Title: Conspiracy Of Fools: A True Story Author: Kurt Eichenwald Publisher: Broadway Books (A division of Random House) ISBN: 0767911784

As I reached the end of the 675 - pages of Kurt Eichenwalds saga of Enron recounted in Conspiracy of Fools A True Story, I walked away shaking my head in disgust and at the same time shock!

Award winning journalist, Eichenwald, has written for the New York Times for more than seventeen years. Letting the facts tell the story, Conspiracy of Fools, A True Story, is based on the authors more than one thousand hours of interviews he conducted with over a hundred participants. Combing through thousands of confidential corporate and government documents, contemporaneous records, personal diaries, and best recollections of the participants, the author delivers a compelling and superb recounting of just what transpired- all with believable dialogue.

It is difficult to conceive just how was it possible that a prestigious accounting firm, Arthur Anderson & Co, could with just a wink and nod accept the creative accounting shenanigans that were practiced at Enron? Although, it should be noted that Enron, at the time and prior to the change in the rules of acceptable accounting practices for energy companies, was legally permitted to use "mark to market" accounting, which allows companies to count as current earnings, profits they expect to earn in the future, from energy-related contracts. This was very cleverly used to prop up the balance sheet, keeping the banks and credit raters content.

Can we honestly believe that so called smart business people like Ken Lay, Enrons Chairman and CEO and Jeff Skilling, its President, did not know about or were not concerned with the fraudulent activities of their chief financial officer, Andrew Fastow?

Even until the end of his days at Enron, Fastow never did explain in a precise manner the poor financial condition of the company that had been the result of his incompetence and venality.

Furthermore, through the ineptness of Fastow, Enron was not tracking their cash in order to know when they were experiencing shortfalls-an essential requirement to know when and if they could pay their bills. Apparently, nobody had a clue as to how much daily cash was collateral posted by trading partners and how much was coming in from the business.

What is so mind-boggling is Fastows paradoxical behavior. He may not have understood basic business principles or Finance 101, however, he was quite clever in swindling from Enron over sixty million dollars with his masterminding of off the- books personal partnerships, wherein he hid billions of dollars in debt and artificially boosted the companys profits. As long as the share price of Enron was propped up and be damned at everything else, everyone went along for the ride without digging too deeply and asking too many questions. The old adage, hear no evil, see no evil.

Eichenwald also brings to light how Enron became involved in all kinds of activities that had little to do with their principal line of energy business. As the author states, under the stewardship of Skilling, Enron was changed into a radically different beast.

This all led to Enrons pursuing of contradictory strategies and a loss of focus, wherein you had at the one end dealings that brought in huge earnings with little cash that were dependent on Enrons credit rating. On the other hand, you had activities devouring huge amount of cash, while producing very little earnings for years that would potentially put their credit ratings at risk.

Furthermore, our CFO, Fastow, did not have the foggiest idea about how to calculate investment returns!

You had a company that lied to its investors, hid losses to make itself look good, and executives who siphoned off company funds, all under the noses of their top officers.

A recipe just waiting for disaster!

In all fairness, I should add that there were several executives, who to some degree, did complain about some of the creative accounting that was going on at Enron.

This is a remarkable and engrossing read that chronicles a multi-billion dollar sham that came to light in 2001.

One question, however, still lingers on in my mind, how many more Enrons are there lurking in the shadows? Will we ever put an end to this shameless behaviour on the part of some public companies? Just ponder the wider effects it has on innocent employees, who not only loose their jobs, but also in many instances, their life savings and pension plans?

Just in passing, Ken Lay has been indicted and faces criminal charges that include security and wire fraud and making false statements. Jeff Skilling, likewise, faces thirty- six charges, including fraud and insider trading. Fastow has pleaded guilty to two counts of wire and securities fraud and is now serving a ten- year sentence without parole. He has agreed to co-operate with the authorities. Stay tuned.