Editing Enron (section)

===Misleading financial accounts===
{{Main|Enron scandal}}

In 1990, Enron's chief operating officer Jeffrey Skilling hired Andrew Fastow, who was well acquainted with the burgeoning deregulated energy market that Skilling wanted to exploit.<ref>{{cite book|last1=McLean|first1=Bethany|author-link1=Bethany McLean|last2=Elkind|first2=Peter|title=The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron|publisher=Portfolio|date=2003|location=New York, New York|pages=134|language=EN|isbn=1-59184-008-2}}</ref> In 1993, Fastow began establishing numerous [[limited liability]] [[special-purpose entity|special-purpose entities]], a common business practice in the energy industry. However, it also allowed Enron to transfer some of its liabilities off its books, allowing it to maintain a robust and generally increasing stock price and thus keep its critical investment-grade credit ratings.{{citation needed|date=November 2015}}

Enron was originally involved in transmitting and distributing electricity and natural gas throughout the US. The company developed, built, and operated power plants and pipelines while dealing with rules of law and other infrastructures worldwide.{{citation needed|date=November 2015}} Enron owned a large network of natural gas pipelines, which stretched coast to coast and border to border including Northern Natural Gas, [[Florida Gas Transmission]], [[Transwestern Pipeline]] Company, and a partnership in [[Northern Border Pipeline]] from Canada.{{citation needed|date=November 2015}} The states of California, New Hampshire, and Rhode Island had already passed power deregulation laws by July 1996, the time of Enron's proposal to acquire Portland General Electric corporation.<ref>{{cite book|last=Fox|first=Loren|title=Enron: the rise and fall|page=113|publisher=John Wiley & Son|year=1003|isbn=0-471-47888-1}}</ref> During 1998, Enron began operations in the [[water sector]], creating the Azurix Corporation, which it part-floated on the [[New York Stock Exchange]] during June 1999. Azurix failed to become successful in the water utility market, and one of its major concessions, in [[Buenos Aires]], was a large-scale money-loser.<ref>{{Cite web |last=GOLDBERG |first=LAURA |date=2002-03-26 |title=Enron's Azurix to sell Wessex Water at loss |url=https://www.chron.com/business/enron/article/Enron-s-Azurix-to-sell-Wessex-Water-at-loss-2068402.php |access-date=2022-05-20 |website=Chron |language=en-US}}</ref>

Enron grew wealthy due largely to marketing, [[promotion (marketing)|promoting]] power, and having a high stock price.{{citation needed|date=July 2012}} Enron was named "America's Most Innovative Company" by ''[[Fortune (magazine)|Fortune]]'' for six consecutive years, from 1996 to 2001.<ref>Sharp, p. 13.</ref> It was on the ''Fortune''{{'}}s "100 Best Companies to Work for in America" list during 2000, and had offices that were stunning in their opulence. Enron was hailed by many, including labor and the workforce, as an overall great company, praised for its large long-term pensions, benefits for its workers, and extremely [[Vitality curve|effective management]] until the exposure of its corporate fraud. The first [[Financial analyst|analyst]] to question the company's success story was [[Daniel Scotto]], an energy market expert at [[BNP Paribas]], who issued a note in August 2001 entitled ''Enron: All stressed up and no place to go'' which encouraged investors to sell Enron stocks, although he only changed his recommendation on the stock from "buy" to "neutral".<ref>{{cite news|last=English|first=Simon|title=Whistle-blower sent off|newspaper=The Daily Telegraph|date=January 20, 2001}}</ref>

As was later discovered, many of Enron's recorded assets and profits were inflated, wholly fraudulent, or nonexistent. One example was in 1999 when Enron promised to repay [[Merrill Lynch]]'s investment with interest to show a profit on its books. Debts and losses were put into entities formed offshore that were not included in the company's [[financial statement]]s; other sophisticated and arcane financial transactions between Enron and related companies were used to eliminate unprofitable entities from the company's books.<ref>{{Cite web |title=#510: 09-17-03 THREE TOP FORMER MERRILL LYNCH EXECUTIVES CHARGED WITH CONSPIRACY, OBSTRUCTION OF JUSTICE, PERJURY IN ENRON INVESTIGATION |url=https://www.justice.gov/archive/opa/pr/2003/September/03_crm_510.htm |access-date=2022-05-20 |website=www.justice.gov}}</ref>

The company's most valuable asset and the largest source of honest income, the 1930s-era Northern Natural Gas company, was eventually purchased by a group of Omaha investors who relocated its headquarters to their city; it is now a unit of [[Warren Buffett]]'s [[Berkshire Hathaway Energy]]. NNG was established as collateral for a $2.5&nbsp;billion capital infusion by [[Dynegy|Dynegy Corporation]] when Dynegy was planning to buy Enron. When Dynegy examined Enron's financial records carefully, they repudiated the deal and dismissed their CEO, Chuck Watson. The new chairman and CEO, the late Daniel Dienstbier, had been president of NNG and an Enron executive at one time and was forced out by Ken Lay.{{citation needed|date=November 2015}}  Dienstbier was an acquaintance of Warren Buffett. NNG continues to be profitable now.{{Relevance inline|date=May 2016}}