IP: Re: Anderson Consulting was the key technical and marketing enabler for Enron bandwidth trading

[David Farber <dave () farber net>]

> Date: Sat, 12 Jan 2002 18:21:30 -0800
> From: Stan Hanks <stan () tta com>
> To: farber () cis upenn edu
> Subject: Re: Anderson Consulting was the key technical and marketing 
> enabler for Enron bandwidth trading
>
> I was recently forwarded a note from Gordon Cook to you that made it
> to your IP list (to which I have subscribed intermittently for a long,
> long time). In this note, he  mentions that Lin Franks, a energy market
> commodization expert and former Enron employee, also worked for Anderson
> Consulting in a similar capacity. He futher tried to tie this together
> in some sort of conspiracy theoretic fashion related to Arthur Anderson's
> malfeasance in the role of auditor at Enron, rumored to be from fear of
> losing the highly lucrative Anderson Consulting engagements they also
> enjoyed there.
>
> As it happens, I actually know something about the events in question,
> since I initiated the move at Enron to create a commodity market for
> bandwidth.
>
> Ms. Franks is one of the most professional and ethical people with whom
> I have had the pleasure to work, and is far and away the most knowledgable
> in the areas of commodity markets and risk management. I pushed very,
> very hard for her to be given the role at Enron Communications to lead
> our development and market acceptance efforts in this area. Alas, Ms. Franks
> had not enough of the "Enron personality" to be acceptible to the Powers
> That Were in Houston, and she was placed in a lesser role while this
> responsibility was given to Tom Gros, a man with a rapidly rising star
> inside Enron for his work in creating markets in complex derivatives
> linking weather, tax emission credits, and energy futures. Having been
> left out, Ms. Franks understandably took her considerable talents
> elsewhere.
>
> It's also worth noting that I made my exit shortly thereafter when it
> became apparent that the new approach which Enron announced in January
> 2000 was greatly at odds with what I believed necessary to create
> a successful business in the communications world, and to create
> a robust commodity (or at least differentiated product) market for
> bandwidth.
>
> If we had been able to hold our original focus and goals, and develop
> the market organicly with industry cooperation, I do believe
> that things would have worked out quite differently. As it was, the
> attempt to creat a market by fiat, the need to then force-fit the bandwidth
> business  into a "traditional" Enron style business, and the financial
> gymnastics required to make it appear successful may have been where
> it all started to unravel...
>
> For the record, Ms. Franks is currently at Teknecon, in a role similar
> to her role at Anderson. Me? I'm trying to decide which anthill to kick
> over next... 8{)
>
> It will be very interesting to see where this all goes.
>
> Stan Hanks
> former CTO, VP Research and Technology, Enron Communications, Inc.

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