“Bad Bets” is a new podcast series from The Wall Street Journal that will be unraveling the biggest business drama that has impacted the entire globe. Each season will look at huge stories of fraud, collapse, and crisis and the ripple effects that can still be felt decades later.
In this inaugural season, Wall Street Journal reporters John Emshwiller and Rebecca Smith will be explaining the story they broke that caused the bankruptcy, collapse, and eventual trials of Enron. Enron Corporation was a ’90s energy giant until a whistleblower exposed Enron’s hidden debt of over a billion dollars from failed deals and projects. In fact, that whistleblower speaks on record for the first time in “Bad Bets.” Enron’s scandal was corporate fraud of the most epic proportions, and you’ll hear about it from the people who broke it.
In the 1980s, Enron was a standard energy company, providing energy across the United States. But executives were not satisfied; they wanted more. So they promised to revolutionize the energy industry, and by the mid-’90s, it seems they had done just that. Year in and year out, they were named America’s Most Innovative Company and their reputation rose to nearly unsustainable levels. And that is where Emshwiller starts our story, at the Enron Headquarters in 1998.
The executives loved to showboat their accomplishments, even if it was really just a smokescreen. When stock analysts would visit, if their promises had yet to be fulfilled, they would just fake it. And their stock soared from $20 a share up to $90. But these stageplays in sales rooms they set up weren’t the issue, but instead the facades masking problems within the company.
And in 2001, they filed for bankruptcy, just a year after pulling in $100 billion in revenue. This scandal rocked people’s faith in big businesses and the unchecked power corporate America held over the livelihoods of everyone. The Enron scandal brought in a new wave of legislation and changed the business landscape of America.
The “Bad Bets” team is more than qualified to tell the story of Wall Street’s darling and its crash to less than one dollar a share. Emshwiller covered white-collar crime for the Wall Street Journal, and 20 years ago, he was paired with Rebecca Smith, a reporter of utilities and power markets. With hundreds of interviews, years of reporting and reams of court documents, “Bad Bets” is about how all of this happened. And Emshwiller and Smith believe this is still very relevant today.