Assistant Editor, Fraud Magazine
It was on a hot, muggy day in Singapore, at a corner table in Beijing Number One — one of the many restaurants in the Marina Bay Sands Hotel mall — that I sat down with Andrew Fastow, former Enron CFO, to talk about one of the most infamous fraud schemes of the past 15 years. We were the only ones in the restaurant — just two unassuming people in the corner of a traditional Asian eatery. Andy asked if I’d be interested in sharing a whole Peking duck. When in Singapore, right?
While we waited for our roasted duck, I pulled out my two recorders, set them on the table and said, “Now I know you’re typically against being recorded in any way, but I have to record this so that I quote you accurately. Are you comfortable with this?” Andy looked me in the eye and replied, “That’s fine. I trust you.”
What a short and seemingly simple word. It can be tough to gain and very simple to lose. Trust is present every day in so many aspects of our lives. We trust our significant others to fulfill their promised duties. We trust our employers to pay us the amount we’re owed and on time. Many of us innately believe people will make just and ethical decisions, no matter how hard.
And here in my little corner of Singapore, I was about to pry into the unsavory parts of his past. I was going to poke and prod and ask him to reveal things that, until this point, he’d never truly opened up about. Sure, he’s spoken at conferences, but I had free reign to delve into the true machinations of the Enron scandal and for the first time he didn’t have time to completely prepare.
In his interview with Fraud Magazine, Andy explained that he tried to technically follow the rules, but he also undermined the principle of the rule by finding the loophole. "I think we were all overly aggressive,” he said. “If we ever had a deal structure where the accountant said, 'The accounting doesn't work,' then we wouldn't do those deals. We simply kept changing the structure until we came up with one that technically worked within the rules.” He now calls his machinations fraud.
“I was the gatekeeper. I should have been making the tough calls and I didn’t. I just abdicated,” Andy told me. “We had senior executives, like myself, who were doing deals that sent a bad ethical message.”
To read the full interview, visit Fraud-Magazine.com.