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American Morning

Interview of Andy Serwer, "Fortune"

Aired February 26, 2002 - 09:33   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Hearings before the Senate Commerce Committee getting underway at this hour. This could be truly great stuff.

We got your former Enron CEO, Jeffrey Skilling. That, of course, is the senator from Arizona. There is Jeffrey Skilling, and seated with him at these hearings will be Sherron Watkins, who is the executive who raised red flags about Enron's accounting practices. She claims Skilling had to know. He says, "I don't know anything about it." Also in the room today, the present COO of Enron, Jeffrey McMahon. So, it could get very interesting.

Last night, Enron's new CEO, Stephen Cooper, held a little town meeting, He's taking the company through the bankruptcy process, and he held a town meeting down there in Houston, 300 former employees of Enron came and wanted to know, where is our money? Where is the severance, where are our retirement plans, where is the money? And, of course, because the company is in bankruptcy, there is nothing they can do until such time as they reorganize. Apparently, the new CEO was good humored in all of this, and said that they hope to have a reorganization program put in place by the end of the year. But, needless to say, there are some angry and disappointed, and wounded, financially speaking, wounded people, ex-employees of Enron.

Andy Serwer, "Fortune" magazine's editor at large is here.

The good news is, investigators have turned -- they flipped one of the guys from inside that company who apparently knows a lot about what went on.

ANDY SERWER: Yeah, this is big news here, because trying to get through -- plow through those complicated partnerships, the documents, the goings-on, the moving around of money has mind-boggling for government investigators. I mean -- and how could it not be? I mean, these guys are masters of obfuscation.

So they got this guy, Ben Glisan, who is the former treasurer, his name, apparently, is on all the documents, and it looks like, now, we've got this guy, who is, as they say in the business, flipped. Flipped.

CAFFERTY: It goes like this. "Would you be interested in doing the rest of your life in a federal prison, or would you be interested in, perhaps, giving us a hand here with this investigation?" SERWER: It's called a trade off.

CAFFERTY: Yeah.

SERWER: And, you know, there's actually a little wrinkle there. There's a wrinkle there, though, because what they had to do, is they had to call off Congress, because Congress wanted to get this guy to testify. But you can't do that. If you are going to offer him immunity, you don't want him to do the Fifth. You can't take the Fifth, so they said, look, Congress, back off this guy. That's why his name hasn't popped up, why you haven't seen him in Congress.

CAFFERTY: That makes sense.

SERWER: It is not absolutely certain that this guy is going to get immunity yet, but all things are pointing to that right now, and, you know, he could be the key to unlocking everything. So, you know, did Fastow know, what did Skilling do at this particular meeting, how was Ken Lay involved? Here's a guy who can say, this is how it worked.

CAFFERTY: Well, and all you need is one. If he's in a position like the treasurer of the company. I mean, if anybody knows about the financial dealings, it is going to be the treasurer.

SERWER: Right. Because -- as we are going to see today, we are going to get an awful lot of "he said, she said." It is actually going to be "he said, he said, she said," right? Because there's three of them.

CAFFERTY: Scorpions in a jar.

SERWER: Yes, we love that metaphor.

CAFFERTY: It is a great, great visual image.

SERWER: They are going to be killing each other off, right?

CAFFERTY: The town meeting last night, what was this, just a little bit of public relations, right? There is nothing, realistically, this new guy can do.

SERWER: Yeah, I think that's right. I mean, there are a couple -- the congressmen were there, local congressmen, Representative Sheila Lee and Kevin Brady from Texas. There were labor officials there, people from the Social Security Administration, and apparently Steve Cooper was dressed casually, smiling, there is a little clapping, but there wasn't a whole lot of that. I heard it was very contentious, and people, as you suggested, stood up in the microphone and said, "where's my money?"

CAFFERTY: Where's my money.

SERWER: "Where is my severance, when am I going to get it?" And he basically said -- Cooper basically said, you are not going to get it for a year, basically, until the reorganization is wrapped up, and you wonder if Cooper really knew what he was getting into. He is a turn-around specialist. This is not really a turn around. This is the biggest debacle in American corporate history.

CAFFERTY: On the other hand, somebody has to step forward and publicly address the grievances of the people that got crushed in this thing, i.e. the employees of the company, and that is probably not a bad PR move for him, even if he had to take a little verbal beating last night.

SERWER: Yeah, he is probably going to take more, too.

CAFFERTY: Talk to you tomorrow.

SERWER: Okay. Thanks.

CAFFERTY: Andy Serwer, editor at large, "Fortune" magazine.

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