Ten Years Later, Some Press a Different View of Enron
By: LLANO, TX – When Enron filed for bankruptcy on December 2, 2001—at the time the largest bankruptcy in U.S. history—the once high-flying energy company cemented its reputation as the very symbol of corporate fraud.
Its top executives, including Chairman Ken Lay, CEO Jeffrey Skilling and Chief Financial Officer Andy Fastow became household names, and the term “Enron accounting” joined the business and political lexicons.
Eventually, dozens of high-profile convictions and some tough corporate reforms later, the public moved on.
But on a sprawling, picturesque ranch here in the Texas hill country outside Austin, F. Scott Yeager can’t move on. Not yet.
“I try to put behind me, I try to go on with life,” Yeager said in an exclusive interview. “But the part that keeps taking me back, let's call it, the injustice anger part.”
After years of silence, Yeager agreed to speak to CNBC in hopes of changing the widespread public perceptions about Enron and the sweeping federal investigation that followed. He was one of dozens of executives ensnared in that probe, but in 2009 became one of the only ones cleared of criminal charges, in a case that went all the way to the Supreme Court. He has left the bustle of Houston and moved to the ranch in Llano, where he does consulting.
But rather than be content having cleared his own name, he wants to clear Enron’s name as well.
“I think that the perception—and I'll call it the Enron myth—is very solidified in the country,” he said. “And it is definitely incorrect and inaccurate.”
Yeager, 60, is one a small but increasingly vocal group of ex-Enron employees still trying to rewrite the legacy of Enron, ten years after the firm’s epic collapse.
He was a top executive at Enron Broadband Services (EBS)—a tiny division, but one that prosecutors claimed was a prime example Enron’s fraud. They accused executives of misleading investors by over-hyping the division’s prospects at the height of the technology bubble.
Yeager, who helped develop many of the unit’s products in the 1990s, was accused of conspiracy and insider trading for selling stock with the knowledge that the technology being touted to investors didn’t actually work.
“Yes, it did work,” he said. “In multiple ways.”
Prosecutors claimed Enron did not yet have the software it would need to run its broadband network, but Yeager said it did.
“I was in New York, and saw it work. I was in San Francisco and saw it work. I personally used streaming media. So I know it worked.”
He still holds onto hundreds of computer files and video demonstrations that he says are proof Enron was not a fraud, but a pioneer in many technologies that are commonplace today.
One demonstration from 1999 narrated by Yeager appears to show an early concept of cloud computing, in which a user could access online applications or “apps” through an Enron network.
“You would ride across the Enron ‘cloud’ all the way to the source of the content,” the video says.
“We drew everything as a cloud back then,” Yeager said. “We didn’t coin it. But the notion of cloud computing as a bunch of servers distributing inside of networks—the internet—and that you would get services from them close to where you are physically, we did come up with that idea.”
Another video from 2000 shows an early concept of video conferencing. “Enron Communications is changing how the world communicates,” the video says.
And yet another presentation from 2000 includes a demonstration of an on-demand movie service similar to those available on most cable TV systems today:
“Once the end user selects the movie, it takes just a second for the video stream to begin,” the demonstration says.
