Conspiracy of Fools by Kurt Eichenwald Read Free Book Online

the guests filed out of the reception, Lay headed over to meet the angry directors. He was not in a mood to play nice; a lot of effort had gone into organizing the reception, and the directors had basically insulted everyone in Houston’s energy industry. But before he could speak, the directors started in, making it clear that there was more at stake than some bruised feelings; apparently, the directors distrusted Segnar, their own CEO.
    Lay assured them that no secret deal existed, yet at the same time pushed the idea of moving the headquarters to Houston. The directors decided to hire a consultant to analyze the option. They turned to John Sawhill—a former Nixon Administration official now with McKinsey & Company, the management consulting firm—who had done work for InterNorth in the past.
    It was a decision that would bring to the company the man who ultimately redefined its future.
    ———
    “What, are you kidding me? No way.”
    Jeff Skilling almost laughed. His boss, John Sawhill, had just phoned to tell him about the HNG/InterNorth headquarters study. Skilling, at thirty-one already a rising star in McKinsey’s Houston office, was incredulous.
    “Jeff, it’s an important assignment,” Sawhill said. “It’s something the company really wants.”
    Skilling could only shake his head. He knew about the battles at HNG/InterNorth in the Houston-versus-Omaha debate. Whatever the answer, somebody at the company would be furious—and almost certainly blame the consultants.
    “How do you win this one, John? How do you decide this? I want nothing to do with it.”
    Sawhill implored his underling to reconsider, but Skilling was adamant. Finally, the two agreed to turn the job over to McKinsey’s Washington office, effectively shielding Houston from the company’s inevitable wrath.
    For most young businessmen, such a refusal of a client request might seem risky. But not for Skilling; he was already viewed as a McKinsey wunderkind—brash and arrogant, but with the intellectual firepower to justify his lofty self-image. Born in Pittsburgh in 1953, he was the second of four children, the son of a valve salesman. The family eventually settled in Aurora, Illinois, where Skilling’s father worked with a company called Henry Pratt.
    Aurora was a typical Midwestern town, with wide-open plains and endless enthusiasm for the high-school sports teams. But Skilling, who arrived at the age of twelve, didn’t go in much for sports—or many other school activities. He was a shy, awkward kid, horribly intimidated by girls and largely bored by his teachers.
    Home life wasn’t much better. His father, Thomas, was happy-go-lucky, but he wasn’t around much; his mother, Betty, was a chronic complainer who seemed to blame her husband for a life that didn’t work out the way she hoped. Even positive events in Jeff’s life—a stellar report card, an aced test—fueled her pessimism. “You think things are going well now,” she often said. “Just wait. Things’ll fall apart. Sooner or later, they’ll get you.”
    Skilling ached for something to enthrall him and finally found his answer in the working world. His older brother Tom fancied himself an expert on weather patterns, and as a teenager found a spot doing the weather on WLXT-TV, a struggling local television station. The place was nothing much to look at; its crumbling offices had previously been a Moose Lodge. Tom persuaded the managers to hire his younger brother to fix it up. Jeff showed up every day—painting walls, scrubbing floors, doing odd jobs—but wouldoften steal away during his break time, asking the technicians about the broadcast equipment.
    His big chance came when he was about thirteen. The station was hosting an event to celebrate its early success, and a number of local politicians were on hand. When one part of the broadcast didn’t come off properly, the station’s anxious general manager screamed at the young man running the control booth,