title: Matt Gaetz

text: Denying any sexual relationships with minors, Gaetz said on March 30, 2021, that he did not plan to resign from the House. Also on March 30, he tweeted that he and his family were "victims of an organized criminal extortion involving a former DOJ official seeking $25 million". This allegedly began on March 16, with a text message to his father demanding money in exchange for making sex trafficking allegations "go away". Gaetz and his father purportedly received communications claiming that the FBI had photographs of Gaetz engaged in a "sexual orgy with underage prostitutes". The sender demanded millions of dollars to help secure the release of U.S. federal agent Robert Levinson (who had disappeared in Iran in 2007 and had already been presumed and declared dead), proposing that President Joe Biden would pardon Gaetz as a reward for freeing Levinson. The sender was later identified as Florida developer Stephen Alford, who was arrested on August 31.


title: Matt Gaetz

text: Gaetz said his attorneys contacted the FBI, which he said informed them that Gaetz was a subject, not a target, of an investigation. He also said his father agreed to wear a "wire" to help the FBI record the alleged extortionists. Gaetz sent "Axios" screenshots of text messages, emails and documents outlining the alleged extortion scheme, which he asserted was being run by David McGee, a former federal prosecutor who has been a private attorney since 2005 and has represented the Levinson family. McGee's law firm called Gaetz's allegation "completely, totally false" and defamatory, telling "The Daily Beast" that Gaetz was attempting to distract from the sex trafficking investigation. Alford, who has previously been federally convicted of fraud and is represented by McGee, was federally indicted in August 2021 for allegedly conducting the scheme. Prosecutors alleged that Alford claimed he had contacts in the Justice Department who could arrange for a presidential pardon for Gaetz and directed Don Gaetz to wire the money to a trust account managed by McGee. McGee reportedly met with Don Gaetz before Alford did, but apparently did not discuss a presidential pardon, which Alford later admitted to the FBI that he had lied about his ability to arrange.


title: Matt Gaetz

text: Also on March 30, Tucker Carlson interviewed Gaetz on Fox News. In addition to denying the allegations about his relationship with a 17-year-old girl, Gaetz denied a previously unreported claim that he had been photographed "with child prostitutes", and said that a friend of his (whom Carlson had supposedly met) had been urged by the FBI to claim Gaetz was "involved in some pay-for-play scheme". He also argued that "Providing for flights and hotel rooms for people that you're dating who are of legal age is not a crime."


title: Matt Gaetz

text: On March 31, House Minority Leader Kevin McCarthy said he had no plans to remove Gaetz from his seats on the Judiciary and Armed Services Committees, but that he might change his mind if Gaetz "gets indicted" or "if it comes out to be true."


title: Matt Gaetz

text: On April 1, CNN reported that Gaetz had shown pictures of naked women to colleagues on the House floor. Gaetz had allegedly claimed to have slept with the women in the photos. The next day, his communications director, Luke Ball, and his legislative director, Devin Murphy, resigned. Both had begun working for Gaetz when he joined Congress in 2017.


title: Matt Gaetz

text: On April 6, "The New York Times" reported that in the last weeks of the Trump administration, Gaetz privately requested a blanket presidential pardon for himself and others, which was reportedly denied because it would set a bad precedent. The next day, Trump publicly denied that Gaetz had asked him for a pardon. On April 8, it was revealed that Trump had reportedly wanted to defend Gaetz but was told to stand down due to the seriousness of the allegations.


title: Matt Gaetz

text: On April 8, Gaetz's congressional office released a statement purportedly from his female employees vouching for his character, stating they "uniformly reject these allegations as false". Gaetz's new communications director, Joel Valdez, told "Forbes" that "all of the office's eight female staffers signed it", but the version of the statement that was released did not have anyone's signature or identify any specific employee. That evening, Representative Adam Kinzinger tweeted that Gaetz should resign, becoming the first congressional Republican to make such a call.


title: Matt Gaetz

text: On April 9, the House Ethics Committee opened an investigation into allegations that Gaetz "may have engaged in sexual misconduct and/or illicit drug use, shared inappropriate images or videos on the House floor, misused state identification records, converted campaign funds to personal use, and/or accepted a bribe, improper gratuity, or impermissible gift".


title: Matt Gaetz

text: In late April, Gaetz fundraised to run his own political ads, claiming that he was under attack by powerful interests such as "big government, big tech, big business, big media" that perceived him as a political threat. A public-relations firm hired by Gaetz issued a denial statement regarding "The Daily Beast"'s reporting on Greenberg's correspondence implicating him and Gaetz.


title: Matt Gaetz

text: On May 17, Greenberg pleaded guilty to multiple crimes in a plea deal in which he would have to cooperate with prosecutors.


title: Matt Gaetz

text: By June, the federal investigation had reportedly broadened to include obstruction of justice, relating to a phone conversation Gaetz had with a witness. Later in June, "ABC News" reported that the investigation had engulfed many in the Central Florida political scene and that prosecutors could decide whether to bring charges against Gaetz as early as July. In August, "ABC News" reported that Greenberg had "provided investigators with years of Venmo and Cash App transactions and thousands of photos and videos, as well as access to personal social media accounts." These include September 2018 text messages between Greenberg and a woman engaging in prostitution, which indicate that a prostitute was arranged for Gaetz, and that the drug MDMA may have been proffered. A spokesperson for Gaetz said, "not one woman has come forward to accuse Rep. Gaetz of wrongdoing" and that Gaetz had "addressed the debunked allegations against him" on his new podcast, "Firebrand". According to Greenberg, he made the arrangements for Gaetz.


title: Matt Gaetz

text: Two top Washington prosecutors—a public corruption investigator with an expertise in child exploitation crimes and a leader of the public corruption unit—have worked on Gaetz's case since at least mid-2021. Greenberg's sentencing hearing was originally scheduled for August 2021, but due to his cooperation in related investigations, has been delayed three times and is now scheduled for May 2022. In January 2022, an ex-girlfriend of Gaetz's testified before a grand jury after being granted immunity; she reportedly had information relevant to two of three criminal charges being considered for Gaetz: sex trafficking a minor and obstruction of justice. Gaetz is also accused of violating the Mann Act, which prohibits sex trafficking across state lines. Later in January, Joseph Ellicott confessed that in 2017, he witnessed Greenberg telling Gaetz over the phone that the woman they had both had sex with was underage.


title: Matt Gaetz

text: Gaetz has a 2020 book and a 2021 podcast, both titled "Firebrand". In both, he criticizes former House Speaker Paul Ryan for joining the board of Fox News's parent company and blames him for canceling "Lou Dobbs Tonight". In the book, while discussing dating in Washington, he writes, "I knew going in how many people had been brought down by sexual missteps in this town, so I set some rules to help me err on the safe(r) side ... [including] no dating your staff members, [etc.]."


title: Matt Gaetz

text: In June 2020, following an argument with then-Representative Cedric Richmond, Gaetz said he had been living with a 19-year-old immigrant from Cuba, Nestor Galbán, since Galbán was 12, and considered Galbán his son. He later clarified that Galbán is the brother of an ex-girlfriend of Gaetz's and that Galbán spends time with his sister, with Gaetz's family, and with Gaetz. The two are not related genetically or legally. Gaetz said, "Our relationship as a family is defined by our love for each other, not by any paperwork." In 2016, he called Galbán a "local student"; in 2017, he called Galbán "my helper".


title: Matt Gaetz

text: In December 2020, Gaetz announced his engagement to his girlfriend, Ginger Luckey, the sister of Oculus VR founder and major Republican donor Palmer Luckey. They married in August 2021.


title: Enron scandal

text: The Enron scandal was an accounting scandal involving Enron Corporation, an American energy company based in Houston, Texas. Upon being publicized in October 2001, the company declared bankruptcy and its accounting firm, Arthur Andersen then one of the five largest audit and accountancy partnerships in the world was effectively dissolved. In addition to being the largest bankruptcy reorganization in U.S. history at that time, Enron was cited as the biggest audit failure.


title: Enron scandal

text: Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. Several years later, when Jeffrey Skilling was hired, Lay developed a staff of executives that – by the use of accounting loopholes, special purpose entities, and poor financial reporting – were able to hide billions of dollars in debt from failed deals and projects. Chief Financial Officer Andrew Fastow and other executives misled Enron's board of directors and audit committee on high-risk accounting practices and pressured Arthur Andersen to ignore the issues.


title: Enron scandal

text: Enron shareholders filed a $40 billion lawsuit after the company's stock price, which achieved a high of US$90.75 per share in mid-2000, plummeted to less than $1 by the end of November 2001. The U.S. Securities and Exchange Commission (SEC) began an investigation, and rival Houston competitor Dynegy offered to purchase the company at a very low price. The deal failed, and on December 2, 2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. Enron's $63.4 billion in assets made it the largest corporate bankruptcy in U.S. history until the WorldCom scandal the following year.


title: Enron scandal

text: Many executives at Enron were indicted for a variety of charges and some were later sentenced to prison, including Lay and Skilling. Arthur Andersen was found guilty of illegally destroying documents relevant to the SEC investigation, which voided its license to audit public companies and effectively closed the firm. By the time the ruling was overturned at the U.S. Supreme Court, Arthur Andersen had lost the majority of its customers and had ceased operating. Enron employees and shareholders received limited returns in lawsuits, despite losing billions in pensions and stock prices.


title: Enron scandal

text: As a consequence of the scandal, new regulations and legislation were enacted to expand the accuracy of financial reporting for public companies. One piece of legislation, the Sarbanes–Oxley Act, increased penalties for destroying, altering, or fabricating records in federal investigations or for attempting to defraud shareholders. The act also increased the accountability of auditing firms to remain unbiased and independent of their clients.


title: Enron scandal

text: In 1985, Kenneth Lay merged the natural gas pipeline companies of Houston Natural Gas and InterNorth to form Enron. In the early 1990s, he helped to initiate the selling of electricity at market prices and, soon after, Congress approved legislation deregulating the sale of natural gas. The resulting markets made it possible for traders such as Enron to sell energy at higher prices, thereby significantly increasing its revenue. After producers and local governments decried the resultant price volatility and asked for increased regulation, strong lobbying on the part of Enron and others prevented such regulation.


title: Enron scandal

text: As Enron became the largest seller of natural gas in North America by 1992, its trading of gas contracts earned $122 million (before interest and taxes), the second largest contributor to the company's net income. The November 1999 creation of the EnronOnline trading website allowed the company to better manage its contracts trading business.


title: Enron scandal

text: In an attempt to achieve further growth, Enron pursued a diversification strategy. The company owned and operated a variety of assets including gas pipelines, electricity plants, paper plants, water plants, and broadband services across the globe. Enron also gained additional revenue by trading contracts for the same array of products and services with which it was involved.


title: Enron scandal

text: This included setting up power generation plants in developing countries and emerging markets including the Philippines (Subic Bay), Indonesia and India (Dabhol).


title: Enron scandal

text: Enron's stock increased from the start of the 1990s until year-end 1998 by 311%, only modestly higher than the average rate of growth in the Standard & Poor 500 index. However, the stock increased by 56% in 1999 and a further 87% in 2000, compared to a 20% increase and a 10% decrease for the index during the same years. By December 31, 2000, Enron's stock was priced at $83.13 and its market capitalization exceeded $60 billion, 70 times earnings and six times book value, an indication of the stock market's high expectations about its future prospects. In addition, Enron was rated the most innovative large company in America in "Fortune"'s Most Admired Companies survey.


title: Enron scandal

text: Enron's complex financial statements were confusing to shareholders and analysts. In addition, its complex business model and unethical practices required that the company use accounting limitations to misrepresent earnings and modify the balance sheet to indicate favorable performance. Further, some speculative business ventures proved disastrous.


title: Enron scandal

text: The combination of these issues later resulted in the bankruptcy of Enron, and the majority of them were perpetuated by the indirect knowledge or direct actions of Lay, Skilling, Andrew Fastow, and other executives such as Rebecca Mark. Lay served as the chairman of Enron in its last few years, and approved of the actions of Skilling and Fastow, although he did not always inquire about the details. Skilling constantly focused on meeting Wall Street expectations, advocated the use of mark-to-market accounting (accounting based on market value, which was then inflated) and pressured Enron executives to find new ways to hide its debt. Fastow and other executives "created off-balance-sheet vehicles, complex financing structures, and deals so bewildering that few people could understand them."


title: Enron scandal

text: Enron earned profits by providing services such as wholesale trading and risk management in addition to building and maintaining electric power plants, natural gas pipelines, storage, and processing facilities. When accepting the risk of buying and selling products, merchants are allowed to report the selling price as revenues and the products' costs as cost of goods sold. In contrast, an "agent" provides a service to the customer, but does not take the same risks as merchants for buying and selling. Service providers, when classified as agents, may report trading and brokerage fees as revenue, although not for the full value of the transaction.


title: Enron scandal

text: Although trading companies such as Goldman Sachs and Merrill Lynch used the conventional "agent model" for reporting revenue (where only the trading or brokerage fee would be reported as revenue), Enron instead elected to report the entire value of each of its trades as revenue. This "merchant model" was considered much more aggressive in the accounting interpretation than the agent model. Enron's method of reporting inflated trading revenue was later adopted by other companies in the energy trading industry in an attempt to stay competitive with the company's large increase in revenue. Other energy companies such as Duke Energy, Reliant Energy, and Dynegy joined Enron in the largest 50 of the revenue-based "Fortune" 500 owing mainly to their adoption of the same trading revenue accounting as Enron.


title: Enron scandal

text: Between 1996 and 2000, Enron's revenues increased by more than 750%, rising from $13.3 billion in 1996 to $100.7 billion in 2000. This expansion of 65% per year was extraordinary in any industry, including the energy industry, which typically considered growth of 2–3% per year to be respectable. For just the first nine months of 2001, Enron reported $138.7 billion in revenues, placing the company at the sixth position on the "Fortune" Global 500.


title: Enron scandal

text: Enron also used creative accounting tricks and purposefully misclassified loan transactions as sales close to quarterly reporting deadlines, similar to the Lehman Brothers Repo 105 scheme in the 2008 financial crisis, or the currency swap concealment of Greek debt by Goldman Sachs. In Enron's case, Merrill Lynch bought Nigerian barges with an alleged buyback guarantee by Enron shortly before the earnings deadline. According to the government, Enron misreported a bridge loan as a true sale, then bought back the barges a few months later. Merrill Lynch executives were tried and in November 2004 convicted for aiding Enron in fraudulent accounting activities. These charges were thrown out on appeal in 2006, after the Merrill Lynch executives had spent nearly a year in prison, with the 5th U.S. Circuit Court of Appeals in New Orleans calling the conspiracy and wire fraud charges "flawed". Expert observers said that the reversal was highly unusual for the 5th Circuit, commenting that the conviction must have had serious issues in order to be overturned. The Justice Department decided not to retry the case after the reversal of the verdict.


title: Enron scandal

text: In Enron's natural gas business, the accounting had been fairly straightforward: in each time period, the company listed actual costs of supplying the gas and actual revenues received from selling it. However, when Skilling joined Enron, he demanded that the trading business adopt mark-to-market accounting, claiming that it would represent "true economic value". Enron became the first nonfinancial company to use the method to account for its complex long-term contracts. Mark-to-market accounting requires that once a long-term contract has been signed, income is estimated as the present value of net future cash flow. Often, the viability of these contracts and their related costs were difficult to estimate. Owing to the large discrepancies between reported profits and cash, investors were typically given false or misleading reports. Under this method, income from projects could be recorded, although the firm might never have received the money, with this income increasing financial earnings on the books. However, because in future years the profits could not be included, new and additional income had to be included from more projects to develop additional growth to appease investors. As one Enron competitor stated, "If you accelerate your income, then you have to keep doing more and more deals to show the same or rising income." Despite potential pitfalls, the U.S. Securities and Exchange Commission (SEC) approved the accounting method for Enron in its trading of natural gas futures contracts on January 30, 1992. However, Enron later expanded its use to other areas in the company to help it meet Wall Street projections.


title: Enron scandal

text: For one contract, in July 2000, Enron and Blockbuster Video signed a 20-year agreement to introduce on-demand entertainment to various U.S. cities by year's end. After several pilot projects, Enron claimed estimated profits of more than $110 million from the deal, even though analysts questioned the technical viability and market demand of the service. When the network failed to work, Blockbuster withdrew from the contract. Enron continued to claim future profits, even though the deal resulted in a loss.


title: Enron scandal

text: Enron used special purpose entities—limited partnerships or companies created to fulfill a temporary or specific purpose to fund or manage risks associated with specific assets. The company elected to disclose minimal details on its use of "special purpose entities". These shell companies were created by a sponsor, but funded by independent equity investors and debt financing. For financial reporting purposes, a series of rules dictate whether a special purpose entity is a separate entity from the sponsor. In total, by 2001, Enron had used hundreds of special purpose entities to hide its debt. The company used a number of special purpose entities, such as partnerships in its Thomas and Condor tax shelters, financial asset securitization investment trusts (FASITs) in the Apache deal, real estate mortgage investment conduits (REMICs) in the Steele deal, and REMICs and real estate investment trusts (REITs) in the Cochise deal.


title: Enron scandal

text: The special purpose entities were Tobashi schemes used for more than just circumventing accounting conventions. As a result of one violation, Enron's balance sheet understated its liabilities and overstated its equity, and its earnings were overstated. Enron disclosed to its shareholders that it had hedged downside risk in its own illiquid investments using special purpose entities. However, investors were oblivious to the fact that the special purpose entities were actually using the company's own stock and financial guarantees to finance these hedges. This prevented Enron from being protected from the downside risk.


title: Enron scandal

text: In 1993, Enron established a joint venture in energy investments with CalPERS, the California state pension fund, called the Joint Energy Development Investments (JEDI). In 1997, Skilling, serving as Enron's chief operating officer (COO), asked CalPERS to join Enron in a separate investment. CalPERS was interested in the idea, but only if it could be terminated as a partner in JEDI. However, Enron did not want to show any debt from assuming CalPERS' stake in JEDI on its balance sheet. Chief Financial Officer (CFO) Fastow developed the special purpose entity Chewco Investments, a limited partnership (L.P.) which raised debt guaranteed by Enron and was used to acquire CalPERS's joint venture stake for $383 million. Because of Fastow's organization of Chewco, JEDI's losses were kept off of Enron's balance sheet.


title: Enron scandal

text: In autumn 2001, CalPERS and Enron's arrangement was discovered, which required the discontinuation of Enron's prior accounting method for Chewco and JEDI. This disqualification revealed that Enron's reported earnings from 1997 to mid-2001 would need to be reduced by $405 million and that the company's indebtedness would increase by $628 million.


title: Enron scandal

text: Whitewing was the name of a special purpose entity used as a financing method by Enron. In December 1997, with funding of $579 million provided by Enron and $500 million by an outside investor, Whitewing Associates L.P. was formed. Two years later, the entity's arrangement was changed so that it would no longer be consolidated with Enron and be counted on the company's balance sheet. Whitewing was used to purchase Enron assets, including stakes in power plants, pipelines, stocks, and other investments. Between 1999 and 2001, Whitewing bought assets from Enron worth $2 billion, using Enron stock as collateral. Although the transactions were approved by the Enron board, the asset transfers were not true sales and should have been treated instead as loans.


title: Enron scandal

text: In 1999, Fastow formulated two limited partnerships: LJM Cayman. L.P. (LJM1) and LJM2 Co-Investment L.P. (LJM2), for the purpose of buying Enron's poorly performing stocks and stakes to improve its financial statements. LJM 1 and 2 were created solely to serve as the outside equity investor needed for the special purpose entities that were being used by Enron. Fastow had to go before the board of directors to receive an exemption from Enron's code of ethics (as he had the title of CFO) in order to manage the companies. The two partnerships were funded with around $390 million provided by Wachovia, J.P. Morgan Chase, Credit Suisse First Boston, Citigroup, and other investors. Merrill Lynch, which marketed the equity, also contributed $22 million to fund the entities.


title: Enron scandal

text: Enron transferred to "Raptor I-IV", four LJM-related special purpose entities named after the velociraptors in "Jurassic Park", more than "$1.2 billion in assets, including millions of shares of Enron common stock and long term rights to purchase millions more shares, plus $150 million of Enron notes payable" as disclosed in the company's financial statement footnotes. The special purpose entities had been used to pay for all of this using the entities' debt instruments. The footnotes also declared that the instruments' face amount totaled $1.5 billion, and the entities notional amount of $2.1 billion had been used to enter into derivative contracts with Enron.


title: Enron scandal

text: Enron capitalized the Raptors, and, in a manner similar to the accounting employed when a company issues stock at a public offering, then booked the notes payable issued as assets on its balance sheet while increasing the shareholders' equity for the same amount. This treatment later became an issue for Enron and its auditor Arthur Andersen, as removing it from the balance sheet resulted in a $1.2 billion decrease in net shareholders' equity.


title: Enron scandal

text: Eventually the derivative contracts worth $2.1 billion lost significant value. Swaps were established at the time the stock price achieved its maximum. During the ensuing year, the value of the portfolio under the swaps fell by $1.1 billion as the stock prices decreased (the loss of value meant that the special purpose entities technically now owed Enron $1.1 billion by the contracts). Enron, using its mark-to-market accounting method, claimed a $500 million gain on the swap contracts in its 2000 annual report. The gain was responsible for offsetting its stock portfolio losses and was attributed to nearly a third of Enron's earnings for 2000 (before it was properly restated in 2001).


title: Enron scandal

text: On paper, Enron had a model board of directors comprising predominantly outsiders with significant ownership stakes and a talented audit committee. In its 2000 review of best corporate boards, "Chief Executive" included Enron among its five best boards. Even with its complex corporate governance and network of intermediaries, Enron was still able to "attract large sums of capital to fund a questionable business model, conceal its true performance through a series of accounting and financing maneuvers, and hype its stock to unsustainable levels."


title: Enron scandal

text: Although Enron's compensation and performance management system was designed to retain and reward its most valuable employees, the system contributed to a dysfunctional corporate culture that became obsessed with short-term earnings to maximize bonuses. Employees constantly tried to start deals, often disregarding the quality of cash flow or profits, in order to get a better rating for their performance review. Additionally, accounting results were recorded as soon as possible to keep up with the company's stock price. This practice helped ensure deal-makers and executives received large cash bonuses and stock options.


title: Enron scandal

text: Enron was constantly emphasizing its stock price. Management was compensated extensively using stock options, similar to other U.S. companies. This policy of stock option awards caused management to create expectations of rapid growth in efforts to give the appearance of reported earnings to meet Wall Street's expectations. Stock tickers were installed in lobbies, elevators, and on company computers. At budget meetings, Skilling would develop target earnings by asking, "What earnings do you need to keep our stock price up?" and that number would be used, even if it was not feasible. On December 31, 2000, Enron had 96 million shares outstanding as stock option plans (approximately 13% of common shares outstanding). Enron's proxy statement stated that, within three years, these awards were expected to be exercised. Using Enron's January 2001 stock price of $83.13 and the directors' beneficial ownership reported in the 2001 proxy, the value of director stock ownership was $659 million for Lay, and $174 million for Skilling.


title: Enron scandal

text: Skilling believed that if Enron employees were constantly worried about cost, it would hinder original thinking. As a result, extravagant spending was rampant throughout the company, especially among the executives. Employees had large expense accounts and many executives were paid sometimes twice as much as competitors. In 1998, the top 200 highest-paid employees received $193 million from salaries, bonuses, and stock. Two years later, the figure jumped to $1.4 billion.


title: Enron scandal

text: Before its demise, Enron was lauded for its sophisticated financial risk management tools. Risk management was crucial to Enron not only because of its regulatory environment, but also because of its business plan. Enron established long-term fixed commitments which needed to be hedged to prepare for the invariable fluctuation of future energy prices. Enron's downfall was attributed to its reckless use of derivatives and special purpose entities. By hedging its risks with special purpose entities which it owned, Enron retained the risks associated with the transactions. This arrangement had Enron implementing hedges with itself.


title: Enron scandal

text: Enron's aggressive accounting practices were not hidden from the board of directors, as later learned by a Senate subcommittee. The board was informed of the rationale for using the Whitewing, LJM, and Raptor transactions, and after approving them, received status updates on the entities' operations. Although not all of Enron's widespread improper accounting practices were revealed to the board, the practices were dependent on board decisions. Even though Enron extensively relied on derivatives for its business, the company's finance committee and board did not have enough experience with derivatives to understand what they were being told. The Senate subcommittee argued that had there been a detailed understanding of how the derivatives were organized, the board would have prevented their use.


title: Enron scandal

text: Enron's accounting firm, Arthur Andersen, was accused of applying reckless standards in its audits because of a conflict of interest over the significant consulting fees generated by Enron. During 2000, Andersen earned $25 million in audit fees and $27 million in consulting fees (this amount accounted for roughly 27% of the audit fees of public clients for Andersen's Houston office). The auditor's methods were questioned as either being completed solely to receive its annual fees or for its lack of expertise in properly reviewing Enron's revenue recognition, special entities, derivatives, and other accounting practices.


title: Enron scandal

text: Enron hired numerous Certified Public Accountants (CPAs) as well as accountants who had worked on developing accounting rules with the Financial Accounting Standards Board (FASB). The accountants searched for new ways to save the company money, including capitalizing on loopholes found in Generally Accepted Accounting Principles (GAAP), the accounting industry's standards. One Enron accountant revealed "We tried to aggressively use the literature [GAAP] to our advantage. All the rules create all these opportunities. We got to where we did because we exploited that weakness."


title: Enron scandal

text: Andersen's auditors were pressured by Enron's management to defer recognizing the charges from the special purpose entities as its credit risks became known. Since the entities would never return a profit, accounting guidelines required that Enron should take a write-off, where the value of the entity was removed from the balance sheet at a loss. To pressure Andersen into meeting earnings expectations, Enron would occasionally allow accounting companies Ernst & Young or PricewaterhouseCoopers to complete accounting tasks to create the illusion of hiring a new company to replace Andersen. Although Andersen was equipped with internal controls to protect against conflicted incentives of local partners, it failed to prevent conflict of interest. In one case, Andersen's Houston office, which performed the Enron audit, was able to overrule any critical reviews of Enron's accounting decisions by Andersen's Chicago partner. In addition, after news of SEC investigations of Enron were made public, Andersen would later shred several tons of relevant documents and delete nearly 30,000 e-mails and computer files, leading to accusations of a cover-up.


title: Enron scandal

text: Revelations concerning Andersen's overall performance led to the break-up of the firm, and to the following assessment by the Powers Committee (appointed by Enron's board to look into the firm's accounting in October 2001): "The evidence available to us suggests that Andersen did not fulfill its professional responsibilities in connection with its audits of Enron's financial statements, or its obligation to bring to the attention of Enron's Board (or the Audit and Compliance Committee) concerns about Enron's internal contracts over the related-party transactions".


title: Enron scandal

text: Corporate audit committees usually meet just a few times during the year, and their members typically have only modest experience with accounting and finance. Enron's audit committee had more expertise than many others. It included:


title: Enron scandal

text: Enron's audit committee was later criticized for its brief meetings that would cover large amounts of material. In one meeting on February 12, 2001, the committee met for an hour and a half. Enron's audit committee did not have the technical knowledge to question the auditors properly on accounting issues related to the company's special purpose entities. The committee was also unable to question the company's management due to pressures on the committee. The United States Senate Permanent Subcommittee on Investigations of the Committee on Governmental Affairs' report accused the board members of allowing conflicts of interest to impede their duties as monitoring the company's accounting practices. When Enron's scandal became public, the audit committee's conflicts of interest were regarded with suspicion.


title: Enron scandal

text: Commentators attributed the mismanagement behind Enron's fall to a variety of ethical and political-economic causes. Ethical explanations centered on executive greed and hubris, a lack of corporate social responsibility, situation ethics, and get-it-done business pragmatism. Political-economic explanations cited post-1970s deregulation, and inadequate staff and funding for regulatory oversight. A more libertarian analysis maintained that Enron's collapse resulted from the company's reliance on political lobbying, rent-seeking, and the gaming of regulations.


title: Enron scandal

text: Enron made a habit of booking costs of cancelled projects as assets, with the rationale that no official letter had stated that the project was cancelled. This method was known as "the snowball", and although it was initially dictated that such practices be used only for projects worth less than $90 million, it was later increased to $200 million.


title: Enron scandal

text: In 1998, when analysts were given a tour of the Enron Energy Services office, they were impressed with how the employees were working so vigorously. In reality, Skilling had moved other employees to the office from other departments (instructing them to pretend to work hard) to create the appearance that the division was larger than it was. This ruse was used several times to fool analysts about the progress of different areas of Enron to help improve the stock price.


title: Enron scandal

text: Enron division Azurix, slated for an IPO, initially planned to bid between $321 million and $353 million for the rights to operate water system services for areas around Buenos Aires. This was at the high end of what Enron's Risk Assessment and Control Group advised. But as pressure to outbid all others and win the deal grew more intense with the approaching IPO, the Azurix executives decided to up their bid. They eventually bid $438.6, which turned out to be about twice as much as the next highest sealed bid. But when Enron executives arrived at the Argentine facilities, they found them in a shambles with all of the customer records destroyed.


title: Enron scandal

text: On September 20, 2000, a reporter at "The Wall Street Journal" bureau in Dallas wrote a story about how mark-to-market accounting had become prevalent in the energy industry. He noted that outsiders had no real way of knowing the assumptions on which companies that used mark-to-market based their earnings. While the story only appeared in the "Texas Journal," the Texas regional edition of the "Journal," short-seller Jim Chanos happened to read it and decided to check Enron's 10-K report for himself. Chanos did not think it made sense that Enron's broadband unit appeared to far outpace a then-troubled broadband industry. He also noticed that Enron was spending much of its invested capital, and was alarmed by the large amounts of stock being sold by insiders. In November 2000, he decided to short Enron's stock.


title: Enron scandal

text: In February 2001, Chief Accounting Officer Rick Causey told budget managers: "From an accounting standpoint, this will be our easiest year ever. We've got 2001 in the bag." On March 5, Bethany McLean's "Fortune" article "Is Enron Overpriced?" questioned how Enron could maintain its high stock value, which was trading at 55 times its earnings, arguing that analysts and investors did not know exactly how the company made money. McLean was first drawn to the company's financial situation after Chanos suggested she view the company's 10-K for herself. In a post-mortem interview with "The Washington Post", she recalled finding "strange transactions", "erratic cash flow", and "huge debt". The debt was the biggest red flag to McLean; she wondered how a supposedly profitable company could be "adding debt at such a rapid rate". Later, in her book, "The Smartest Guys in the Room," McLean recalled speaking off the record with a number of people in the investment community who were growing skeptical about Enron.


title: Enron scandal

text: McLean telephoned Skilling to discuss her findings prior to publishing the article, but he called her "unethical" for not properly researching his company. Fastow claimed that Enron could not reveal earnings details as the company had more than 1,200 trading books for assorted commodities and did "... not want anyone to know what's on those books. We don't want to tell anyone where we're making money."


title: Enron scandal

text: In a conference call on April 17, 2001, then-Chief Executive Officer (CEO) Skilling verbally attacked Wall Street analyst Richard Grubman, who questioned Enron's unusual accounting practices during a recorded conference call. When Grubman complained that Enron was the only company that could not release a balance sheet along with its earnings statements, Skilling stammered, "Well uh ... Thank you very much, we appreciate it ... Asshole." This became an inside joke among many Enron employees, mocking Grubman for his perceived meddling rather than Skilling's offensiveness, with slogans such as, "Ask Why, Asshole", a variation on Enron's official slogan "Ask why". However, Skilling's comment was met with dismay and astonishment by press and public, as he had previously disdained criticism of Enron coolly or humorously.


title: Enron scandal

text: By the late 1990s Enron's stock was trading for $80–90 per share, and few seemed to concern themselves with the opacity of the company's financial disclosures. In mid-July 2001, Enron reported revenues of $50.1 billion, almost triple year-to-date, and beating analysts' estimates by 3 cents a share. Despite this, Enron's profit margin had stayed at a modest average of about 2.1%, and its share price had decreased by more than 30% since the same quarter of 2000.


title: Enron scandal

text: As time passed, a number of serious concerns confronted the company. Enron had recently faced several serious operational challenges, namely logistical difficulties in operating a new broadband communications trading unit, and the losses from constructing the Dabhol Power project, a large gas powered power plant in India that had been mired in controversy since the beginning in relation to its high pricing and bribery at the highest level. These were subsequently confirmed in the 2002 Senate investigation. There was also increasing criticism of the company for the role that its subsidiary Enron Energy Services had in the California electricity crisis of 2000–2001.


title: Enron scandal

text: On August 14, Skilling announced he was resigning his position as CEO after only six months citing personal reasons. Observers noted that in the months before his exit, Skilling had sold at minimum 450,000 shares of Enron at a value of around $33 million (though he still owned over a million shares at the date of his departure). Nevertheless, Lay, who was serving as chairman at Enron, assured surprised market watchers that there would be "no change in the performance or outlook of the company going forward" from Skilling's departure. Lay announced he himself would re-assume the position of chief executive officer.


title: Enron scandal

text: On August 15, Sherron Watkins, vice president for corporate development, sent an anonymous letter to Lay warning him about the company's accounting practices. One statement in the letter said: "I am incredibly nervous that we will implode in a wave of accounting scandals." Watkins contacted a friend who worked for Arthur Andersen and he drafted a memorandum to give to the audit partners about the points she raised. On August 22, Watkins met individually with Lay and gave him a six-page letter further explaining Enron's accounting issues. Lay questioned her as to whether she had told anyone outside of the company and then vowed to have the company's law firm, Vinson & Elkins, review the issues, despite Watkins arguing that using the law firm would present a conflict of interest. Lay consulted with other executives, and although they wanted to dismiss Watkins (as Texas law did not protect company whistleblowers), they decided against it to prevent a lawsuit. On October 15, Vinson & Elkins announced that Enron had done nothing wrong in its accounting practices as Andersen had approved each issue.


title: Enron scandal

text: By the end of August 2001, his company's stock value still falling, Lay named Greg Whalley, president and COO of Enron Wholesale Services, to succeed Skilling as president and COO of the entire company. He also named Mark Frevert as vice chairman, and appointed Whalley and Frevert to positions in the chairman's office. Some observers suggested that Enron's investors were in significant need of reassurance, not only because the company's business was difficult to understand (even "indecipherable") but also because it was difficult to properly describe the company in financial statements. One analyst stated "it's really hard for analysts to determine where [Enron] are making money in a given quarter and where they are losing money." Lay accepted that Enron's business was very complex, but asserted that analysts would "never get all the information they want" to satisfy their curiosity. He also explained that the complexity of the business was due largely to tax strategies and position-hedging. Lay's efforts seemed to meet with limited success; by September 9, one prominent hedge fund manager noted that "[Enron] stock is trading under a cloud." The sudden departure of Skilling combined with the opacity of Enron's accounting books made proper assessment difficult for Wall Street. In addition, the company admitted to repeatedly using "related-party transactions", which some feared could be too-easily used to transfer losses that might otherwise appear on Enron's own balance sheet. A particularly troubling aspect of this technique was that several of the "related-party" entities had been or were being controlled by CFO Fastow.


title: Enron scandal

text: After the September 11 attacks, media attention shifted away from the company and its troubles. A little less than a month later, Enron announced its intention to begin the process of selling its lower-margin assets in favor of its core businesses of gas and electricity trading. This policy included selling Portland General Electric to another Oregon utility, Northwest Natural Gas, for about $1.9 billion in cash and stock, and possibly selling its 65% stake in the Dabhol project in India.


title: Enron scandal

text: On October 16, 2001, Enron announced that restatements to its financial statements for years 1997 to 2000 were necessary to correct accounting violations. The restatements for the period reduced earnings by $613 million (or 23% of reported profits during the period), increased liabilities at the end of 2000 by $628 million (6% of reported liabilities and 5.5% of reported equity), and reduced equity at the end of 2000 by $1.2 billion (10% of reported equity). Additionally, in January Jeff Skilling had asserted that the broadband unit alone was worth $35 billion, a claim also mistrusted. An analyst at Standard & Poor's said, "I don't think anyone knows what the broadband operation is worth."


title: Enron scandal

text: Enron's management team claimed the losses were mostly due to investment losses, along with charges such as about $180 million in money spent restructuring the company's troubled broadband trading unit. In a statement, Lay said, "After a thorough review of our businesses, we have decided to take these charges to clear away issues that have clouded the performance and earnings potential of our core energy businesses." Some analysts were unnerved. David Fleischer at Goldman Sachs, an analyst termed previously 'one of the company's strongest supporters' asserted that the Enron management "... lost credibility and have to reprove themselves. They need to convince investors these earnings are real, that the company is for real and that growth will be realized."


title: Enron scandal

text: Fastow disclosed to Enron's board of directors on October 22 that he earned $30 million from compensation arrangements when managing the LJM limited partnerships. That day, the share price of Enron decreased to $20.65, down $5.40 in one day, after the announcement by the SEC that it was investigating several suspicious deals struck by Enron, characterizing them as "some of the most opaque transactions with insiders ever seen". Attempting to explain the billion-dollar charge and calm investors, Enron's disclosures spoke of "share settled costless collar arrangements", "derivative instruments which eliminated the contingent nature of existing restricted forward contracts," and strategies that served "to hedge certain merchant investments and other assets." Such puzzling phraseology left many analysts feeling ignorant about just how Enron managed its business. Regarding the SEC investigation, chairman and CEO Lay said, "We will cooperate fully with the SEC and look forward to the opportunity to put any concern about these transactions to rest."


title: Enron scandal

text: Two days later, on October 25, Fastow was removed as CFO, despite Lay's assurances as early as the previous day that he and the board had confidence in him. In announcing Fastow's ouster, Lay said, "In my continued discussions with the financial community, it became clear to me that restoring investor confidence would require us to replace Andy as CFO." The move came after several banks refused to issue loans to Enron as long as Fastow remained CFO. However, with Skilling and Fastow now both departed, some analysts feared that revealing the company's practices would be made all the more difficult. Enron's stock was now trading at $16.41, having lost half its value in a little more than a week.


title: Enron scandal

text: Jeff McMahon, head of industrial markets, succeeded Fastow as CFO. His first task was to deal with a cash crisis. A day earlier, Enron discovered that it was unable to roll its commercial paper, effectively losing access to several billion dollars in financing. The company had actually experienced difficulty selling its commercial paper for a week, but was now unable to sell even overnight paper. On October 27 the company began buying back all its commercial paper, valued at around $3.3 billion, in an effort to calm investor fears about Enron's supply of cash. Enron financed the re-purchase by depleting its lines of credit at several banks. While the company's debt rating was still considered investment-grade, its bonds were trading at levels slightly less, making future sales problematic. It soon emerged that Fastow had been so focused on creating off-balance sheet vehicles that he had all but ignored some of the most rudimentary aspects of corporate finance. McMahon and a "financial SWAT team" put together to find a way out of the cash crisis discovered that under Fastow's watch, Enron only operated on a quarterly basis. Fastow never developed procedures for tracking cash or debt maturities that were common for companies of Enron's stature. For all intents and purposes, Enron was illiquid.


title: Enron scandal

text: As the month came to a close, serious concerns were being raised by some observers regarding Enron's possible manipulation of accepted accounting rules; however, analysis was claimed to be impossible based on the incomplete information provided by Enron. Industry analysts feared that Enron was the new Long-Term Capital Management, the hedge fund whose bankruptcy in 1998 threatened systemic failure of the international financial markets. Enron's tremendous presence worried some about the consequences of the company's possible bankruptcy. Enron executives accepted questions in written form only.


title: Enron scandal

text: The main short-term danger to Enron's survival at the end of October 2001 seemed to be its credit rating. It was reported at the time that Moody's and Fitch, two of the three biggest credit-rating agencies, had slated Enron for review for possible downgrade. Such a downgrade would force Enron to issue millions of shares of stock to cover loans it had guaranteed, which would decrease the value of existing stock further. Additionally, all manner of companies began reviewing their existing contracts with Enron, especially in the long term, in the event that Enron's rating were lowered below investment grade, a possible hindrance for future transactions.


title: Enron scandal

text: Analysts and observers continued their complaints regarding the difficulty or impossibility of properly assessing a company whose financial statements were so cryptic. Some feared that no one at Enron apart from Skilling and Fastow could completely explain years of mysterious transactions. "You're getting way over my head", said Lay during late August 2001 in response to detailed questions about Enron's business, a reaction that worried analysts.


title: Enron scandal

text: On October 29, responding to growing concerns that Enron might have insufficient cash on hand, news spread that Enron was seeking a further $1–2 billion in financing from banks. The next day, as feared, Moody's lowered Enron's credit rating from Baa1 to Baa2, two levels above junk status. Standard & Poor's affirmed Enron's rating of BBB+, the equivalent of Moody's Baa1. Moody's also warned that it would downgrade Enron's commercial paper rating, the consequence of which would likely prevent the company from finding the further financing it sought to keep solvent.


title: Enron scandal

text: November began with the disclosure that the SEC was now pursuing a formal investigation, prompted by questions related to Enron's dealings with "related parties". Enron's board also announced that it would commission a special committee to investigate the transactions, directed by William C. Powers, the dean of the University of Texas law school. The next day, an editorial in "The New York Times" demanded an "aggressive" investigation into the matter. Enron was able to secure an additional $1 billion in financing from cross-town rival Dynegy on November 2, but the news was not universally admired in that the debt was secured by assets from the company's valuable Northern Natural Gas and Transwestern Pipeline.


title: Enron scandal

text: Sources claimed that Enron was planning to explain its business practices more fully within the coming days, as a confidence-building gesture. Enron's stock was now trading at around $7, and by this time it was obvious that Enron could not stay independent. However, investors worried that the company would not be able to find a buyer.


title: Enron scandal

text: After Enron had received a wide spectrum of rejections, Enron management apparently found a buyer when the board of Dynegy, another energy trader based in Houston, voted late at night on November 7 to acquire Enron at a very low price of about $8 billion in stock. Chevron Texaco, which at the time owned about a quarter of Dynegy, agreed to provide Enron with $2.5 billion in cash, specifically $1 billion at first and the rest when the deal was completed. Dynegy would also be required to assume nearly $13 billion of debt, plus any other debt hitherto occluded by the Enron management's secretive business practices, possibly as much as $10 billion in "hidden" debt. Dynegy and Enron confirmed their deal on November 8, 2001.


title: Enron scandal

text: With Enron in a state of near collapse, the deal was largely on Dynegy's terms. Dynegy would be the surviving company, and Dynegy CEO Charles Watson and his management team would head the merged company. Enron shareholders would get a 40 percent stake in the enlarged Dynegy, and Enron would get three seats on the merged company's board. Lay would not have any management role, though it was presumed he would get one of Enron's seats on the board. Of Enron's senior executives, only Whalley would join the merged company's C-suite, as an executive vice president. Dynegy agreed to invest $1.5 billion into Enron to keep it alive until the deal closed.


title: Enron scandal

text: As a measure of how dire Enron's financial picture had become, the company initially balked at paying its bills for November until the credit agencies gave the merger their blessing and allowed Enron to keep its credit at investment grade. By this time, the Dynegy deal was virtually the only thing keeping the company alive, and Enron officials wanted to keep as much cash in the company's coffers in the event of bankruptcy. Had the credit agencies balked at the deal and reduced Enron to junk status, its ability to trade would be severely limited if there was a reduction or elimination of its credit lines with competitors. Ultimately, after Enron and Dynegy retooled the deal to make it harder for Dynegy to trigger the "material adverse change" clause and pull out, Moody's and S&P agreed to drop Enron to one notch above junk status, allowing Enron to pay its bills one day late with interest.


title: Enron scandal

text: Commentators remarked on the different corporate cultures between Dynegy and Enron, and on Watson's "straight-talking" personality. Some wondered if Enron's troubles had not simply been the result of innocent accounting errors. By November, Enron was asserting that the billion-plus "one-time charges" disclosed in October should in reality have been $200 million, with the rest of the amount simply corrections of dormant accounting mistakes. Many feared other "mistakes" and restatements might yet be revealed.


title: Enron scandal

text: Another major correction of Enron's earnings was announced on November 9, with a reduction of $591 million of the stated revenue of years 1997–2000. The charges were said to come largely from two special purpose partnerships (JEDI and Chewco). The corrections resulted in the virtual elimination of profit for fiscal year 1997, with significant reductions for the other years. Despite this disclosure, Dynegy declared it still intended to purchase Enron. Both companies were said to be anxious to receive an official assessment of the proposed sale from Moody's and S&P presumably to understand the effect the completion of any buyout transaction would have on Dynegy and Enron's credit rating. In addition, concerns were raised regarding antitrust regulatory restrictions resulting in possible divestiture, along with what to some observers were the radically different corporate cultures of Enron and Dynegy.


title: Enron scandal

text: Both companies promoted the deal aggressively, and some observers were hopeful; Watson was praised for attempting to create the largest company on the energy market. At the time, Watson said: "We feel [Enron] is a very solid company with plenty of capacity to withstand whatever happens the next few months." One analyst called the deal "a whopper ... a very good deal financially, certainly should be a good deal strategically, and provides some immediate balance-sheet backstop for Enron."


title: Enron scandal

text: Credit issues were becoming more critical, however. Around the time the buyout was made public, Moody's and S&P publicly announced that they had reduced Enron to just above junk status. In a conference call, S&P affirmed that, were Enron not to be bought, S&P would reduce its rating to low BB or high B, ratings noted as being within junk status. Additionally, many traders had limited their involvement with Enron, or stopped doing business altogether, fearing more bad news. Watson again attempted to re-assure, attesting at a presentation to investors that there was "nothing wrong with Enron's business". He also acknowledged that remunerative steps (in the form of more stock options) would have to be taken to redress the animosity of many Enron employees towards management after it was revealed that Lay and other officials had sold hundreds of millions of dollars' worth of stock during the months prior to the crisis. The situation was not helped by the disclosure that Lay, his "reputation in tatters", stood to receive a payment of $60 million as a change-of-control fee subsequent to the Dynegy acquisition, while many Enron employees had seen their retirement accounts, which were based largely on Enron stock, ravaged as the price decreased 90% in a year. An official at a company owned by Enron stated "We had some married couples who both worked who lost as much as $800,000 or $900,000. It pretty much wiped out every employee's savings plan."


title: Enron scandal

text: Watson assured investors that the true nature of Enron's business had been made apparent to him: "We have comfort there is not another shoe to drop. If there is no shoe, this is a phenomenally good transaction." Watson further asserted that Enron's energy trading part alone was worth the price Dynegy was paying for the whole company.


title: Enron scandal

text: By mid-November, Enron announced it was planning to sell about $8 billion worth of underperforming assets, along with a general plan to reduce its scale for the sake of financial stability. On November 19 Enron disclosed to the public further evidence of its critical state of affairs, most pressingly that the company had debt repayment obligations in the range of $9 billion by the end of 2002. Such debts were "vastly in excess" of its available cash. Also, the success of measures to preserve its solvency were not guaranteed, specifically as regarded asset sales and debt refinancing. In a statement, Enron revealed "An adverse outcome with respect to any of these matters would likely have a material adverse impact on Enron's ability to continue as a going concern."


title: Enron scandal

text: Two days later, on November 21, Wall Street expressed serious doubts that Dynegy would proceed with its deal at all, or would seek to radically renegotiate. Furthermore, Enron revealed in a 10-Q filing that almost all the money it had recently borrowed for purposes including buying its commercial paper, or about $5 billion, had been exhausted in just 50 days. Analysts were unnerved at the revelation, especially since Dynegy was reported to have also been unaware of Enron's rate of cash use. In order to end the proposed buyout, Dynegy would need to legally demonstrate a "material change" in the circumstances of the transaction; as late as November 22, sources close to Dynegy were skeptical that the latest revelations constituted sufficient grounds. Indeed, while Lay assumed that one of his underlings had shared the 10-Q with Dynegy officials, no one at Dynegy saw it until it was released to the public. It subsequently emerged that Enron's traders had grabbed much of the money from Dynegy's cash infusion and used it to guarantee payment to their trading partners when it came time to settle up.


title: Enron scandal

text: The SEC announced it had filed civil fraud complaints against Andersen. A few days later, sources claimed Enron and Dynegy were renegotiating the terms of their arrangement. Dynegy now demanded Enron agree to be bought for $4 billion rather than the previous $8 billion. Observers were reporting difficulties in ascertaining which of Enron's operations, if any, were profitable. Reports described an en masse shift of business to Enron's competitors for the sake of risk exposure reduction.


title: Enron scandal

text: On November 28, 2001, Enron's two worst possible outcomes came true. Credit rating agencies all reduced Enron's credit rating to junk status, and Dynegy's board tore up the merger agreement on Watson's advice. Watson later said, "At the end, you couldn't give it [Enron] to me." Although they had seemingly ironed out a number of outstanding issues at a meeting in New York over the previous weekend, ultimately Dynegy's concerns about Enron's liquidity and dwindling business proved insurmountable. The company had very little cash with which to operate, let alone satisfy enormous debts. Its stock price fell to $0.61 at the end of the day's trading. One editorial observer wrote that "Enron is now shorthand for the perfect financial storm."


title: Enron scandal

text: Systemic consequences were felt, as Enron's creditors and other energy trading companies suffered the loss of several percentage points. Some analysts felt Enron's failure indicated the risks of the post-September 11 economy, and encouraged traders to lock in profits where they could. The question now became how to determine the total exposure of the markets and other traders to Enron's failure. Early calculations estimated $18.7 billion. One adviser stated, "We don't really know who is out there exposed to Enron's credit. I'm telling my clients to prepare for the worst."


title: Enron scandal

text: Within 24 hours, speculation abounded that Enron would have no choice but to file for bankruptcy. Enron was estimated to have about $23 billion in liabilities from both debt outstanding and guaranteed loans. Citigroup and JP Morgan Chase in particular appeared to have significant amounts to lose with Enron's bankruptcy. Additionally, many of Enron's major assets were pledged to lenders in order to secure loans, causing doubt about what, if anything, unsecured creditors and eventually stockholders might receive in bankruptcy proceedings. As it turned out, new corporate treasurer Ray Bowen had known as early as the day Dynegy pulled out of the deal that Enron was headed for bankruptcy. He spent most of the next two days scrambling to find a bank who would take Enron's remaining cash after pulling all of its money out of Citibank. He was ultimately forced to make do with a small Houston bank.


title: Enron scandal

text: By the close of business on November 30, 2001, it was obvious Enron was at the end of its tether. That day, Enron Europe, the holding company for Enron's operations in continental Europe, filed for bankruptcy. The rest of Enron followed suit the following night, December 1, when the board voted unanimously to file for Chapter 11 protection. It became the largest bankruptcy in U.S. history, surpassing the 1970 bankruptcy of the Penn Central (WorldCom's bankruptcy the next year surpassed Enron's bankruptcy so the title was short held), and resulted in 4,000 lost jobs. The day that Enron filed for bankruptcy, thousands of employees were told to pack their belongings and given 30 minutes to vacate the building. Nearly 62% of 15,000 employees' savings plans relied on Enron stock that was purchased at $83 in early 2001 and was now practically worthless.


title: Enron scandal

text: On January 17, 2002, Enron dismissed Arthur Andersen as its auditor, citing its accounting advice and the destruction of documents. Andersen countered that it had already ended its relationship with the company when Enron became bankrupt.


title: Enron scandal

text: Fastow and his wife, Lea, both pleaded guilty to charges against them. Fastow was initially charged with 98 counts of fraud, money laundering, insider trading, and conspiracy, among other crimes. Fastow pleaded guilty to two charges of conspiracy and was sentenced to ten years with no parole in a plea bargain to testify against Lay, Skilling, and Causey. Lea was indicted on six felony counts, but prosecutors later dismissed them in favor of a single misdemeanor tax charge. Lea was sentenced to one year for helping her husband hide income from the government.


title: Enron scandal

text: Lay and Skilling went on trial for their part in the Enron scandal in January 2006. The 53-count, 65-page indictment covers a broad range of financial crimes, including bank fraud, making false statements to banks and auditors, securities fraud, wire fraud, money laundering, conspiracy, and insider trading. United States District Judge Sim Lake had previously denied motions by the defendants to have separate trials and to relocate the case out of Houston, where the defendants argued the negative publicity concerning Enron's demise would make it impossible to get a fair trial. On May 25, 2006, the jury in the Lay and Skilling trial returned its verdicts. Skilling was convicted of 19 of 28 counts of securities fraud and wire fraud and acquitted on the remaining nine, including charges of insider trading. He was sentenced to 24 years and 4 months in prison. In 2013 the United States Department of Justice reached a deal with Skilling, which resulted in ten years being cut from his sentence.


title: Enron scandal

text: Lay pleaded not guilty to the eleven criminal charges, and claimed that he was misled by those around him. He attributed the main cause for the company's demise to Fastow. Lay was convicted of all six counts of securities and wire fraud for which he had been tried, and he was subject to a maximum total sentence of 45 years in prison. However, before sentencing was scheduled, Lay died on July 5, 2006. At the time of his death, the SEC had been seeking more than $90 million from Lay in addition to civil fines. The case of Lay's wife, Linda, is a difficult one. She sold roughly 500,000 shares of Enron ten minutes to thirty minutes before the information that Enron was collapsing went public on November 28, 2001. Linda was never charged with any of the events related to Enron.


title: Enron scandal

text: Although Michael Kopper worked at Enron for more than seven years, Lay did not know of Kopper even after the company's bankruptcy. Kopper was able to keep his name anonymous in the entire affair. Kopper was the first Enron executive to plead guilty. Chief Accounting Officer Rick Causey was indicted with six felony charges for disguising Enron's financial condition during his tenure. After pleading not guilty, he later switched to guilty and was sentenced to seven years in prison.


title: Enron scandal

text: All told, sixteen people pleaded guilty for crimes committed at the company, and five others, including four former Merrill Lynch employees (three of whose convictions were subsequently overturned on appeal), were found guilty. Eight former Enron executives testified—the main witness being Fastow—against Lay and Skilling, his former bosses. Another was Kenneth Rice, the former chief of Enron Corp.'s high-speed Internet unit, who cooperated and whose testimony helped convict Skilling and Lay. In June 2007, he received a 27-month sentence.


title: Enron scandal

text: Michael W. Krautz, a former Enron accountant, was among the accused who was acquitted of charges related to the scandal. Represented by Barry Pollack, Krautz was acquitted of federal criminal fraud charges after a month-long jury trial.


title: Enron scandal

text: Arthur Andersen was charged with and found guilty of obstruction of justice for shredding the thousands of documents and deleting e-mails and company files that tied the firm to its audit of Enron. Although only a small number of Arthur Andersen's employees were involved with the scandal, the firm was effectively put out of business; the SEC is not allowed to accept audits from convicted felons. The company surrendered its CPA license on August 31, 2002, and 85,000 employees lost their jobs. The conviction was later overturned by the U.S. Supreme Court due to the jury not being properly instructed on the charge against Andersen. The Supreme Court ruling theoretically left Andersen free to resume operations. However, the damage to the Andersen name has been so great that it has not returned as a viable business even on a limited scale.


title: Enron scandal

text: Giles Darby, David Bermingham, and Gary Mulgrew worked for Greenwich NatWest. The three British men had worked with Fastow on a special purpose entity he had started called Swap Sub. When Fastow was being investigated by the SEC, the three men met with the British Financial Services Authority (FSA) in November 2001 to discuss their interactions with Fastow. In June 2002, the U.S. issued warrants for their arrest on seven counts of wire fraud, and they were then extradited. On July 12, a potential Enron witness scheduled to be extradited to the U.S., Neil Coulbeck, was found dead in a park in north-east London. Coulbeck's death was eventually ruled to have been a suicide. The U.S. case alleged that Coulbeck and others conspired with Fastow. In a plea bargain in November 2007, the trio plead guilty to one count of wire fraud while the other six counts were dismissed. Darby, Bermingham, and Mulgrew were each sentenced to 37 months in prison. In August 2010, Bermingham and Mulgrew retracted their confessions.


title: Enron scandal

text: While some employees, like John D. Arnold, received large bonuses in the final days of the company, Enron's shareholders lost $74 billion in the four years before the company's bankruptcy ($40 to $45 billion was attributed to fraud). As Enron had nearly $67 billion that it owed creditors, employees and shareholders received limited, if any, assistance aside from severance from Enron. To pay its creditors, Enron held auctions to sell assets including art, photographs, logo signs, and its pipelines.


title: Enron scandal

text: A class action lawsuit on behalf of about 20,000 Enron employees who alleged mismanagement of their 401(k) plans resulted in a July 2005 settlement of $356 million against Enron and 401(k) manager Northern Trust. A year later the settlement was reduced to $37.5 million in an agreement by Federal judge Melinda Harmon, with Northern Trust neither admitting or denying wrongdoing.


title: Enron scandal

text: In May 2004, more than 20,000 of Enron's former employees won a suit of $85 million for compensation of $2 billion that was lost from their pensions. From the settlement, the employees each received about $3,100. The next year, investors received another settlement from several banks of $4.2 billion. In September 2008, a $7.2-billion settlement from a $40-billion lawsuit, was reached on behalf of the shareholders. The settlement was distributed among the main plaintiff, University of California (UC), and 1.5 million individuals and groups. UC's law firm Coughlin Stoia Geller Rudman and Robbins, received $688 million in fees, the highest in a U.S. securities fraud case. At the distribution, UC announced in a press release "We are extremely pleased to be returning these funds to the members of the class. Getting here has required a long, challenging effort, but the results for Enron investors are unprecedented."


title: Enron scandal

text: Between December 2001 and April 2002, the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services held multiple hearings about the Enron scandal and related accounting and investor protection issues. These hearings and the corporate scandals that followed Enron led to the passage of the Sarbanes-Oxley Act on July 30, 2002. The Act is nearly "a mirror image of Enron: the company's perceived corporate governance failings are matched virtually point for point in the principal provisions of the Act."


title: Enron scandal

text: The main provisions of the Sarbanes-Oxley Act included the establishment of the Public Company Accounting Oversight Board to develop standards for the preparation of audit reports; the restriction of public accounting companies from providing any non-auditing services when auditing; provisions for the independence of audit committee members, executives being required to sign off on financial reports, and relinquishment of certain executives' bonuses in case of financial restatements; and expanded financial disclosure of companies' relationships with unconsolidated entities.


title: Enron scandal

text: On February 13, 2002, due to the instances of corporate malfeasances and accounting violations, the SEC recommended changes of the stock exchanges' regulations. In June 2002, the New York Stock Exchange announced a new governance proposal, which was approved by the SEC in November 2003. The main provisions of the final NYSE proposal include:


title: Enron scandal

text: Kenneth Lay was a longtime supporter of U.S. president George W. Bush and a donor to his various political campaigns, including his successful bid for the presidency in 2000. As such, critics of Bush and his administration attempted to link them to the scandal. A January 2002 article in "The Economist" claimed that Lay had been a close personal friend of Bush's family and had backed him financially since his unsuccessful campaign for Congress in 1978. Allegedly, Lay was even rumored at one point to be in the running to serve as Secretary of Energy for Bush.


title: Enron scandal

text: In an article that same month, "Time" magazine accused the Bush administration of making desperate attempts to distance themselves from the scandal. According to author Frank Pellegrini, various Bush appointments held connections to Enron, including deputy White House Chief of Staff Karl Rove as a stockholder, Secretary of the Army Thomas E. White Jr. as a former executive, and SEC chairman Harvey Pitt, a former employee of Arthur Andersen. Former Montana governor Marc Racicot, whom Bush considered for appointment for Secretary of the Interior, briefly served as a lobbyist for the company after leaving office. After opening a criminal investigation into the scandal, Attorney General John Ashcroft recused himself and his chief of staff from the case when Democratic Congressman Henry Waxman accused Ashcroft of receiving $25,000 from Enron for his failed reelection campaign to the Senate in 2000. As Pellegrini wrote, "The Democrats will have the company-he-keeps, guilt-by-association thing on their side, and with all the ... general whiff of rich man's cover-up about the whole affair, they'll have a class warfare card to play this spring."


title: The Killing of a Sacred Deer

text: The Killing of a Sacred Deer is a 2017 psychological horror thriller film directed by Yorgos Lanthimos and starring Colin Farrell, Nicole Kidman, Barry Keoghan, Raffey Cassidy, Sunny Suljic, Alicia Silverstone, and Bill Camp. The screenplay by Lanthimos and Efthymis Filippou was inspired by the ancient Greek tragedy "Iphigenia in Aulis" by Euripides, and follows a cardiac surgeon who introduces his family to a teenage boy with a connection to his past, after which they mysteriously begin to fall ill.


title: The Killing of a Sacred Deer

text: The film was selected to compete for the Palme d'Or in the main competition section of the 2017 Cannes Film Festival. It was theatrically released in the United States by A24 on 20 October 2017, and in the United Kingdom and Ireland by Curzon Artificial Eye on 3 November. Critical response to the film was mostly positive, and it grossed over $7 million worldwide.


title: The Killing of a Sacred Deer

text: After performing an open heart surgery, Steven Murphy, a cardiothoracic surgeon in Cincinnati, goes to a diner to meet 16-year-old Martin Lang, whose father died a few years earlier, before returning home to his wife, Anna, and their children, Kim, who is 14, and Bob, who is younger. Steven invites Martin to meet his family, and Martin gets along with everyone, especially Kim. That night, Martin calls to say he has already told his mother that Steven is coming to dinner the following evening. Martin insists Steven stay to watch a movie after the meal, but he leaves partway through to go to bed, and his mother gets amorous with Steven. She says Martin wants it as much as she does, and Steven leaves.


title: The Killing of a Sacred Deer

text: Martin visits Steven's office, complaining of chest pain he worries is caused by the same condition that killed his father. The tests Steven runs show nothing wrong, and Martin invites Steven over again, saying his mother finds Steven attractive, but Steven responds that he is happy with his family. After this, Martin's demands for Steven's attention grow increasingly frequent and desperate, and Steven stops responding. He is troubled when Kim tells him that Martin gave her a ride home.


title: The Killing of a Sacred Deer

text: One morning, Bob says he cannot move his legs, so Steven and Anna rush him to the hospital. He recovers during his examination and is sent home, but then relapses and is admitted while more tests are done. Martin visits Bob and talks with Steven to explain that, to "balance things" for his father's death, which occurred in Steven's operating room, Steven must kill either Bob, Kim, or Anna, or else, within a few days, they will all die after becoming paralyzed, refusing to eat, and bleeding from the eyes. Steven has Martin escorted from the hospital and is troubled to see Bob refusing to eat.


title: The Killing of a Sacred Deer

text: Bob's condition does not improve, but no cause can be found. Kim, who has fallen in love with Martin, collapses and is also hospitalized. She chokes when Steven tries to make her eat, and she and Bob are given feeding tubes. Steven admits his true history with Martin to Anna, as well as that he had two drinks before operating on Martin's father. After witnessing Kim stand up when Martin tells her to do so over the phone and become paralyzed again when he hangs up, Anna is convinced that Martin has some sort of power, so she visits him to ask why she and her children should suffer for Steven's mistake. He says it is the closest thing that he can think of to justice.


title: The Killing of a Sacred Deer

text: Eventually, Kim and Bob are sent home. When Anna castigates Steven for both causing and not solving their predicament, he kidnaps Martin and ties him up in his basement. He beats Martin and shoots him in the leg, but Martin is not intimidated. The children argue over whom their father will choose to kill and try to curry his favor. Steven asks the school principal which of his children is "best". Anna tends to Martin's wounds and brings the children to see him, but fails to elicit any sympathy. She then tells Steven that he should kill one of the children, not her, because she can have another child. Kim fails to persuade Martin to heal her so they can run away together and then tells Steven how much she loves her family and offers her life to save theirs. Finally, hopeless, Anna releases Martin.


title: The Killing of a Sacred Deer

text: When Bob begins bleeding from his eyes, which Martin said would happen a few hours before death, Steven places him, Kim, and Anna in a circle, bound with duct tape, and covers their heads. Steven pulls a woolen hat over his face, spins around, and fires a rifle. He narrowly misses Kim and Anna, but the third shot kills Bob.


title: The Killing of a Sacred Deer

text: Some time later, Martin, his face still somewhat bruised, enters the diner where he and Steven used to meet. The remaining Murphys are inside and promptly leave. Martin watches as they go. Steven avoids his gaze, Anna shoots him an icy glare, and Kim, who is healed, glances back before walking out the door.


title: The Killing of a Sacred Deer

text: On 11 May 2016, it was announced that Farrell had been cast in the film, with Lanthimos directing from a screenplay he wrote with Filipou, and Film4 Productions and Element Pictures producing. Kidman was cast that June, and Silverstone, Cassidy, Camp, Keoghan, and Suljic joined the project in August.


title: The Killing of a Sacred Deer

text: By 23 August 2016, the film had begun principal photography at The Christ Hospital in Cincinnati. Shooting also took place in the Hyde Park and Northside neighborhoods of the city.


title: The Killing of a Sacred Deer

text: In May 2016, A24 acquired the film's U.S. distribution rights and Haut et Court acquired the French distribution rights. The film had its world premiere on 22 May 2017 at the 70th Cannes Film Festival, where Lanthimos and Filippou won the Best Screenplay award. It began its theatrical release on 20 October 2017 in the United States, and on 3 November 2017 in the United Kingdom and Ireland.


title: The Killing of a Sacred Deer

text: On review aggregator website Rotten Tomatoes, the film has an approval rating of based on reviews, with an average rating of ; the website's "critics consensus" reads: ""The Killing of a Sacred Deer" continues director Yorgos Lanthimos' stubbornly idiosyncratic streak—and demonstrates again that he is a talent not to be ignored." On Metacritic, the film has a weighted average score of 73 out of 100, based on 45 critics, indicating "generally favorable reviews".


title: The Killing of a Sacred Deer

text: "The Killing of a Sacred Deer" was named "one of the best horror movies of the year" by Joey Keogh of Wicked Horror, who called it "horror in its purest, most distilled form, freed from the shackles of jump scares or exposition." Keogh wrote that Keoghan is the film's "ace card", giving "his best, most self-assured performance to date" as Martin, the "supremely frightening yet weirdly charismatic creation who makes even the act of eating spaghetti seem terrifying." Zhuo-Ning Su of Awards Daily wrote that the film is "less complex than [Lanthimos's] previous work but engrosses and unsettles all the same", adding that it "palpably improves" in its second hour. While praising the cast, particularly Kidman, Su added that Keoghan "shines brightest as the plain but charismatic boy who's somehow not quite right", calling his performance "vivid" and "fully realised".


title: The Killing of a Sacred Deer

text: In a mixed review, Nicholas Bell of ION Cinema wrote that the "mysterious, highly metaphorical" film, which he compared to "something from the Old Testament", "finds the director getting a bit too hung up on his own idiosyncrasies." He also criticized Lanthimos's and Filippou's "overtly precise dialogue", which he felt "straitjacketed" the actors, but he praised director of photography Thimios Bakatakis and the "eerie" score. Bell summarized the film as "interesting, but a bit too ambiguous to remain as uncomfortably off-putting as it hopes".


title: The Killing of a Sacred Deer

text: Trace Thurman gave the film a five-star review in Bloody Disgusting, saying it would be "the most unsettling film you see this year" and giving particular credit to Lanthimos's direction and Bakatakis's cinematography, which he said give the film a "surreal, otherworldly quality". Thurman also praised the cast, writing that Farrell and Kidman "deliver their lines with a stilted coldness that sends chills up the spine", and calling the younger actors "equally impressive, with Keoghan being the standout. He gives an eerie performance that you believe to be that of a psychopath". Also writing for Bloody Disgusting, Benedict Seal gave the film a one-star review, stating that it had "none of the escalating intrigue and tension" of the "The Gift" and "The Witch", both released in 2015. Seal added that the film plays out "mechanically" after the reveal in the middle and said the visuals were "striking at times" but became "monotonous and garish", before summing up the film as "the biggest bum note yet from one of the most overrated directors in the art-house world" and "an epic embarrassment".


title: Gloria Vanderbilt

text: Gloria Laura Vanderbilt (February 20, 1924 – June 17, 2019) was an American artist, author, actress, fashion designer, heiress, and socialite.


title: Gloria Vanderbilt

text: During the 1930s, she was the subject of a high-profile child custody trial in which her mother, Gloria Morgan Vanderbilt, and her paternal aunt, Gertrude Vanderbilt Whitney, each sought custody of her and control over her trust fund. Called the "trial of the century" by the press, the court proceedings were the subject of wide and sensational press coverage due to the wealth and prominence of the involved parties, and the scandalous evidence presented to support Whitney's claim that Gloria Morgan Vanderbilt was an unfit parent.


title: Gloria Vanderbilt

text: In the 1970s, Vanderbilt launched a line of fashions, perfumes, and household goods bearing her name. She was particularly noted as an early developer of designer blue jeans.


title: Gloria Vanderbilt

text: Vanderbilt was born on February 20, 1924, in Manhattan, New York City, the only child of railroad heir Reginald Claypoole Vanderbilt of the Vanderbilt family and his second wife, Gloria Morgan Vanderbilt. When Vanderbilt was born, her father was heard to exclaim in delight, "It is fantastic how Vanderbilt she looks! See the corners of her eyes, how they turn up?" She was baptized in the Episcopal church by Bishop Herbert Shipman as Gloria Laura Vanderbilt. After her father's death, she was confirmed and raised in the Catholic Church, to which her mother belonged. From her father's first marriage to Cathleen Neilson, she had one elder half-sister, Cathleen Vanderbilt.


title: Gloria Vanderbilt

text: Upon their father's death from cirrhosis when Vanderbilt was 18 months old, she and her half-sister became heiresses to a half share each in a $5 million trust fund, equivalent to $ million in value. The control of Vanderbilt's share while she was a minor belonged to her mother, who traveled to and from Paris for years, taking her daughter with her. They were accompanied by a beloved nanny—Emma Sullivan Kieslich, whom young Gloria had named "Dodo"—who would play a tumultuous part in the child's life, and her mother's identical twin sister, Thelma, who was the lover of the Prince of Wales (later Edward VIII) during this time. As a result of her spending habits, her mother's use of finances was scrutinized by the child's paternal aunt, Gertrude Vanderbilt Whitney. A sculptor and philanthropist, Whitney wanted custody of her niece, which resulted in a custody trial. The trial was so scandalous that at times the judge would make everyone leave the room so as to listen to what young Vanderbilt had to say without anyone influencing her. Some people heard weeping and wailing inside the court room. Testimony was heard depicting Vanderbilt's mother as an unfit parent, including an allegation from a maid of a lesbian affair with a member of the British royal family. Vanderbilt's mother lost the battle and Vanderbilt became the ward of her aunt Gertrude.


title: Gloria Vanderbilt

text: Litigation continued, however. Vanderbilt's mother was forced to live on a drastically reduced portion of her daughter's trust, which was worth more than $4 million at the end of 1937, equivalent to $ million in value. Visitation was also closely watched to ensure that Vanderbilt's mother did not exert any undue influence upon her daughter with her supposedly "raucous" lifestyle. Vanderbilt was raised amidst luxury at her aunt Gertrude's mansion in Old Westbury, Long Island, surrounded by cousins her age who lived in houses circling the vast estate, and in New York City.


title: Gloria Vanderbilt

text: The story of the trial was told in the 1980 Barbara Goldsmith book "Little Gloria... Happy at Last" and a 1982 NBC miniseries based on it, which was nominated for six Emmy Awards and a Golden Globe Award. Actress Jennifer Dundas played Gloria.


title: Gloria Vanderbilt

text: Vanderbilt attended the Greenvale School on Long Island; Miss Porter's School in Farmington, Connecticut; and then the Wheeler School in Providence, Rhode Island, as well as the Art Students League in New York City, developing the artistic talent for which she would become increasingly known during her career. When Vanderbilt came of age and took control of her trust fund, she cut her mother off entirely, though they later were reconciled. Her mother died in Los Angeles in 1965.


title: Gloria Vanderbilt

text: From 1954 to 1963, Vanderbilt applied herself to acting. She studied acting at the Neighborhood Playhouse with teacher Sanford Meisner and debuted in 1954 in "The Swan," staged at Pocono Playhouse in Mountainhome, Pennsylvania. In 1955 she appeared on Broadway as Elsie in a revival of William Saroyan's "The Time of Your Life". Vanderbilt also appeared in a number of live and filmed television dramas including "Playhouse 90", "Studio One in Hollywood" and "The Dick Powell Show". She made an appearance in a two-part episode of "The Love Boat" in 1981. Other TV programs on which she appeared include "Person to Person" with Edward R. Murrow, "The Tonight Show Starring Johnny Carson", "The Oprah Winfrey Show", "Live! with Kelly and Michael" and "CBS News Sunday Morning".


title: Gloria Vanderbilt

text: Vanderbilt began her career as a fashion model when she was 15 years old, appearing in "Harper's Bazaar."


title: Gloria Vanderbilt

text: During the 1970s, Vanderbilt ventured into the fashion business itself, first with Glentex, licensing her name and a collection of her paintings for a line of scarves. In 1976, Indian designer Mohan Murjani's Murjani Corporation proposed launching a line of designer jeans carrying Vanderbilt's signature embroidered on the back pocket, as well as her swan logo. Her jeans were more tightly fitted than other jeans of that time and were an immediate success with customers.


title: Gloria Vanderbilt

text: In 1978, Vanderbilt sold the rights to her name to the Murjani Group and re-launched her own company, GV Ltd, which she had founded in 1976. With her company, she launched dresses, blouses, sheets, shoes, leather goods, liqueurs, and accessories. In the period from 1982 to 2002, L'Oreal launched eight fragrances under the brand name "Gloria Vanderbilt." Murjan sold rights to the name "Gloria Vanderbilt" to the owners of Gitano Group Inc. in 1988.


title: Gloria Vanderbilt

text: In the 1980s, Vanderbilt accused her former partners in GV Ltd. and her lawyer of fraud. After a lengthy trial (during which time the lawyer died), Vanderbilt won and was awarded nearly $1.7 million, but the money was never recovered.


title: Gloria Vanderbilt

text: She was also awarded $300,000 by the New York City Bar Association. Vanderbilt also owed millions of dollars in back taxes, since the lawyer had never paid the IRS, and she was forced to sell her Southampton, New York and Upper East Side homes.


title: Gloria Vanderbilt

text: Vanderbilt studied art at the Art Students League of New York. She became known for her artwork, with one-woman exhibitions held of her oil paintings, watercolors, and pastels. Her first exhibition was held in 1948. This artwork was adapted and licensed, starting about 1968, by Hallmark Cards and by Bloomcraft (a textile manufacturer), and Vanderbilt began designing specifically for linen, pottery, and glassware.


title: Gloria Vanderbilt

text: In 2001, Vanderbilt returned to art and opened her first art exhibition, "Dream Boxes", at the Southern Vermont Arts Center in Manchester; it was a critical success. She launched another exhibition of 35 paintings at the Arts Center in 2007. Two years later, Vanderbilt returned to the Arts Center as a panelist at its Annual Fall Show Exhibition, signing copies of her latest novel, "Obsession: An Erotic Tale".


title: Gloria Vanderbilt

text: Vanderbilt wrote two books on art and home decor, four volumes of memoirs, three novels, and a singular collection of short stories "The Things We Fear Most". She was also a regular contributor to "The New York Times", "Vanity Fair" and "Elle". In November 2010, Vanderbilt was the subject of a new book chronicling her life, "The World of Gloria Vanderbilt," written by Wendy Goodman, "New York" magazine's design editor. The book, published by Abrams Books, featured many previously unreleased photographs.


title: Gloria Vanderbilt

text: In January 2017, HarperCollins Publishers released a book, coauthored by Vanderbilt and her son Anderson Cooper, "The Rainbow Comes and Goes: A Mother and Son On Life, Love, and Loss". The book was described by its publisher as: "A touching and intimate correspondence between Anderson Cooper and his mother, Gloria Vanderbilt, offering timeless wisdom and a revealing glimpse into their lives".


title: Gloria Vanderbilt

text: On April 9, 2016, HBO premiered "Nothing Left Unsaid: Gloria Vanderbilt & Anderson Cooper", a two-hour documentary, produced and directed by Liz Garbus. It features a series of conversations between the mother and son, covering her life and family history in the public eye.


title: Gloria Vanderbilt

text: Vanderbilt was married four times, divorced three times, and gave birth to four sons, in all. She also had other relationships.


title: Gloria Vanderbilt

text: In 1941, aged 17, Vanderbilt went to Hollywood, where she became the second wife of Pat DiCicco, an agent for actors and an alleged mobster. They divorced in 1945 and had no children together. She later alleged that DiCicco was an abusive husband who called her "Fatsy Roo" and beat her. "He would take my head and bang it against the wall," Vanderbilt said, "I had black eyes."


title: Gloria Vanderbilt

text: In April 1945, within weeks of divorcing DiCicco, Vanderbilt married conductor Leopold Stokowski, who was 42 years her senior. He had three daughters by his previous marriages to Olga Samaroff, an American concert pianist, and Evangeline Love Brewster Johnson, a Johnson & Johnson heiress. She was his third and last wife. The marriage ended in divorce in October 1955 and produced two sons: Leopold Stanislaus "Stan" Stokowski (born August 22, 1950), and Christopher Stokowski (born January 31, 1952). Stan has three children; Christopher has no children.


title: Gloria Vanderbilt

text: Vanderbilt's third husband was the director Sidney Lumet. She was the second of his four wives. They were married on August 28, 1956, and divorced in August 1963. They had no children together.


title: Gloria Vanderbilt

text: Vanderbilt's fourth marriage was to author Wyatt Emory Cooper, on December 24, 1963. The marriage, which lasted 15 years, ended with his death in 1978 while he was undergoing open-heart surgery. They had two sons: Carter Vanderbilt Cooper (January 27, 1965 – July 22, 1988), who committed suicide at age 23 by jumping to his death from the family's 14th-floor apartment, and Anderson Hays Cooper (born June 3, 1967), a CNN news anchor.


title: Gloria Vanderbilt

text: Vanderbilt maintained a romantic relationship with photographer and filmmaker Gordon Parks for many years until his death in 2006. Other relationships included Marlon Brando, Frank Sinatra, Howard Hughes and Roald Dahl.


title: Gloria Vanderbilt

text: Vanderbilt was very close friends with fashion designer Diane von Fürstenberg. While appearing as a guest on her son Anderson Cooper's television talk show, "Anderson" on September 19, 2011, Vanderbilt referred to comedian and actress Kathy Griffin as her "fantasy daughter".


title: Gloria Vanderbilt

text: Truman Capote was speculated to have modeled the character of Holly Golightly in "Breakfast at Tiffany's" on Vanderbilt, but others say it was based on her friend Carol Grace.


title: Gloria Vanderbilt

text: Vanderbilt was also an artist. When she celebrated her 90th birthday on February 20, 2014, a collection of her drawings, paintings and collages was placed on display in the 1stdibs Gallery at New York Design Center in New York City, in an exhibit called "The Left Hand Is The Dreamer".


title: Gloria Vanderbilt

text: Vanderbilt was baptized into the Episcopal Church as an infant, but was raised a Roman Catholic and as a child was particularly fascinated with St. Therese. Although religious in her youth, she was not a practicing Catholic in her later years.


title: Gloria Vanderbilt

text: Vanderbilt died at her home in Manhattan on June 17, 2019, aged 95 of stomach cancer. She is buried next to her son Carter and late husband Wyatt in the Cooper plot in the Vanderbilt Family Cemetery on Staten Island, New York.


title: Gloria Vanderbilt

text: Upon her death, Vanderbilt left her son, Anderson Cooper, almost her entire estate, which was valued at less than $1.5 million.


title: Republics of the Soviet Union

text: The Republics of the Union of Soviet Socialist Republics or the Union Republics () were national-based administrative units of the Union of Soviet Socialist Republics (USSR). The Soviet Union was formed in 1922 by a treaty between the Soviet republics of Byelorussia, Russia, Transcaucasia, and Ukraine, by which they became its constituent republics.