Summary:
Edison to Enron begins
with the career and fall of Samuel Insull, one
of the great American businessmen, whose unique
experience provides a powerful comparison and
contrast to that of Ken Lay and Enron. Insull
not only brings the Thomas Edison era to life
(he was Edison’s “financial factotum,” as
one historian put it). Insull’s post-Edison
career as head of Chicago Edison Company is a
window onto the development of the modern electricity
industry. Insull became the leading figure in
his industry, and his relentless expansion resulted
in the nation’s largest holding company.
The
parallels between Insull and Lay are striking.
Insull fathered public-utility regulation in
the electricity industry, an inheritance that
Enron would transform via the “mandatory
open access” regulatory regime. The accounting
firm Arthur Andersen gained national prestige
with the Insull account and died from its controversial
work for Enron. Samuel Insull was Mr. Chicago
and Ken Lay Mr. Houston. Both icons were on top
of the world and thought themselves to be invincible.
Both fell to the very bottom. But there were
differences too: Insull’s fall was much
less deserved than that of Lay, and Insull was
acquitted at trial while Lay was not.
Insull’s
career comprises the first three of the book’s
11 chapters. Next comes a four-chapter section
based on Ken Lay’s
two-time mentor—Jack Bowen. Bowen went
to work for the Warren Buffet of his day, Clint
Murchison, a legendary figure whom few know now.
Murchison invested in hundreds of businesses,
almost all of which were money-makers. In particular,
the “Wheeler-Dealer from Texas,” who
made the cover of national magazines such as
Time, founded
major natural gas pipeline companies that are
part of the Enron story in different
ways.
It was Jack Bowen at
Florida Gas Company (which Enron would later
acquire), who hired
Ken Lay
from government. And some years later, while
CEO of Transco Energy Company, the major gas
supplier to New York City, Bowen hired Lay
again. Lay, Transco’s president, was expected
to succeed Bowen as CEO when Houston Natural
Gas (HNG) called. HNG, through merger, would
become Enron.
The last four chapters
of Book 2 concern Houston Natural Gas, the
major gas supplier
to the Texas
Gulf Coast, one of the boom areas of the United
States. The HNG story begins with the legendary
John Henry Kirby, who in 1901 attracted $40
million of capital from St. Louis and the Northeast
to
form interlocking oil and timber companies.
Three years later, the companies declared bankruptcy,
an event that drew national attention. Kirby
went on to have a colorful career as Mr. Houston
and as a nationally known figure from the South,
but bankruptcy stuck him again during the Great
Depression. The parallels between Kirby and
Lay
are notable and even striking. HNG, meanwhile,
had a storybook history under three chairmen:
Frank Smith, John Wimberly, and
Robert Herring. Herring, in particular, was
a revered Houston leader whose career was many
things that Lay’s would not be. Herring’s
pre-HNG career centered upon Ray Fish, who was
the world’s greatest pipeline builder.
(Fish is the subject of his own chapter.) It
was Herring’s death in 1981 that precipitated
a series of events that led to HNG’s luring
Ken Lay away from Jack Bowen at Transco. (And
Herring’s death led his wife, Joanne, on
a path that would culminate in a story chronicled
in the book and movie, Charlie
Wilson’s
War.
Preliminary Table
of Contents:
Introduction
Part
I: The Chief [Samuel Insull]
Chapter 1: General Electric Company
Chapter 2: Chicago Edison to Middle West
Utilities
Chapter 3: The Great Fall & Aftermath
Part
II: The Boss [Jack Bowen]
Chapter 4: Meadows to Murchison
Chapter 5: A Monumental Mistake [Trans-Canada
Pipe Lines Ltd.]
Chapter 6: Florida Gas Company
Chapter 7: Transco Energy Company
Part III:
Enron Predecessors
Chapter
8: Pretty Boy & Mr.
Pipeliner (Robert Herring and Ray Fish)
Chapter 9: The Prince of Bankruptcy (John
Henry Kirby)
Chapter 10: Houston Natural Gas: Part
I
Chapter 11: Houston Natural Gas: Part
II
Epilogue |
