Conspiracy of Fools by Kurt Eichenwald is a fast-paced book about the rise and fall of Enron. Like the unfolding of a Greek tragedy, Eichenwald tells the tale of a company that became one of the largest and fastest growing public companies in the United States and then, through mismanagement, greed, and criminal fraud, imploded in the wake of media, regulatory, Congressional and criminal investigations. Following Bob Woodward's model in Veil about the CIA and his books on Iraq, Eichenwald tells the story through first person accounts, as if he can read the minds of the persons involved as the action unfolds. It is an incredible story, with detailed accounts of:
- Ken Lay and his cozy relationships with President George G. W. Bush and President George W. Bush and other federal and state politicians;
- The internal battles at Arthur Anderson between the rainmakers who wanted to mollify their biggest client and the technicians who raised questions about the legitimacy of the off-books special entities, and the mind numbing volume of document destruction that took place very late in the game;
- The lawyers and their meek deference to management;
- Andrew Fastow, the CFO and architect of the special entities, and the millions he made without disclosure to the company of the public;
- The failure of the Officers and the Board of Directors to address the conflicts of interest and other red flags concerning these off-books special entities.
This is the best investigative story about business fraud I have read since Michael Lewis' Liar's Poker and James Stewart's Den of Thieves. As the title indicates, Eichenwald appears to conclude that the fall of Enron was more the result of gross incompetence than criminal fraud.
