Question

Describe the following individuals did in the Enrons Story: Mike Muckleroy, Lou Pai, John Olson?

Further, explain Mike Muckleroy, a former executive oil trader. Lou Pai former CEO Enron, 350 billion dollars, the 2nd largest landowner in Columbia. John Olson, Enron paid 50 million to fire Olson, a stock analyst.

Answer 1

Enrons Story: Mike Muckleroy:

Muckleroy had worked at Florida Gas with Kenneth Lay in the 1970s. He ended up in Houston with Lay in the '80s, where energy business consolidation gave birth to Enron. But he had run-ins with Enron's new chief executive officer Jeffrey Skilling from the start, offering to settle their disagreements like men -- with fists -- on at least one occasion.

John Olson:

John Olson might have the best one. Mr. Olson, an analyst who has been a longtime skeptic of the energy company's once-stratospheric stock price, has a handwritten note that the Enron chairman, Kenneth L. Lay, sent last June to Mr. Olson's boss, Donald Sanders.

''Don -- John Olson has been wrong about Enron for over 10 years and is still wrong,'' Mr. Lay wrote. ''But he is consistant .''

Consistently right, actually. Mr. Olson, who follows the energy industry for a small investment firm here, has finally been proved correct where just about every other Wall Street analyst who followed Enron was wrong. But he can take only a grim kind of satisfaction in his prescience. ''I would like to be able to gloat,'' he said, ''but this thing is just too damaging, too unhappy, to do anything like that.''

''He's a very sharp analyst,'' said George P. Mitchell, founder of the Mitchell Energy & Development Corporation in Houston. ''When you have 16 out of 17 analysts'' promoting the stock, he said, ''that's pretty tough opposition. But he stuck to his guns, and he did it early.''

Mr. Olson's moment in the sun comes at the end of a lonely time. Wall Street, he said, was dazzled by Enron's high-technology gloss, and did not scrutinize the business. That, he said, has been the sad trend of the analyst community during the years of the dot-com bubble, when companies with no profits and few prospects of earning them could get glowing reviews from analysts like Henry Blodgett of Merrill Lynch and Mary Meeker of Morgan Stanley.

Muckleroy is the expert witness on a scandal involving an Enron subsidiary called Valhalla. He talks about finding out "that was a crooked operation." He brought his concerns up to those above him on the chain of command. He protested all the way to Lay, "and yet, when it blew up and we lost $140 million, Ken Lay went with the `I didn't know anything about this' routine. I had personally gone to him on many occasions, even getting asked to leave his office because I was being `paranoid' about Valhalla. I had several shouting matches over it, telling the board of directors it was going to be a disaster. It was just swept under the rug, there."

Valhalla was the 1987 warning shot that Wall Street, the Securities and Exchange Commission and business journalism ignored. Enron's eventual collapse was diagrammed in the practices, speculations and shady accounting of Valhalla.

Lou pai:

Pai joined Enron in 1987, when it was still just a regional energy supplier. He became one of (eventual) CEO Jeffrey Skilling’s top lieutenants, primarily tasked with detailing and implementing Skilling’s vision of transforming Enron into a de facto energy-commodities-trading firm. During his Enron career, Skilling put Pai in charge of multiple Enron subsidiaries; Pai was CEO of the EES (Enron Energy Services) subsidiary from March 1997, until May 2001. The reasons for his resignation from Enron remain shrouded in mystery.

Despite a reputation for being extremely introverted, taciturn, and reclusive around the office, Pai also came to symbolize the legendary lavishness and excesses of Enron’s corporate culture. Though married, Pai was known to: spend inordinate amounts of time during and after working hours in Houston-area strip clubs; use the Enron corporate jet for personal commuting; and, charge several-hundred dollars worth of lunches for himself and accompanying staff to the corporate expense account (until Chairman Ken Lay later prohibited it).

Between May 18 and June 7, 2001, Pai sold 338,897 shares of Enron stock and exercised Enron stock options that put another 572,818 shares on the open market.At the time, the price averaged $53.78 per share. This early sell-off of Enron stock had the fortuitous benefit of shielding Pai from the same insider trading charges leveled against other Enron executives (who had also secretly sold-off large amounts of stock, before the company’s ruinous finances were publicly known).

His small corner office, on the 31st floor of one of Houston's many downtown office towers, has a splendid view of Enron Field, the city's new baseball stadium. The wood-framed note from Mr. Lay hangs near a wire sculpture of an oil derrick and a silver yo-yo.

The note was scrawled in the margins of a story from U.S. News & World Report in which Mr. Olson was quoted as saying, ''They're not very forthcoming about how they make their money.'' He went on to say: ''I don't know an analyst worth his salt who can seriously analyze Enron.'' A messenger delivered the note from Mr. Lay the next day by hand.

When Mr. Sanders, his boss, showed him the note, Mr. Olson recalls shrugging. ''You know that I'm old and I'm worthless,'' he said, ''but at least I can spell 'consistent'.''

In Houston, opposing Enron was a little like being against the city itself, said Stephen L. Klineberg, a professor of sociology at Rice University. ''You could make a case that it was especially hard in Houston to be a skeptic on Enron,'' he said, because ''Ken Lay and Enron were very much at the center of Houston's sense of positioning itself for success in the post-oil age'' of trading and high technology.

The cost of such pessimism could be high, Mr. Olson said. ''They are a very combative culture over there,'' he said. ''They always played to win.''

Those who did not join the chorus of praise for Enron, he said, could be punished. ''There was a strong mandate, unwritten, unspoken, at Enron that if you the investment banking house ever wanted to do business with Enron, your analyst had to have a strong buy on the stock,'' he said. ''I was continually at war with investment bankers.''

His consistency, however, has not been complete. He did recommend Enron stock when its troubles first drove the price down to $27 a share last September. ''I thought it was a real bargain at the time,'' he said. The slide, of course, continued as Enron headed toward bankruptcy.

Surprisingly, he does not believe that Enron is finished. He said that he believes Enron can, and should, recover because of its trading prowess. ''They were the best of the breed,'' he said. ''Trading did not bring them down. It was a rogue financing operation.''