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September 23, 2003
Book Review--24 Days: How Two Wall Street Journal Reporters Uncovered the Lies that Destroyed Faith in Corporate America
    by William Baue

A new book tells the behind-the-scenes story of Enron's demise and the detective work that revealed the chicanery in Enron's corporate practices and culture.

The fallout from the collapse of Enron is all too clear, with investors' confidence in corporate America eroded and regulation changes such as the Sarbanes-Oxley Act's reforms of corporate governance and accounting oversight. However, the story behind Enron's plummet remains murky to most, hidden behind a web of complex accounting sleights-of-hand and Byzantine corporate structures.

Rebecca Smith and John Emshwiller's new book, 24 Days: How Two Wall Street Journal Reporters Uncovered the Lies that Destroyed Faith in Corporate America, reveals the behind-the-scenes story of Enron's fall-from-grace. This book reads like a cross between several different genres: a mystery/detective novel, a history, a morality play, and an autopsy report, to name just a few. Readers might be surprised to discover that it is a page-turner, engrossing in its play-by-play recounting of the toppling of a corporate giant.

"The story is a mystery tale," said Ms. Smith and Mr. Emshwiller, both Wall Street Journal reporters. "We began with some clues and oddities about a seeming juggernaut of a giant corporation."

For example, Ms. Smith and Mr. Emshwiller's detective work revealed the potential conflict-of-interest of Enron chief financial officer Andrew Fastow running LJM1 and LJM2, investment vehicles that supposedly operated independently of Enron. These revelations, reported in an August 28, 2001 article, helped initiate the domino effect that eventually toppled Enron.

"Like any good mystery, the pursuit of those clues led us down false paths to dead ends," they continued. "But there were also moments of discovery that produced stories that were widely viewed as having been influential in the Enron saga."

This influence represents the best and the worst that the book has to offer. It is fascinating that Mr. Emshwiller's obsession with a potentially inconsequential partnership, Chewco (named after the hairy but endearing Star Wars character Chewbacca), turned out to be a hub of Enron's accounting shenanigans.

However, the book also includes extended parenthetical asides (possibly additions of editors and not the authors) meant to highlight the role of the venerable newspaper in breaking the Enron story. These addendums, seemingly inserted as self-serving promotions for the Journal, actually detract from the story. The hype is unnecessary, as intelligent readers can discern for themselves the paper's importance.

The authors' decision to use the third person instead of the first person creates another distraction for readers. It is awkward when the authors speak about themselves from a distance, as if trying to maintain objectivity, especially since the most interesting aspect of the Enron story is how it intertwines the global and the personal. Ms. Smith and Mr. Emshwiller document the international business deals as well as the fates of individual Enron employees, so their decision to obscure their own personal voices in this story represents a missed opportunity to paint a more complete picture.

However, these are rather minor problems when considering the scope of the subject matter. This book tells the story not just of Enron's demise, but also of a transition in corporate culture. Before Enron's fall, few investment analysts were questioning Enron's opaque disclosure practices. Now, transparency, corporate governance reform, and codes of conduct are the order of the day.

24 Days provides a detailed map of the terrain traversed between pre- and post-Enron. The detective and mystery elements of the story will keep readers entertained. Other elements of the story (its detailed history and its dissection of Enron's corpse) may prove even more important to advocates of disclosure, improved corporate governance, and bolstered business ethics. In order to promote corporate responsibility, one must understand corporate irresponsibility, which Enron exemplified.


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