The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron

Until the spring of 2001, the Houston energy giant Enron epitomized the triumph of the new economy. Feared by rivals, worshiped by investors, Enron seemingly could do no wrong. Its profits rose every quarter; its stock price surged ever upward; its leaders were hailed as visionaries.

Then a young Fortune writer named Bethany McLean wrote an article posing a simple question — How, exactly, does Enron make its money? — and the company's house of cards began to collapse. Though other business scandals would follow, none has had the shattering effect of Enron's bankruptcy, which caused Americans to lose faith in a system that rewarded top insiders with millions of dollars while small investors, including many Enron employees, lost everything.

Despite enormous media coverage of Enron, the definitive story of its astonishing rise and fall comes alive for the first time in this gripping narrative, by McLean and her Fortune colleague Peter Elkind. Drawing on a wide range of private documents and well-placed sources, many of them exclusive, McLean and Elkind lead you behind closed doors and deep into Enron's past, to pierce the veil of secrecy that has surrounded the company's inner workings and corrupt culture.

The Smartest Guys in the Room is fundamentally a human drama — of people drunk on their own success, people so ambitious, so certain of their own brilliance, so fueled by greed and hubris that they believed they could fool the world. The book explores the motives, thoughts, and secret fears of a fascinating array of characters, including:

• Ken Lay, the genial but clueless CEO who reveled in the trappings of his office but ducked the responsibilities. From the earliest days of Enron, his weakness allowed greedy lieutenants to run amok.
• Jeff Skilling, the brooding, mercurial genius who was the architect of Enron's greatest triumphs — and its ultimate disgrace. "I am Enron," he once boasted. As the company unraveled, so did Skilling.
• Rebecca Mark, the glamorous "It" girl of Enron International who raced around the globe in high style and battled Skilling for control of the company.
• Andy Fastow, the brutally ambitious, deeply insecure whiz kid. Inside Enron his colleagues marveled at how his complex schemes allowed the company to scam Wall Street — not realizing that he was secretly scamming Enron.
• Ken Rice, the Midwestern farm boy who was seduced by Enron's fast-money culture and who cashed in while hyping a high-tech business that didn't exist.
• Cliff Baxter, the manic deal maker and Skilling confidant who resented Fastow's murky self-dealing. "He's a goddamn master criminal," Baxter would rail.

Just as Watergate was the defining political story of our time, so Enron is the biggest business story of our time. And just as All the President's Men was the one Watergate book that gave readers the full story, with all the drama and nuance, The Smartest Guys in the Room is the one book you have to read to understand this amazing business saga.

"The book's sober financial analysis supplements that of Mimi Swartz's Power Failure, while offering additional perspectives that flesh out the details of the Enron story." Publishers Weekly

"The portrait of the narcissistic culture fostered by Enron's president, Kenneth Lay...is so vivid that the reader is amazed but not really shocked when the boom of the late 90's provides the spark that ultimately engulfs the entire enterprise in flames." Jonathan A. Knee, The New York Times Book Review

"Masterful....News junkies and mystery lovers who enjoy financial scandals will devour this multilayered book." USA Today

"Compelling....[A] cautionary tale about highfliers who weren't as clever as they thought." Entertainment Weekly

"This is the most thorough examination of Enron to date....Laying extensive groundwork, the authors ably convey the multidimensional nature of this story." David Siegfried, Booklist

Named "one of the ten best business books of 2003" (BusinessWeek), this national bestseller is updated with new material on the amazing rise and scandalous fall of Enron. It includes a 16-page photo insert.

Just as Watergate was the defining political story of its time, so Enron is the biggest business story of our time. And just as All the Presiden‛s Men was the one Watergate book that gave readers the full story, with all the drama and nuance, The Smartest Guys in the Room is the one book you have to read to understand this amazing business saga. And the critics agree:

“This book is right up there with Den of Thieves and Barbarians at the Gate. . . . Those who want to learn what happened here, you do‛t have to read anything but this” —James Cramer, CNBC

“The best book about the Enron debacle to date. . . . Based on hundreds of interviews and fresh details, McLean and Elkind masterfully weave together the many strands of the Enron story. They shine in their characterizations of Enro‛s often incompetent executives” —Wendy Zellner, BusinessWeek

“News junkies and mystery lovers who enjoy financial scandals will devour this multilayered book. . . . The Smartest Guys in the Room will rival other models of the genre, including James Stewar‛s Den of Thieves. . . . The authors write with power and finesse. Their prose is effortless, like a sprinter floating down the track. . . . The character sketches of former chairman Kenneth Lay, former CEO Jeff Skilling and ex-chief financial officer Andrew Fastow are masterful” — Edward Iwata, USA Today

“Powerful and shocking. . . . succeed[s] in opening a disturbing window into both the company and the era . . . filled with fascinating characters and anecdotes” —Jonathan A. Knee, The New York Times Book Review

“The Smartest Guys in the Room is utterly professional, readable and—even though you know wha‛s coming—highly entertaining” —Daniel Gross, The Washington Post

“Meticulously reported and compelling . . . a cautionary tale about highfliers who were‛t as clever as they thought” —David Koeppel, Entertainment Weekly

Bethany McLean and Peter Elkind are both senior writers at Fortune magazine. McLean is a former analyst for Goldman Sachs. Elkind is the former associate editor of Texas Monthly.