Andrew Fastow, every mention

Enron · Acquired Nov 29, 2022 · 59 mentions

• ▶ 53:50 David Rosenthal So, the big hire that Skilling makes as he's setting up this division is one Andrew Fastow.
• ▶ 54:17 David Rosenthal This is the sort of cloth that Fastow is cut from.
• ▶ 54:31 Ben Gilbert And you look at Andy Fastow, and you hear him talk, and you kind of want to trust him.
• ▶ 54:57 Ben Gilbert The thing with Fastow is, you actually do think he has your best interests at heart.
• ▶ 1:05:19 David Rosenthal Remember these special purpose entities that Skilling and Fastow are now setting up?
• ▶ 1:10:21 David Rosenthal And Fastow, he gets quite the meteoric rise out of this.
• ▶ 1:10:52 David Rosenthal So when skilling gets elevated to number two and fast out to CFO the company, they start articulating as the company strategy that the finance department is going to go from being this shared resource cost center to a profit generating…
• ▶ 1:17:38 David Rosenthal So Fastow and Skilling come up with yet another brilliant idea.
• ▶ 1:18:09 David Rosenthal And what if Andy, what if
• ▶ 1:18:11 David Rosenthal Fastow sets up this fund and is the general partner in it, and we only use it for, you know, stuff that helps Enron.
• ▶ 1:18:39 Ben Gilbert They take this to the board, and they present it, Pastow presents it to the board as like, I'm willing to fall on this sword to do this for you guys.
• ▶ 1:19:16 David Rosenthal Thanks for taking one for the team, Andy.
• ▶ 1:21:20 Ben Gilbert On, I think, deals, but definitely Fastow's compensation from this.
• ▶ 1:21:39 David Rosenthal Well, it is good because these funds, this vehicle, you know, everything that Fastow's now running, can put up the three percent,
• ▶ 1:22:12 David Rosenthal Everybody in Enron is so hyped up about this that in 1999, Fastow starts a campaign within Enron with Lay and Skilling and the PR people in Enron to get himself nominated for the CFO of the year in the CFO magazine annual rankings of CFO.
• ▶ 1:22:45 David Rosenthal One, Fastow is finding a way for Fastow to benefit and get rich.
• ▶ 1:23:05 David Rosenthal Enron also makes Fastow the head of Corp Dev.
• ▶ 1:24:32 David Rosenthal Fasto is still CFO plus head of corp dev plus running these LJM funds, unrelated funds.
• ▶ 1:25:02 David Rosenthal It's fast now.
• ▶ 1:25:07 David Rosenthal Everybody hated Fastow in the company, apparently.
• ▶ 1:25:26 David Rosenthal So, as that all starts happening, Fastow and Skilling and the company eventually decide,
• ▶ 1:25:33 David Rosenthal All right, Andy, you've really taken one for the team here.
• ▶ 1:25:45 David Rosenthal And so, fast out, he asked for some time, the weekend, to go think about it, talk to his wife.
• ▶ 1:26:03 David Rosenthal Back before the funds, when they were just doing kind of one-off deals, Fastow had a direct report in the finance organization, a guy named Michael Copper, and he and Copper came to a, uh, understanding.
• ▶ 1:27:16 David Rosenthal So this particular entity was called the JEDI entity that CalPERS and the Ontario Teachers Fund had invested in, and Enron and Fastow wanted to do an even bigger deal with them, and CalPERS said, okay, we're interested in a bigger deal,…
• ▶ 1:27:39 David Rosenthal Fastow's like, aha, I see an opportunity to enrich myself.
• ▶ 1:27:57 David Rosenthal But Fastow and Copper both work at Enron.
• ▶ 1:28:00 David Rosenthal And why did Fastow target Copper as his accomplice here?
• ▶ 1:28:39 David Rosenthal And then Fastow and Copper create a secret spreadsheet.
• ▶ 1:29:17 David Rosenthal Copper starts cutting checks to Leah Fastow, Andy's wife.
• ▶ 1:29:25 David Rosenthal So now, flash forward, back to when Andy is once again taking one for the team and selling off his general partner membership in the LJM funds.
• ▶ 1:29:41 David Rosenthal And they use the same scheme for Andy, of course, to still stay involved and be getting at least a fifty-fifty, if not more, share of everything.
• ▶ 1:46:31 David Rosenthal You know, a really funny thing, maybe we'll talk about this more in Playbook, is at the same time this is, I think, really best reflected in both Skilling and Fastow.
• ▶ 1:48:29 Ben Gilbert I think that is really what started to come out is, I mean, Fastow went five years without having to disclose how much compensation he was getting from the LJM partnerships.
• ▶ 1:48:39 Ben Gilbert He just thought, I'll just keep self-dealing.
• ▶ 1:50:50 Ben Gilbert And as people start digging in with Skilling and with Lay and with Fastow and granting interviews and doing this sort of stuff.
• ▶ 2:02:22 David Rosenthal Fastow's to blame.
• ▶ 2:02:36 David Rosenthal And Fastow certainly was evil, but was acting on direction from Skilling.
• ▶ 2:06:27 David Rosenthal Skilling sells about two hundred million, and Fastow and a bunch of the other executives sell a whole bunch too.
• ▶ 2:06:34 Ben Gilbert And Fastow actually makes sixty million dollars from the LJM partnerships, from fees, carry, and selling partnership interests.
• ▶ 2:06:53 David Rosenthal at one point the board corners Fastow
• ▶ 2:09:33 David Rosenthal One, he asks Fastow, the CFO, he's trying to get a handle on, you know, like, what's going on here?
• ▶ 2:09:45 David Rosenthal And he asked Fastow to say like, okay, what's the current debt obligations of Enron?
• ▶ 2:09:59 David Rosenthal Fastow's like, uh, I don't know.
• ▶ 2:10:16 David Rosenthal So he comes back to Lay and the board and says, our actual obligations are thirty four billion dollars, which the debt on the balance sheet was 12.8 billion dollars.
• ▶ 2:14:09 Ben Gilbert And speculating on how much they think Fastow might have pulled out of these entities and earned for himself at the expense of the company, Arthur Anderson starts getting real nervous about their role in enabling all of this, and then…
• ▶ 2:18:23 Ben Gilbert Okay, this is fast out.
• ▶ 2:19:48 David Rosenthal The next day, the 23rd, is when the board calls in Fastow and demands to know how much money he's made in the LGM funds.
• ▶ 2:19:54 David Rosenthal They find out they fire him.
• ▶ 2:19:56 David Rosenthal They instate the former company treasurer, Jeff McMahon, who had been the treasurer, but then Fastow had ousted him because he wasn't loyal enough to Fastow.
• ▶ 2:20:09 David Rosenthal McMahon learns that not only did Fastow not know how much debt Enron as an organization had, he also didn't know how much cash they had, and he also didn't know the maturity schedule of the debt, so he didn't know
• ▶ 2:25:23 David Rosenthal The Chewbacca, the Andy Fastow, and Michael Copper total front to buy out the toxic waste that they thought they'd sealed up?
• ▶ 2:35:41 David Rosenthal He rats out Fastow and testifies against him.
• ▶ 2:35:44 David Rosenthal Fastow initially also tries to fight and lawyer up like Lay and Skilling, but the feds ultimately end up getting him to cave when they bust his wife Leah for tax evasion for everything that she was involved in.
• ▶ 2:36:02 David Rosenthal Fastow ends up doing six years in prison.
• ▶ 2:36:06 Ben Gilbert And we should say Fastow, basically, he admitted
• ▶ 2:36:20 Ben Gilbert You can actually hire Fastow as a speaker now to come and talk about corporate responsibility and corporate culture, which is nuts.
• ▶ 2:40:35 David Rosenthal So, as with all huge mega scandal trials like this, like we said, all the underlings, even all the way up to fast out-cop plea deals,
• ▶ 2:41:14 Ben Gilbert And Fastow, you know, with six years.