culture, politics, commentary, criticism

Wednesday, March 29, 2006
Money-making secrets of CEOs. How to squeeze $77 milion from a falling stone (an excellent article by Loren Steffy at
Under an arrangement with Enron's board, Lay could repay his loans from the company with Enron stock. By August 2001, after Jeff Skilling resigned as chief executive, [Joanne] Cortez said she noticed Lay used stock to repay the entire $4 million on the credit line with stock, then borrowed the same amount the next day. The pattern of borrowing and repaying with stock continued into the fall, Cortez said.

"It made me question if this was being used as somewhat of a tool to sell shares," she said.

Bingo. More specifically, Lay was using it to convert his Enron stock into cash, to monetize his holdings, which were falling in value. Normally, a corporate officer would have to report stock sales to the Securities and Exchange Commission, but by selling shares back to the issuer, Lay wasn't required to.
It's a simple system: Borrow $4 million. Repay with a worthless asset whose value is determined by propped-up market perceptions. Repeat day after day after day.

Ken Lay borrowed $77 million and paid it back in Beanie Babies.

Cortez's story is heartbreaking. She kept a secret log of Ken Lay's "transactions," never selling her own Enron stock because she was afraid that her knowledge of Lay's activity constituted her being considered an inside trader.

This happened in 2001, the same year that Ken Lay was having his secret energy policy meetings with the former CEO of Halliburton, Dick Cheney.

Top-down class warfare, at least in its current Republican guise, simultaneously depends upon and crushes the faith and goodwill of ordinary people like Joanne Cortez who are trying to do the right thing, even as their leaders fuck them over sixteen different ways. Nowadays we see it everywhere in the US, but especially in finance, in foreign policy, and in religion.

Greatest Hits · Alternatives to First Command Financial Planning · First Command, last resort, Part 3 · Part 2 · Part 1 · Stealing $50K from a widow: Wells Real Estate · Leo Wells, REITs and divine wealth · Sex-crazed Red State teenagers · What I hate: a manifesto · Spawn of Darleen Druyun · All-American high school sex party · Why is Ken Lay smiling? · Poppy's Enron birthday party · The Saudi money laundry and the president's uncle · The sentence of Enron's John Forney · The holiness of Neil Bush's marriage · The Silence of Cheney: a poem · South Park Christians · Capitalist against Bush: Warren Buffett · Fastow childen vs. Enron children · Give your prescription money to your old boss · Neil Bush, hard-working matchmaker · Republicans against fetuses and pregnant women · Emboldened Ken Lay · Faith-based jails · Please die for me so I can skip your funeral · A brief illustrated history of the Republican Party · Nancy Victory · Soldiers become accountants · Beware the Merrill Lynch mob · Darleen Druyun's $5.7 billion surprise · First responder funding · Hoovering the country · First Command fifty percent load · Ken Lay and the Atkins diet · Halliburton WMD · Leave no CEO behind · August in Crawford · Elaine Pagels · Profitable slave labor at Halliburton · Tom Hanks + Mujahideen · Sharon & Neilsie Bush · One weekend a month, or eternity · Is the US pumping Iraqi oil to Kuwait? · Cheney's war · Seth Glickenhaus: Capitalist against Bush · Martha's blow job · Mark Belnick: Tyco Catholic nut · Cheney's deferred Halliburton compensation · Jeb sucks sugar cane · Poindexter & LifeLog · American Family Association panic · Riley Bechtel and the crony economy · The Book of Sharon (Bush) · The Art of Enron · Plunder convention · Waiting in Kuwait: Jay Garner · What's an Army private worth? · Barbara Bodine, Queen of Baghdad · Sneaky bastards at Halliburton · Golf course and barbecue military strategy · Enron at large · Recent astroturf · Cracker Chic 2 · No business like war business · Big Brother · Martha Stewart vs. Thomas White · Roger Kimball, disappointed Republican poetry fan · Cheney, Lay, Afghanistan · Terry Lynn Barton, crimes of burning · Feasting at the Cheney trough · Who would Jesus indict? · Return of the Carlyle Group · Duct tape is for little people · GOP and bad medicine · Sears Tower vs Mt Rushmore · Scared Christians · Crooked playing field · John O'Neill: The man who knew · Back to the top

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