Were things rocky from the beginning with Fastow?
WATKINS: No. He had me looking at all of the assets we had for sale and prioritizing them. So, I’m looking at book values, estimated market values. We had a Brazilian asset that we paid $1.3 billion for. It was throwing off 90 million dollars of income, but that was a minuscule rate of return. And we couldn’t sell it for what we paid for it. But you could sell it for maybe $900 million to a billion. So, yes, you would have a loss on the sale, but if you use that cash to pay off debt and lower interest costs, you actually help the bottom line out more than hanging on to the asset. So, you are looking at a spreadsheet with columns — assets, book value, estimated market value, on balance sheet, off balance sheet, hedged. The spreadsheet had been started by the accounting department. I’m looking at these things that said “hedge – Raptor.” In the loss columns, the accountants were logging hundreds of millions of dollars in losses still coming back to be borne by Enron. I thought — that do
