become chairman.”
No one spoke; no one moved.
“This company needs one leader and one leader only,” Strauss continued. “There has to be no doubt about that. So, effective right now, I resign as chairman, I resign from the board, and I am going back to Omaha.”
Strauss walked out—no good-byes, no handshakes. In that moment Lay understood Strauss’s request from the week before; he had tied Lay’s hands to the steering wheel before jumping out of the car. It was the ultimate rebuke to the board; the company had only one driver now, and the board could either support him or crash.
The directors sat in silence, until finally one of them spoke up. “I nominate Ken Lay as chairman.”
The vote was immediate and unanimous. Lay assumed total control. Before the year was out, his own supporters had a majority on the board—enough to succeed in moving the headquarters to Houston. But the tumult that surrounded the creation of his company was far from over.
“Enteron.” The decision seemed final. HNG/InterNorth would abandon its awkward name and be rechristened “Enteron.” It would be the strongest signal of the company’s emergence into the new Lay era. On February 19, 1986, eight days into Lay’s chairmanship, the company announced that the new name would be put to a shareholder vote in April.
The name had been proposed by Lippincott & Margulies, a pricey NewYork consulting firm that had spent three months and millions of dollars on the project. It derived from an analysis of the company’s business—“En” for “energy,” “ter” for “international” and “InterNorth,” and “on” because it sounded cool. After thinking it up, the consultants had checked around the world to be sure no other company was using the name and that it did not have some vulgar meaning in another language.
Problem was, no one bothered to check
Webster’s
. “Enteron” is also a word for the digestive tube running from the mouth to the anus—particularly unfortunate, given that Lay’s company produced natural gas. Within days of the announcement, the soon-to-be Enteron was a laughingstock.
It all came to a head one Saturday as Lay and his two top advisers—Mick Seidl, his president, and Rich Kinder, his general counsel—jogged three miles in Houston’s Memorial Park, debating what to do. Seidl and Kinder believed that the issue would blow over in little time; Lay was equally adamant that the new name had to go.
Two days later, Lay contacted the naming consultants, informing them that either they needed to figure out a new name quickly or it would stay HNG/InterNorth. Somehow, the work that took three months for the first name was repeated in little more than a week. Lay liked the new suggestion immediately; the shareholders overwhelmingly approved it.
HNG/InterNorth would from then on be known as Enron, a name that in its first days was already on its way to being bound up in scandal.
———
The limousine eased along the sidewalk outside the New York airport, stopping where David Woytek and two other auditors were waiting. It was days after the big showdown in Houston over the secret bank accounts, and Woytek and his colleagues—including John Beard and Carolyn Kee, an Arthur Andersen partner—had come to New York to conduct the inspection of the trading unit that Lay ordered. They loaded their luggage and climbed in the limo—provided by Borget, the unit’s head—which took them to the offices at the Mount Pleasant Corporate Center. But they were forbidden to enter without being announced, and once they were inside, Borget ordered them not to speak to his traders.
“I don’t want you stirring them up and making me lose people,” Borget told them.
For three days, the auditors played cat and mouse, with Borget and Mastroeni providing the bare minimum of the records they requested. Finally, on the third day, Woytek had had enough. He flagged down Borget.
“What’s the matter?” Borget
No one spoke; no one moved.
“This company needs one leader and one leader only,” Strauss continued. “There has to be no doubt about that. So, effective right now, I resign as chairman, I resign from the board, and I am going back to Omaha.”
Strauss walked out—no good-byes, no handshakes. In that moment Lay understood Strauss’s request from the week before; he had tied Lay’s hands to the steering wheel before jumping out of the car. It was the ultimate rebuke to the board; the company had only one driver now, and the board could either support him or crash.
The directors sat in silence, until finally one of them spoke up. “I nominate Ken Lay as chairman.”
The vote was immediate and unanimous. Lay assumed total control. Before the year was out, his own supporters had a majority on the board—enough to succeed in moving the headquarters to Houston. But the tumult that surrounded the creation of his company was far from over.
“Enteron.” The decision seemed final. HNG/InterNorth would abandon its awkward name and be rechristened “Enteron.” It would be the strongest signal of the company’s emergence into the new Lay era. On February 19, 1986, eight days into Lay’s chairmanship, the company announced that the new name would be put to a shareholder vote in April.
The name had been proposed by Lippincott & Margulies, a pricey NewYork consulting firm that had spent three months and millions of dollars on the project. It derived from an analysis of the company’s business—“En” for “energy,” “ter” for “international” and “InterNorth,” and “on” because it sounded cool. After thinking it up, the consultants had checked around the world to be sure no other company was using the name and that it did not have some vulgar meaning in another language.
Problem was, no one bothered to check
Webster’s
. “Enteron” is also a word for the digestive tube running from the mouth to the anus—particularly unfortunate, given that Lay’s company produced natural gas. Within days of the announcement, the soon-to-be Enteron was a laughingstock.
It all came to a head one Saturday as Lay and his two top advisers—Mick Seidl, his president, and Rich Kinder, his general counsel—jogged three miles in Houston’s Memorial Park, debating what to do. Seidl and Kinder believed that the issue would blow over in little time; Lay was equally adamant that the new name had to go.
Two days later, Lay contacted the naming consultants, informing them that either they needed to figure out a new name quickly or it would stay HNG/InterNorth. Somehow, the work that took three months for the first name was repeated in little more than a week. Lay liked the new suggestion immediately; the shareholders overwhelmingly approved it.
HNG/InterNorth would from then on be known as Enron, a name that in its first days was already on its way to being bound up in scandal.
———
The limousine eased along the sidewalk outside the New York airport, stopping where David Woytek and two other auditors were waiting. It was days after the big showdown in Houston over the secret bank accounts, and Woytek and his colleagues—including John Beard and Carolyn Kee, an Arthur Andersen partner—had come to New York to conduct the inspection of the trading unit that Lay ordered. They loaded their luggage and climbed in the limo—provided by Borget, the unit’s head—which took them to the offices at the Mount Pleasant Corporate Center. But they were forbidden to enter without being announced, and once they were inside, Borget ordered them not to speak to his traders.
“I don’t want you stirring them up and making me lose people,” Borget told them.
For three days, the auditors played cat and mouse, with Borget and Mastroeni providing the bare minimum of the records they requested. Finally, on the third day, Woytek had had enough. He flagged down Borget.
“What’s the matter?” Borget
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