Diva of the Deal

How Enron's high temptress turned massive projects into a $2 billion wet dream for the company -- and an estimated $100 million profit for herself

The World Bank report was bad news for Enron, but Mark and her chief lieutenant at Enron, Joe Sutton, a macho, hard-driving former army officer who wasn't used to being told no, charged onward. On August 26, 1993, Mark faxed a letter to Sharad Pawar, the chief minister in the state of Maharashtra, that showed her blind determination to get the Dabhol deal done. She began by saying that Enron officials had been meeting with officials from Maharashtra and the country's electric power agency "to answer their questions about the project. The remaining concern," she said, was a state official named Mr. Beg, who "continues to hold up project approval based upon the question of demand for power in Maharashtra. No one from the Ministry of Power in Delhi has given direction to Mr. Beg to move forward on this issue" (emphasis added).

Mark didn't know it at the time, but her letter would prove to be the key document in the story of Dabhol. In it, she is telling Pawar there was no reason for people like Mr. Beg to delay the project based on silly matters like "demand for power in Maharashtra." The message was clear: Forget about questions about who will use the power and how much they might pay. Sign the damn papers.

By early December 1993, Mark had all the signatures she needed. The Indian government signed a contract requiring it to pay Enron about $1.3 billion per year, or about $26 billion over the life of the 20-year contract. It was, Mehta said, one of the largest civilian or military contracts ever signed, anywhere on the globe. Over the life of the contract, India would pay Enron and its partners nearly nine times what Dabhol had cost. Furthermore, India was required to pay for any cost increases caused by price hikes associated with the plant's fuel, electricity transmission lines or plant maintenance.

Top of the Mark: Rebecca rose through the ranks at warp speed.
Fred Harper
Top of the Mark: Rebecca rose through the ranks at warp speed.
Pipe Dreams author Bryce is a veteran business journalist.
Pipe Dreams author Bryce is a veteran business journalist.

The final insult of the contract was a stipulation that required India to pay Enron in American dollars, even though the Indian rupee was undergoing regular depreciation. Mark had negotiated a can't-lose contract. The deal really was too good to be true. And it wouldn't last.

But Mark was too busy to worry about the details. Her ambition was obvious to one executive who worked at Enron. Mark "wanted to eclipse [John] Wing. Ultimately, she wanted to eclipse Kinder, Skilling and even Lay," says the exec.

Enron certainly paid her well. Company proxies show that between 1996 and 1998, her total compensation was $25.7 million -- that's more than any other Enron employee during that time, including Ken Lay ($16.7 million) and Jeff Skilling ($25.4 million). By 1998, she was named vice chairman of the Enron board and held voting power on more stock than anyone else on the board except for Robert Belfer, Lay and Skilling. Despite her wealth of assets, Enron began treating Mark like a favored third-world country. In 1998, Enron forgave all of the principal and interest on a $955,343 loan the company had granted her in 1997. In early 1999, Enron did even more, pardoning an additional $700,000 loan the company made to her in 1998.

She also spent plenty of the company's money. While traveling, she insisted on limousines and the finest hotels. And she was apparently allergic to commercial airlines. According to Enron's proxies, her personal use of the company's jets cost over $141,000 for 1997 and 1998 alone. One estimate put her air travel at 300,000 miles per year, meaning the expense of keeping Mark aloft in Enron's jets for business travel likely cost millions of dollars per year. Personnel at Enron's international unit dreaded Mark's visits, not because she would see anything they didn't want her to see but because, as one executive said, "whenever her jet touched down, we knew it was going to cost our project $60,000." In addition to the salary, loans and perks, Mark earned big cash bonuses on many of Enron's international projects. Her 1998 employment agreement with the company shows she was paid more than $3 million for two relatively small overseas projects.

With all her newfound wealth, Mark couldn't live in just any Houston neighborhood. She was a big shot and therefore belonged in River Oaks. So in September 1998, she bought a beautiful $2 million property complete with 2.3 acres of land and a big red brick home, in an area of River Oaks known as Tall Timbers. It wasn't quite up to her style, though, so Mark had the house completely remodeled in 1999. The remodeling left her with a 10,286-square-foot home with five bedrooms, six bathrooms, two half-bathrooms and a swimming pool. Not bad for a girl who started on a rural farm.

After getting Dabhol off the ground, Mark decided to get into the water business. And by mid-1998, she became convinced that Wessex Water was the perfect choice upon which to build her new water company, Azurix.

Wessex, which provides water or wastewater service to about 2.5 million people in southwestern England, was among the most profitable water utilities in the United Kingdom. In July 1998, after several weeks of negotiations headed by Mark, Enron announced it would buy Wessex in a deal worth $2.88 billion. The water business is "a logical extension of Enron's expertise developed in the worldwide energy business," crowed Ken Lay in a press release sent out the day the deal was announced. Wessex's operations combined with Enron's "expertise in energy infrastructure project development, asset management, regulatory, finance and risk management services, will enable the new company to become a strong competitor in the global water industry," he predicted.

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