may talk about it casually now, but at the time they were sweating bullets," said Robert Bruner, executive director of the Batten Institute at the University of Virginia, who teaches a case study on Enron's evolution to executives. The company has made its mark by being in the vanguard of change. Since that fateful meeting in the late 1980s, it has shown over and over again that it has a knack for knowing when to exit a declining market and move on to the next one. Now the the pipeline business has moved into the background at Enron. Enron now profits mainly by making it easier to buy and sell things that otherwise would be difficult to market - a process the company calls "making markets." "They have shown they can trade almost anything and have a compelling need to dominate any market they go into," said John Olson, an energy analyst with Sanders Morris Harris in Houston. "They do it with a sort of Gulf War military doctrine of using overwhelming force, technology and people, going in with a blitzkrieg to get the best of the market and move on." That statement could serve as a summation of Enron's business strategy during its period of explosive growth that made it the first Houston-based company to post annual revenues of $100 billion a year. Most of the time the approach has paid off, with only a few major missteps. Enron has been in the forefront of sea changes numerous times, and not just in the energy industry. When Houston Natural Gas was bought by InterNorth, creating Enron, it formed the first nationwide interstate natural gas pipeline system. The company created the first futures market for natural gas with its Gas Bank - allowing users to buy and sell gas for future delivery - years ahead of the first futures contract to trade on the New York Mercantile Exchange. It also developed many of the methods of hedging natural gas costs that are used today to reduce the risk of price swings. Enron's pipeline was the first system to offer its interstate pipeline to transport anyone's gas for a fee. Now, all interstate pipelines are run in that fashion. The company's $2 billion power plant project in India is the largest single outside investment ever made in that country. The company moved quickly to become a player when California lawmakers voted to open that state to electricity supplier competition, and soon changed its plans to limits its risks there. In 1996, Enron became the first natural gas pipeline company to buy an electric utility, Portland General Electric in Portland, Ore. Enron OnLine, the company's Internet trading site at enrononline.com, has, in only a year or so of operation, become the largest e-commerce site in the world. Now, Enron makes 80 percent of its profits from businesses that did not exist in 1988, the huge wholesale markets that have developed for natural gas and electricity-marketing, broadband, fiber-optic and energy services. "It seems like they do everything," said David Nemtzow, president of the Alliance to Save Energy, a nonprofit energy conservation group. "$100 billion (in annual revenues) is nothing to sneeze at. Exxon Mobil was founded by John Rockefeller, Enron's only been around for 15 years." Enron still trails Exxon in size, since the biggest company in the oil business had $233 billion in revenues last year, and it is not be as well known as John D. Rockefeller. But its influence is becoming almost as pervasive as his once was. The company was one of the largest contributors to the campaign of President Bush and Lay is considered one of the president's closest private-sector advisers on energy policy. He is personal friends with both the president and his father. The company has equally strong ties to Democrats, including access to former President Clinton. But at the same time, Enron's role in deregulation in the United States and globalization have made it a target for protesters who blame private energy companies for the deregulation fiasco in California and U.S. multinationals for a wide array of troubles overseas. And the company which has been leader in this business, is regularly racing against a pack of competitors, including Houston- based El Paso Corp. Reliant and and Dynegy. Kinder, who declined to be interviewed for this story, left when it became apparent he wouldn't become CEO and started his own energy company Kinder Morgan. "You really can't copyright or patent this sort of stuff," said Jeffrey Skilling, Enron's chief executive officer."This is like an arms race where the arms are brains. You need smart people that are constantly thinking up the next things the customer needs. "What a change from the gas business 25 years ago, when the whole name of the game was good regulatory lawyers," Skilling said. Now, its future depends on a continuing willingness to take chances on new things, and when things aren't working, to spend what it takes to change them. "Maybe that's a lesson we all learned: There is usually no second best; it's winner take all and you better get in there and you better fight your best battle because it's pretty hard to play catch-up," Skilling said. ... Surviving the culture clash The executives who were called to the Come to Jesus meeting already had survived three years of tumult. Even Ken Lay, who was behind that message, had his doubts about the whole enterprise in the beginning. He was there because of a contract he had signed that he likened to having his hands glued to the steering wheel. The merger of Omaha, Neb.-based InterNorth and Houston-based Houston Natural Gas created a company that was mired in debt and had to battle corporate raiders. The employees from the companies that formed Enron clashed as well. "That first year after the merger was kind of interesting," Lay said, in a characteristic understatement. He described the corporate culture battle in those early years as "bloody." Bill Brendler, an organizational psychologist who was brought in to help combine the companies' cultures, recalls going to Omaha after the merger and not hearing anyone refer to the new company as Enron. All of the InterNorth people were still calling the company by its former name. "It was kind of gut wrenching to them, like they had been sold out," said Brendler, who operates a consulting company based in Austin. The merger had left the new company with a mountain of debt. It was one of the first big junk bond mergers engineered by Michael Milken. The company's financial woes got even worse around Christmas 1985, when the Peruvian government nationalized all of the company's oil and gas properties in that country, depriving Enron of its main sources of cash flow. Then, in January 1986, oil prices collapsed from $30 per barrel to $10. To add to the company's problems, it came under fire from raider Irwin Jacobs, who led a group that held about 15 percent of Enron's stock. In a bid to fend off Jacobs' group, Enron considered going private. They turned to one of the most high-profile takeover partnerships of the time, Kohlberg Kravis Roberts & Co., to look into financing a deal to buy all its publicly traded shares. That deal came, "very, very close," Lay said. Eventually, the company ended the takeover threat by buying back Jacobs's shares. All this was going on as the company's top management was in a state of flux. Lay was named chief executive officer in November 1985 and elected chairman in a February board meeting that he still recalls vividly today. Lay had recommended that Bill Strauss, former InterNorth chairman and chief executive officer, come on as chairman. "I thought it would sort of pull the teams together," Lay said. "He could give me air cover in Omaha." In retrospect, Lay said, his recommendation probably heightened the battle between the rival groups of employees. Strauss, too, soon realized that there was room at the top for only one. Before the company's February 1986 board meeting in Winter Park, Fla., Strauss had persuaded Lay to tear up his contract with a golden parachute, which would have paid him handsomely if he left the company, in return for incentives in stock options. "He wanted to make sure I was committed to the company and I was because I had no choice," Lay said. "They sort of glued my hands to the steering wheel." Strauss called the board meeting to order and resigned on the spot, stunning Lay and everyone else in the room. He recommended the board elect Lay chairman and CEO. He then said, "I'll see you around," walked out of the room, drove to the airport and caught a flight back to Omaha. After about 30 seconds of silence, one of the former InterNorth directors nominated Lay to be chairman, another seconded it and they voted on it. "There I was," Lay said, laughing. "Just totally prepared for it." ... Learning from near-disaster Enron took the leap into the volatile world of deregulated energy markets in spite of a trading fiasco that could have pushed the company to the brink of bankruptcy. In 1987, Enron was rocked by the disclosure that rogue traders at its Enron Oil Co. had left the company holding the bag for about $1 billion in trading liabilities. Before disclosing it to the market, the company worked the trading loss down to about $142 million. The experience was one Lay and others at the company would not forget. But rather than losing faith in making markets, this was a lesson that shaped the way the company is run. "We learned a lot, certainly in a bad way," Lay said. "We put in place probably the best risk management and control system, not just in our business, but in any industry." The company has become a leader in developing risk management strategies, offering hedges on everything from weather derivatives to advertising space. Many of these techniques were developed during the late 1980s with the guidance of a former consultant at McKinsey & Co., Jeffrey Skilling. It was Skilling, among others, who came up with the idea for Enron to create The Gas Bank, a unique concept of packaging natural gas supplies so they could be bought on a long-term basis for fixed prices to suit an individual customer's needs. "It was the first forward pricing structure for natural gas," Skilling said. The idea was to gather gas supplies on one end of the pipeline, customers on the other, and then put together deals to serve both sides' needs. It worked like this. From the overall production of a well or field, the company would sell parts of the production to different customers - an industrial customer might buy a portion of the production for a year, while a local gas distribution company might buy a share of the production for two or three years, and a power producer might buy a 10-year supply. At the time, power producers were desperate to get long-term, fixed-price supplies of natural gas. "It was very successful for us and it made it clear that there was a whole new way of thinking about this business," Skilling said. "We were creating a forward market in 1988," he said, describing that year as "a magical time." The company began developing package deals for its customers. One of the first major customers was Peoples Gas Co., the utility company that serves Chicago, which traditionally had relied on a huge supply organization. "They were buying capacity on pipelines and in storage fields, buying gas from producers with a massive organization," Skilling said. "We went to them and said, give us all of that stuff, we'll manage it for you. Then all you have to do is call us in the morning and tell us how much gas you need and we will have it ready." From The Gas Bank, Enron eventually set up Enron Gas Marketing, and they started bidding, mainly on spot transactions. It was the genesis of Enron's massive wholesale trading operations today. It was also around this time that the company began to move into energy financing. After the bust of 1986, banks had pulled out of the energy lending business and Enron believed it could make money by filling that void. What had begun as a gas marketing unit also was now engaged in venture finance. Enron Gas Marketing became Enron Capital and Trade Resources, with Skilling at the helm. He later would become head of Enron North America, over all of the company's domestic operations. When Enron's natural gas wholesale business began, there were about 70 employees. Now, including power sales, there are 5,000. "We always kidded that Enron Capital and Trade Resources sounded kind of complicated, but no matter what we named it, within six months, everyone else in the industry had one just like it," Lay said. ... Portrait of Ugly American Enron's foray into unregulated overseas markets has been largely successful, but when it has gone bad, it has gone very bad. The company has built some of the largest power projects and pipeline systems in international markets over the past 10 years or so, but in the process it often has been portrayed as the Ugly American corporation by critics who accuse it of spreading around payoffs and showing little regard for human rights or the environment. Enron has responded that those allegations are unfounded, but has made changes in its international business that have moved it away from those confrontations. It began testing its plan to build an international business in 1988, when it established an operation to build gas-fired electric generating plants in the United Kingdom as that country's electricity markets were privatized. "We were beginning to get a little momentum from the standpoint of stepping outside of our regulated business in North America and even stepping outside of North America a little bit," Lay said. "But we still had to demonstrate that we could do it without great risk. That was a fairly important part of those early days." As Enron branched out into international markets, the executive who took the international reins was a woman who stood out in the largely male domain of the energy business. Her name was Rebecca Mark. Mark, who declined to be interviewed for this story, became one of the stars at Enron after she successfully saw through to completion the company's controversial Dabhol power plant project in India. Enron bought a 65 percent share in the Dabhol Power Co. back in the early 1990s. Enron believed it could replicate the success it had had in England with its massive Teesside power plant in the United Kingdom. The political landscape in India, however, proved to be far more daunting. The $2.9 billion project became a political nightmare for Enron. After a change in the ruling party, the project was halted amid accusations that Enron had a sweetheart deal with the previous regime to build the plant. That standoff led to construction delays at the huge project that were costing Enron a small fortune. Mark got the job of leading the effort to renegotiate the deal to get the plant construction back on schedule. In an interview she gave in early 1997, Mark said "People thought we were pushy and aggressive. But think of the massive bureaucracy we had to move. How do you move a bureaucracy that has done things one way its entire collective life? You have to be pushy and aggressive." Adding to the project's bureaucratic difficulties were mass protests from nearby villagers. Enron was accused of human rights abuses because of the tactics used by local police the company hired as security. Human Rights Watch and Amnesty International accused Enron's security guards of beating villagers who protested the project. Enron said the accusations about human rights abuses in a report released in early 1999 were false. In the wake of those allegations, Enron hired a human rights director to handle concerns at its global operations. Eventually, Mark renegotiated the deal and phase one of the plant was completed and went into operation. This victory gained her international attention and led to her being named vice chairwoman at Enron. But she gained attention largely because of the business she had chosen for her career. She was a single mother who had risen to the top in the energy business. Enron liked to portray her as evidence that it was a new kind of energy company in which everyone had a chance to prosper. As a rising star, Mark was tapped to head up the company's effort to get into the international water utility business. It would prove to be her undoing as Enron shifted from owning lots of physical assets, which was the side of the business where Mark had made her name, and into its so-called asset-lite strategy. The problems she dealt with in India have not been resolved; they have resurfaced in another form. The company is not getting paid for power because it's said to be too expensive. Enron officials maintain that they are sticking behind the project, even going so far as to warn Indian politicians that taking on Enron will be "like playing chicken with a brick wall." But analysts question how long they can last. "Clearly India has been a political hot potato," for Enron, said Carl Kirst, an analyst with Merrill Lynch Global Securities in Houston."They've continued to put one foot in front of another against almost gale-force winds. Sometimes it's not worth the uphill battle." The company is reportedly looking to sell its stake in the Dabhol project to either Reliance, one of India's largest industrial concerns, or China Light and Power Co. There is some doubt as to whether the project would command full value given all of the political problems at the plant. An Indian observer is more blunt on the subject. "India is not a place where their fortunes lie," says analyst Subhash Agarwal, editor of India Focus, a political risk magazine. ... The power of electricity Once Enron had become a dominant player in the unregulated natural gas business, the company set its sites on a new market: electricity. It was in many ways much more of a gamble than the company's move into unregulated natural gas markets. The electricity business was even more entrenched in regulation than gas had been. And it was being deregulated in a piecemeal fashion, state by state, instead of through a federal regulatory process like the one that covered gas. Yet when describing it, Lay makes it sound simple. "We just took the model that Jeff and his team developed in the early 1990s for wholesale North American natural gas and began to move it out to other markets." Lay said. In 1997, the company made its first major move on domestic electricity markets when it bought Portland General Corp., the parent company of Portland General Electric, the utility serving Portland, Ore. The purchase gave the company a beachhead into the soon-to-be- opening California market and a marketing arm on the West Coast. Three years after buying Portland General, though, the nation's electricity markets had changed to the point where Enron decided to sell the electric company. The company realized it no longer needed an electric utility to be a major player. It was another of many lessons for Enron that making markets, not owning physical assets, was where its future lay. In many ways, Enron's experience in California has been a textbook example of how they quickly move out of a market when an investment is not living up to expectations. In California, the company avoided getting involved in that state's energy crisis because it chose not to buy power plants there, but rather stick to offering services and selling power on the wholesale markets. "Because it does not own generation in the region, Enron is not forced into power trades with the utilities the way the California wholesale generators have been," said Jeff Dietert, analyst with Simmons & Company International in Houston. The company realized soon after the California market opened in March 1998 that the legal framework was flawed and was a recipe for disaster. "When we entered California, we were still trying to change the rules so competition could take hold; we were not successful," Lay said. "At the end of the day, it was set up in a way that the more you sold, the more you lost." But the recent filing of Chapter 11 bankruptcy by Pacific Gas & Electric Co., has drawn Enron into the crisis in a big way. The company disclosed last week that it is owed $570 million by the bankrupt utility. Enron has been named to the creditors committee for the case. Rather than restrict their power business to individual states or regions, the company last year decided the time had come for a national effort to enter opening power and gas markets. Enron formed a nationwide power and natural gas retail marketing company catering to residential and small-business customers named The New Power Co. The company is a joint venture of Enron, IBM and AOL Time Warner. The concept of the joint venture is for Enron to provide natural gas and electricity as a commodity, IBM to provide technical support and service, and AOL to provide an Internet platform to market the service nationwide. But less than a year after the company was formed, its concept is already outdated. It has become apparent that the role that AOL was expected to play in marketing the service is not needed; most of the sales so far have happened over the telephone as a result of direct- mail solicitations. "AOL is a problem," said Gene Lockhart, chief executive of The New Power Co. "We are not a dot-com. About 70 percent of our sales come through traditional channels." The intended role of AOL in the joint venture "just hasn't worked," Lockhart said. Now, the deal with AOL is being renegotiated as The New Power Co. establishes relationships with other Internet companies. Since its inception last year, The New Power Co. has grown rapidly and now has about 650,000 customers in 15 states. The company expects to finish the year with 1.2 million customers split about equally between natural gas and electricity, said Bill Jacobs, the chief financial officer for the company. The New Power Co. recently announced that it had signed up over 5,000 residential electricity customers in Texas as part of the state's pilot program to test deregulation. "I think Texas is a market we will be able to enter from day one," Lay said. "Both with The New Power Co. for residential and Enron Energy Services for large customers." ... Broadening its horizons again When Enron bought Portland General, it picked up a new line of business - a telecommunications unit with only 25 employees that moved data over fiber-optic lines. From that tiny start, Enron is creating what it expects will someday grow into a venture that could rival its natural gas and electricity businesses. While electricity looked like a natural next step for Enron after natural gas, the business of trading space on broadband lines appeared on its face to be a different sort of animal. But after a second look, the company's traders noticed that the broadband business looked a lot like natural gas markets in the mid-1980s. In both cases, owners of lines were paid to deliver something. But buying and selling this valuable service was difficult because there were no standardized terms and conditions for contracts and no opportunity to buy or sell on a short notice. For businesses to ensure they had all the broadband capacity they needed during peak periods, they often had to pay for the capacity to send far more data than they needed. "We found even in the case of Enron, when we looked at our connections between Houston and London, the average load factor was only about 15 percent," Lay said. "It's close to 100 percent during peak days, peak hours, etc. But there were an awful lot of nonpeak periods when it was very low. We couldn't do anything with that extra capacity." All of these elements combined to make a very inefficient business - which to Enron meant there were customers out there willing to pay someone to manage their broadband requirements. The broadband business reported a $60 million operating loss for 2000, and the company has warned analysts that it will continue losing money for the next two years or so as it builds its nationwide fiber-optic network. The company's broadband business suffered a setback recently when its deal to provide on-demand video with Blockbuster Video fell through. The cancellation of the 20-year deal means Enron's broadband business will have to go after smaller contracts, which could mean a longer time to expand the business. Losing the Blockbuster deal, and a staff reduction that reduced the broadband team by more than 20 percent, has not dampened company officials' enthusiasm, though they admit the growth may take longer than expected. "This is going to be a core business for us," Lay said. "With this business, we will show that companies define themselves not by industry, but by skill base." ... Azurix turns into wash Undoubtedly, the biggest blunder Enron has made as it has grown away from being strictly an energy company was its misguided foray into the water business. It cost the company billions, confirmed the wisdom of the strategy to shift away from hard assets, and cost Rebecca Mark her job. Enron bought Britain's Wessex Water in 1998 for $2.8 billion to use as a platform to launch a worldwide water business. The plan was to take over formerly public water and wastewater facilities as they privatized as well as manage such facilities. Enron thought it could once again turn a mature regulated business into a growth machine. The move ran counter to the way the rest of the company was going. Enron was going to a strategy built around making markets, rather than ownership of big assets. This allowed it to grow faster using less capital. Enron turned to investors for capital to fuel its water venture, which was led by Mark and named Azurix. It went public in June 1999, selling about one-third of its shares to investors at $19 per share. But Azurix soon ran into fierce competition. Giant multinational rivals such as Vivendi and Suez Lyonnaise des Eaux outbid Azurix time and again for projects, forcing Azurix to pay more for some deals than they were worth. The real blow, however, came when regulators in England clamped down on water rates, depriving the company of its main source of cash flow. Azurix's shares plummeted 40 percent in December 1999 when the company said it would not make fourth-quarter expectations and was laying off much of its staff. Enron decided last summer that it was time to stop the bleeding. Mark resigned from Azurix and from her seat on Enron's board, severing ties to the company she had helped create. A few months later, Enron announced a plan to take the company private. "I am not sure if the strategy was flawed or if it was never given a chance," Lay said. "Some of the operating assumptions didn't prove out, but this was never meant to be a long-term business for us. We thought we could transfer some of our skills into it." Skilling, who was the champion of the company's market-driven business strategy, is a bit more blunt about the experience. "You win some, you lose some, " he said. "If you don't have some mistakes, it means you're not trying. I wish it wasn't as big a mistake as it was, but you can't win them all. ... Making and creating markets The mantra at Enron nowadays is, "We make markets." The company is positioning itself to be a private-sector, online version of the New York Mercantile Exchange, offering traders an Internet platform to buy and sell a vast range of commodities as well as less tangible items such as emissions credits and weather hedges. Stock market observers are having an increasingly hard time figuring out how to value Enron's shares, which sometimes trade in tandem with technology stocks rather than energy stocks because of the growing broadband business. The University of Virginia's Bruner said the question he is most often asked when he teaches his Enron case study is whether the company can keep finding new businesses to enter to sustain its strong growth. His answer is yes. "I think their model can revitalize a wide variety of areas; I think Enron is going to be around for a long time," Bruner said. EnronOnline, the company's Internet trading platform is only about 18 months old but did some $330 billion in transactions last year, easily making it the largest e-commerce site in the world. The company has taken its risk-management skills and approach to buying and selling natural gas and electricity and moved it into the old-line businesses of steel and paper. "We make markets, but they have to have certain characteristics for us to be interested in those markets," Skilling said. The commodities Enron is interested in tend to have very complex, dedicated delivery systems, such as gas pipelines or fiber-optic data communications networks. It has to be a commodity with relatively long time frames involved. Examples would be when a producer drills a well or someone builds a power plant. Those are big capital investments with long-lived assets that are associated with the commodity. "They have morphed from saying they want to be the leading gas company to being the leading energy company to where there is now no industry definition that describes them," Bruner said. Skilling does not believe Enron will be that much different of a company five years from now, other than it likely will have expanded the roster of commodities it trades. But Lay still is expecting big changes. "It will be a totally different company just like it is today versus five years ago," he said. "As we sit here with what is on our plate today, we can see some very significant growth with several years to come. I am sure if we look back five years from now there will be at least one or two businesses with enormous potential in our portfolio that we have not even thought of yet." Photo: 1. From top left: Enron Chairman Ken Lay; President and CEO Jeffrey Skilling; former Azurix Chairwoman Rebecca Mark; an Enron worker in Dabhol, India (color); Graph: 2. Revenues and profits (b/ w, p. 6, BAR GRAPH); Drawing: 3. Enron Center South: A look inside the new tower (b/w, p. 8) Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. BUSINESS THE NEW POWER / Enron / Making of the Market-maker / With ups and downs, Enron Broadband is a work in progress TOM FOWLER Staff 04/15/2001 Houston Chronicle 2 STAR 1 (Copyright 2001) IN LATE 1999, when Enron announced it would pioneer trading of a "new new" commodity - Internet bandwidth - analysts and investors were only a little skeptical. Nevermind that buying and selling time on the vast, unruly tangle of the Internet on a big scale was unheard of. Enron's reputation for making a profit trading almost everything from pulp to plastics made this venture look like a sure thing. When entertainment giant Blockbuster Video signed a deal with Enron last summer to provide video-on-demand service to consumers, creating content to fill that giant data pipeline, investors bid up the stock to show their confidence in its broadband vision. But when the Blockbuster deal was canceled on March 9, Enron stock fell back to earth. Things got worse when Wall Street got reports that Enron Broadband Services was reducing its staff by more then 20 percent - which have since been confirmed by the company. That news took a bit of the high-tech shine off the company at a time when Enron also was getting some bad news from its international operations and the market was losing its taste for high flying stocks. Suddenly, Enron's broadband business, which helped fuel the stock's rise last year, had become a drag. The potential for broadband services and trading isn't being disputed, but Andre Meade, head of U.S. utilities research for Commerzbank Securities, said many analysts were too quick to accept Enron's estimates on the value of the business when it was first announced. "The market priced in an excessive valuation on the broadband business, overreacting on something that was still relatively unknown," Meade said. "Now it's overreacted somewhat to the Blockbuster news. I think it's dropped lower than it should." The trading side of the business appears to be exceeding expectations, but Enron Broadband is still expected to remain in the red for the next couple of years as it builds business. "I think we realize it's still a work in progress," Meade said. Enron Broadband first used its network for broadband hosting, letting a few large customers, such as TV networks or financial services companies, buy data line access on an as-needed basis for such things as Web broadcasts or shipping large amounts of data across the country, said Ken Rice, chief executive officer of Enron Broadband Services. In the past, if a company wanted to do a Web broadcast between two cities, for example, it had two choices: just do the broadcast and hope regular Internet traffic wouldn't slow it down or interfere with the quality, or reserve time on a data line months in advance and pay for several months worth of service, instead of just the time needed. "It seemed to be a business about the same size as natural gas, but growing by 15 to 20 percent per year," Rice said. "By 1998, we decided that telecom could be the company's core business." Enron's bold predictions were embraced by investors and analysts who had learned to give the company a lot of credit for its ability to successfully execute its business plan. That faith helped keep Enron's stock buoyant in the past year even as other companies with broadband businesses, such as Williams Cos. and Global Crossing, saw their operations lose more than half their value. Enron built its own fiber-optic network, which now runs about 18,000 miles. It used that to connect many other large networks around the world. To facilitate those connections, the company has created more than 25 "pooling points" where Enron's network interconnects with others, much like the Henry Hub in Louisiana connects many natural gas pipelines. It's at these pooling points where Enron can flip the switches on increasingly short notice to turn on a section of the network dedicated to a customer's needs. That lets Enron buy and sell just what the customer wants. Enron also created software that allows customers to reserve and schedule bandwidth and pick the quality of service. The company has seen trading grow quickly, jumping from 236 broadband trades in the fourth quarter of 2000 to more than 500 trades in the first quarter of 2001. Enron also is moving closer to having the one tool that could really let trading take off - standardized contracts. That can be a hard sell. "Just as with the electricity and natural gas industries, a lot of the market says it can't start trading until trading standards are set, but that's bogus," Rice said. "We've come up with a couple of standard contracts ourselves and believe the industry will adopt standards over time." Meanwhile, the deal with Blockbuster to provide online delivery of movies was supposed to be the cornerstone of a business in which Enron would deliver a wide variety of content to homes and businesses. The companies had tests of the new service running in four cities, which appeared to be a success, but in early March the 20-year deal came to an abrupt end. Blockbuster was the first to announce the breakup, but Enron issued its own release a few hours later, saying Blockbuster was unable to secure the quality or quantity of movies from the studios needed to make the service a success. "Blockbuster had some relationships with the studios complete, but the studios ultimately weren't too excited about giving them control of the digital rights to films," Rice said. Enron Broadband now is working directly with the studios and other content producers to secure movie deals and expects to announce some of those relationships soon. The company also announced a new content deal to offer hundreds of video game titles online by June. For investors and analysts, however, the misstep with Blockbuster took the shine off Enron's apple. "They really sold the Blockbuster deal as an anchor tenant for broadband and as proof of their idea's success," said Jeff Dietert, vice president of research at Simmons & Company International. "So when it fell through, the one major item we could point to as a sign of a successful execution was gone." While Enron Broadband works toward earning its keep, Rice predicts broadband will become a bigger and bigger part of Enron's overall business. The group has started to trade online data storage - effectively offering companies an alternative to buying more storage hardware - and is even beginning to trade broadcast advertising time. "I think eventually it will be on par with natural gas retail and wholesale," Rice said. "A lot of the guys in that division will say `no way,' but there's no doubt to anyone it will be big." Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. BUSINESS THE NEW POWER / Enron / Making of the Market-maker / The project Staff 04/15/2001 Houston Chronicle 2 STAR 1 (Copyright 2001) Enron Corp. has gone from just another pipeline company to the largest - and possibly the most powerful company - in Houston. This company's insatiable appetite for change has led it to create a dizzying range of new businesses and has spawned a surge of growth in its hometown. This package of stories offers a look at this innovative and powerful worldwide business empire. ... I N S I D E CULTURE: Enron has become a spawning ground for fast-growing businesses because it pushes bright newcomers to quickly show what they can do. But not everyone fits into this pressured business environment: Page 6D. HEADQUARTERS: Enron is in a hurry to get into its new downtown headquarters building. The company will begin moving people into the lower floors this summer, a year before the tower is complete: Page 7D. EMPIRE: Enron is changing its worldwide focus to Western Europe and Japan as it reduces its attention on developing countries, which provide a slower rate of return on investments: Page: 8D. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. A SIGN OF THE TIMES / Glowing logo once hovered over the city that oil built ALLAN TURNE Staff 04/15/2001 Houston Chronicle 4 STAR 33 (Copyright 2001) For years, it hung over downtown Houston like some wacky corporate moon. Giant blue letters - Gulf - in an orange neon disc announced to land and air travelers that they were approaching the nation's oil capital. It was called "The Lollipop." At 58 feet tall, it was the world's largest rotating sign. And while the Gulf Oil Co. reveled in the giant corporate logo atop its neo-Gothic office tower, critics called it an 83-ton monument to tastelessness. Today, as Houston reassesses its downtown architectural heritage and recasts itself as a city it hasn't been in 50 years, the hotly debated landmark of the 1960s and early '70s is largely forgotten. Still, with nostalgia an undercurrent in the central city's reawakening - Enron Field, loft apartments, refurbished office buildings and even a popular new diner all feature a "retro" feel - there are those who fondly recall when the downtown skyline was bathed in an orange glow. "When I first came to Houston for the first time," recalled Gordon Campbell, a former Gulf budget analyst, "I flew from Tulsa on the company plane. That sign was one of the first things I saw. It really gave me a thrill." "I was very passionate about it. . . . It was an icon," added one-time Gulf chemicals division executive Charles Rhoads, who first visited the city as a young Gulf employee in the mid-1960s. "It was the definition of the skyline back then." Undoubtedly the sign that had been atop what is now the Chase Bank building was an eye-catcher. With 4,700 square feet of display area illuminated by 7,350 feet of neon tubing, the sign rotated at a steady 1 1/2 revolutions a minute. "Airline pilots used it as a beacon," boasted Sherman H. Hink, chairman and chief executive officer of Neon Electric Corp., the company that built the sign. "It was advertising. As far as I'm concerned, bigger is better. The object of any sign is to sell." Built at a cost of $250,000, the sign took six months to erect. When it was completed in the summer of 1966, it commanded immediate attention. Signs of the Times magazine, a trade journal, featured the sign on the cover of its September issue. Gulf Oil Co. issued postcards of it, noting on the back that the "landmark will guide travelers and residents to the heart of Houston." "It was a fantastic sign," Hink said. "People loved this sign." Or at least some people loved the sign. "I don't want to be disrespectful," said Bill Roher, former president of Gulf's chemicals division, "but I was somewhat aghast. I hadn't seen anything that garish in any of of the cities I had been in. It wasn't the only sign. Tenneco, all the other oil companies had signs emblazoned on their buildings. But nothing like Gulf. We outdid them. "It was very emblematic of the times. There were very aggressive advertising people who felt that was one way to sell gasoline." Former Houston Chronicle fine-arts editor Ann Holmes said the sign made the the old bank building look like an oversized gas pump, to the amusement of some. "It became a joke and not a very funny one," she said. Artie Lee Hinds, then and now a member of the Houston Municipal Art Commission, recalled that members of the advisory body abhorred the sign. "They didn't like it," she said. "It wasn't that the sign wasn't good-looking. The art commission didn't want any signs on any buildings, and this one was revolving around." Members of the commission quietly urged Gulf management to remove the sign as a public service. Today, such a sign, which finally came down in 1975, never would pass muster with a city ordinance that regulates sign height and size. Critics never warmed to the Gulf sign as they did - begrudgingly, perhaps - to the giant red neon Pegasus that revolved above the old Magnolia Oil Co. headquarters in Dallas. "The Pegasus is interesting," said Rice University architectural historian Stephen Fox. "I don't think the Gulf sign was offensive in any way. But it never claimed people's affection as a civic symbol the way the Magnolia emblem did in Dallas. It basically was a transposition and magnification of a Gulf filling-station sign. There was nothing special, nothing especially Houston about it." While the details of why the gargantuan sign was erected in the first place probably are lost to history - many of those involved in the project are dead - Fox suggested Gulf simply may have been trying to regain its lost prominence on the Houston skyline. When the sign was erected, Gulf, which traced its history to the 1901 discovery of oil at Spindletop, occupied a striking old bank building at Main and Rusk streets. Built in 1929 and standing 450 feet in height, it long had been the tallest building west of the Mississippi River. In 1963, though, Gulf's tower was eclipsed by the 600-foot-tall headquarters of the Humble Oil and Refining Co. (now Exxon Mobil) at 800 Bell Ave. The orange disc brought the Gulf Building's height to more than 500 feet - still short of Humble's height but topping its rival in garishness and illumination. By the time Z.D. Bonner became president of Gulf Oil - United States in the early 1970s, criticism of the sign had reached a crescendo. "It certainly was not an asset," Bonner said. "We had very few people - aside from those in the Gulf marketing department - who really liked it. And there were mechanical problems with it. It had suffered wind damage." When the massive porcelain panels were dismantled - a process Hink said took about a month - workers were surprised to find they were pockmarked with bullet holes. "We got a letter of commendation from some civic association for taking it down," Bonner recalled. The sign was replaced with a helicopter pad, which remains atop the building. Gulf Oil Co. lost its corporate identity in a mid-1980s merger with the San Francisco-based Chevron Cos. About the time the Houston sign was dismantled, Dallas' neon flying horse - erected in 1934 for an oil convention - was donated to the city. It was welded in place to keep it from toppling. In 1997, its neon lights went dark, victims of the elements and neglect. Admirers of the sign raised $600,000 from individual and corporate donors - including Magnolia's descendant, Exxon Mobil - to replace the 15-ton sign with a replica. The new sign was illuminated at the stroke of midnight on New Year's Day 2000. No such resurrection was in the cards for the Gulf sign. Its porcelain panels were taken to Hink's workshop on the city's northwest side. Hink kept the small "R" from the sign's trademark emblem for himself and donated the rest to an employee who wanted to use the panels to build a barn. The barn was built, but the worker since has died, and Hink no longer remembers where the farm was located. Photos: 1. Sign maker Sherman H. Hink poses with a miniature Gulf service station sign, model for the 83-ton neon sign that for nearly a decade rotated atop the company's downtown office tower. At right is the giant sign's trademark emblem - the only part of the controversial landmark that was preserved; 2. Known as "The Lollipop," Gulf Oil Co.'s rotating orange, white and blue logo towered above most other downtown buildings in the 1960s and early '70s. It was removed in 1975. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. BUSINESS THE NEW POWER / Returns on investments too slow in developing nations JENALIA MORENO, MICHAEL DAVIS, JANAKI BAHADUR KREMMER Staff 04/15/2001 Houston Chronicle 2 STAR 8 (Copyright 2001) JUST A FEW years ago, Enron Corp. focused its international operations in developing markets such as Maputo, Mozambique, and Bombay, India. Today, top executives for the Houston-based giant are more likely to fill their passports with stamps from London, Tokyo or Sydney. As in many other public energy companies, a keen interest in building pipelines and power plants in Third World nations while earning a slow rate of return has been replaced with a drive to deliver more money, faster to shareholders, analysts said. That's led to a for-sale sign on many of its international operations. Enron and analysts believe the company's international fortune lies in creating markets for gas, electricity and almost anything else that they can profitably trade. Outsiders say building big power plants has been a profitable line of business for them, but it ties up too much money. "We're perfectly happy to make our way along by buying and selling from other people who have power plants," said John Sherriff, president and chief operating officer of Enron Europe. More than a year ago, Japan opened up 30 percent of its electricity market to competition. The island nation charges some of the highest power rates in the world, and Enron is eager to get into that market. Enron Chairman Ken Lay said he is hopeful, despite a relatively slow start, because he senses a change in attitude on the part of Japanese business leaders. Enron already has set up a joint venture to market the power of some privately owned power plants, and Enron's broadband network will be tied into Tokyo by the end of the year. Hong Kong, Singapore and India will follow. "There is a much greater sense of urgency to make changes and get their economy competitive with the U.S. economy and other economies around the world," Lay said. Europe also is opening up its energy market. Enron's annual report last year predicted: "In just a few years, the competitive European wholesale power market will rival the size of the power sector in the United States. Enron expects to assume the leading position in Europe as it has done in North America." In 1989, Enron chose Europe for its first international foray. "We didn't really tiptoe into the market," said Sherriff. "We really came into it in a big way." Today, Enron employs 4,000 people in Europe. Worldwide it operates in more than 30 nations. "Our business model works best when we're pretty sure we're going to get paid, where there's a rule of law, where there's a lack of bribery," said Sherriff, explaining why the company does not operate in most Eastern European countries. Such ventures in developing countries could reap significantly higher returns than power plants in India, where the company has faced everything from accusations of human rights violations to bureaucratic red tape. But analysts and critics alike question whether the move to the safer haven of developed nations is because of a series of troubles with big energy projects in developing markets. While outsiders have long followed Enron's battles over its power electric plant in the Indian city of Dabhol, its problems with the Asian nation go beyond that. Plans for trading in bandwidth by building a broadband telecom network with 971,000 miles of fiber-optic cable connecting four Indian cities also have been put on hold. "Due to the lengthy delay and continued disagreement on critical commercial and legal issues, Enron has determined that its involvement (in the fiber-optic venture) is no longer financially viable," said John Ambler, an Enron spokesman. "Since we tend to focus on the more open and developed markets, it is too early to determine whether the market will open in an acceptable time frame in India," he added. While analyst Subhash Agarwal, editor of India Focus, a political risk magazine, sees Enron concentrating elsewhere, he says opportunities still exist in India. "They are clearly shifting away from asset-owning to trading in the energy business, but a lot still needs to be done in India before they can freely do that here," Agarwal said. The problems they have faced in the electricity business help explain why they are wary about such commitments. Analysts said selling less-profitable assets is all part of Enron's strategy of frequently changing its businesses, which has been a cornerstone of its success. "You're never going to win on every single investment, but Enron is usually smart enough to know when to get out," said Rebecca Followill, an analyst in Houston for Howard, Weil. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. BUSINESS THE NEW POWER / Working environment now driven more by new ideas than old doctrine MICHAEL DAVIS Staff 04/15/2001 Houston Chronicle 2 STAR 6 (Copyright 2001) FOR CLAUDE TELLIS, working at Enron Corp. has meant being able to develop an idea, pitch it to his bosses and see it through to success. Within a year of joining the company, Tellis was one of a group of employees who put together Enron Investment Partners, a venture- capital fund that specializes in bankrolling minority- and women- owned businesses. It started with $40 million to invest, and that's expected to grow to some $300 million. Tellis was given the chance even though his idea had nothing to do with Enron 's main businesses. He just had to prove that the concept was viable and then be willing to work to make it happen. Tellis explains it all by saying: "Enron is a meritocracy." An open attitude toward new ideas is often cited as one of the key components to the success of Enron as the company continually reinvents itself. The associates program, in which Tellis operates, is one of the best examples of this attitude. Recent MBAs are rotated through various Enron businesses for two years, allowing them to decide where they might best fit in at the huge company. The person largely responsible for the program as it is today is Jeffrey Sk
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