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Book Reviews:

24 Days: How Two Wall Street Journal Reporters Uncovered the Lies that Destroyed Faith in Corporate America

by Rebecca Smith and John R. Emshwiller
Book Review By Lucas Everidge

Question: How long does it take from the time clever investigative journalists uncover financial fraud in a major corporation, to the point where that corporation completely disintegrates?
Answer: 24 days

This is the length of time it took Enron, one of most respected and profitable companies in the 1990's, to completely unravel. This proud company, based in Houston, Texas, had revenues in 2000 topping $100 billion, earning it seventh place in Fortune Magazine's list of 500 largest companies.

This remarkable episode began and ended thanks to the fantastic investigative reporting by two Wall Street Journal reporters who cover the energy beat, Rebecca Smith and John R. Emshwiller.

In an arena where Enron was just one of many energy companies Smith and Emshwiller covered in the course of daily news deadlines, they were able to put together pieces of Enron data that clearly didn't add up. Their book offers a fascinating inside perspective as to how it came about.

Particularly interesting during this period is how almost every other news firm and financial analyst, even those whose jobs more directly related to Enron, completely missed this story.

According to the writers, the catalyst was a telephone call from Mark Palmer, public relations chief for Enron, with the news "Jeff Skilling, our CEO, is resigning."

Why would Skilling, one of the company's "golden boys" resign? He had been given the job just a few months earlier, filling the seat of chairman Ken Lay. Everyone expected him to be running the company for years; instead "he'd barely gotten the seat warm."

This was before they uncovered the now infamous off-book partnerships like LJM and Chewco but, as the book moves through the events, all the pieces of the puzzle fall into place.

At this point nobody had ever heard of Andy Fastow, Enron's CFO or his assistant Michael Kopper who, it turned out, ran these partnerships. By following the book, the reader gets a clear understanding of how Enron's reactions to continually breaking bad news only brought more questions, sinking them even further.

By the end of that same year, Enron had sought federal bankruptcy law protection and become a national symbol of corporate fraud and accounting misdeeds. Though Enron's financial double-talk and shell games had been laying the groundwork for disaster for four years, everything crashed in a death spiral over a period of several weeks in the fall of 2001.

Smith and Emshwiller write in plain news style of how the company's elliptical disclosures and cryptically explained charges against earnings provided the reporters their first crucial clues to the disaster lurking behind the numbers.

This story provides a good lesson on the workings of capitalism, and how it enforces ethical behaviour. The entire tale of corporate fraud was uncovered by the Wall Street Journal, one of the world's finest business publications and ardent spokesman for free market economics. Even under the workings of capitalism, fraud and illegal behavior is ultimately rewarded by the market, in this case total meltdown.

But no such philosophical speculation is provided by Smith and Emshwiller in "24 Days". The book provides just the facts, ma'am, buttressed by perceptions and emotions of the writers. The final package is a well-written, informative book about this most-interesting event in recent business history.

In the future, many others will certainly write their interpretations of these events. 24 Days is our opportunity to understand this from central figures who were present and there.

-Lucas Everidge