In Conversation with Former Enron CFO Andy Fastow Part One

**Richard Kramer** (0:02)
Welcome back to Bubble Trouble, conversations between our real life double act of the independent analyst Richard Kramer, that's me, and the economist and author Will Page, that's him, and this is what we do. If there's a bubble that burst, we pricked it first. We have reached our 100th episode of laying out inconvenient truths about how business and financial markets really work. From exposing sycophants and stenographers of Wall Street who just praise, not appraise companies they're covering.
We've smacked the SPACs and we were early in calling out NFTs, they were not for me. And taking inspiration from the who's won't get fooled again, we ask why do we find ourselves constantly getting back into bubble trouble? Don't markets ever learn? So today we take you back with one of the biggest bubbles bursting in living memory, Enron, which went from America's seventh largest company to bankrupt within a year at the turn of the millennium. How many booms, busts, frauds and financial irregularities have we witnessed since then? We lost count. A hundred episodes in, we get to sit down and learn from Andy Fastow, the former CFO of Enron, who we've wanted as a guest on this pod since, well, before the podcast began.
Buckle up for a conversation about what happened that fateful year, why it's continued to happen since, and honestly, where and how, not if the same is going to happen again. Today, the first part of a two episode conversation with Andy Fastow.

**Will Page** (1:27)
Andy, to welcome you to the podcast. To say this is a dream come true would not be an exaggeration. The purpose of Bubble Trouble wasn't just to get you on the show. I think the purpose of Bubble Trouble was inspired by you. In particular, a talk that you gave in London in 2015, a sweltering heat wave of a summer, a Financial Times event, Financial Times being a huge friend and supporter of this show. I had done some panel about Spotify, lost a lot of body fluid on stage. It was that hot. I walked into a big tent and I saw you on stage. And I'll just preface this by saying, Bethany McLean and Peter Elkins' Smartest Guys in the Room is one of my favorite books and documentaries of all time. And I'll never forget the scene where you held aloft two items.
On one hand, you had the CFO of the Year Award. On the other hand, you had a prison card.
And you asked the audience, how is it possible that one person can be given these two things within 12 months of each other?
And I'm sitting at the front row in that marquee, and I just felt I had to put my seatbelt on because nobody else could tell this story. So I am grateful that you're here today.

**Andy Fastow** (2:33)
Well, thanks, Will. Thanks, Richard.
Happy to be here. I guess I have to ask the first question. If I was the inspiration for this podcast, how come I don't have a piece of it?

**Will Page** (2:45)
So I've worked in copyright for many years. So you have a performing right.
You've registered with Ascap, you'll get royalties.

**Andy Fastow** (2:52)
Okay. But I guess I'd start out by saying when I held those two items up, Will, back at the Alphaville Conference in London, I didn't just say, how is it possible that I got both of these within such a short period of time? I said, how is it possible that I got both of these for doing the same deals within the same amount of time? And that was really the essence of the talk, is that it's possible to do deals that technically follow the rules, but at the same time are misleading or ultimately fraudulent, which is what I did.
And let me make one thing clear if I can.
Before I talk about Enron, before I talk about my own actions, and if your audience were to remember just one thing about my comments today, I hope this is what they remember. I believe that what I did was wrong. I believe that what I did was unethical and I believe that what I did was illegal. I take full responsibility for my actions. And in fact, I consider myself one of the people most responsible for Enron's failure. So I own that. So please, for those who are listening, when you hear me talk about what happened at Enron and try to provide some insight into what happened at Enron and how that might be relevant today, and I think it is relevant today, in no way is that me making an excuse for my actions or minimizing what I did or trying to blame other people for what I did. Absolutely not. I own it and I'm responsible for it.