Up In Smoke
Enron used political ties to rid itself of regulators. But in the end, its supposed free-market trailblazing only burned investors.

Late in the afternoon of July 31, 2000, a who's who of Republicans -- Texans as well as national party officials -- jammed into elevators of a downtown Philadelphia office building, a few blocks from the GOP National Convention. When the doors slid open on the 50th floor, they spilled into the Top of the Tower banquet room for piles of pasta and prime beef, free-flowing liquor and the heady aroma of curried favor.

These guests of the Enron Corporation gazed from the peak of the pink granite shaft on Arch Street onto a view that stretched into three states. In this moment, with Enron favorite son George W. Bush prepared to accept his party's presidential nomination, the party crowd must have felt they could see all the way to the White House.

Enron's shares were selling for $90 on the New York Stock Exchange that summer. Hard-driving traders at the company's electronic power emporium, Enron Online, were getting $275 per megawatt-hour in California's deregulated energy market.

The company was already the largest marketer of natural gas and electricity in the world. With the prospect of a friend in the White House, maybe even a Republican-led Congress, the future seemed to hold no limits. Politicos paid tribute with their presence to a company that had morphed itself, in only a decade, from a stodgy gas pipeline company to a self-hyped capitalist dream machine under the driving force of founder Kenneth Lay.