Hundreds of millions of dollars were spent on this project, but the company ended up realizing almost no return.
When the recession hit in 2000, Enron had significant exposure to the most volatile parts of the market.
To cope with the mounting liabilities, Andrew Fastow, a rising star who was promoted to chief financial officer in 1998, developed a deliberate plan to show that the company was in sound financial shape despite the fact that many of its subsidiaries were losing money.
CEO Jeffrey Skilling hid the financial losses of the trading business and other operations of the company using mark-to-market accounting.
This technique measures the value of a security based on its current market value instead of its book value.
As a result, many trusting investors and creditors found themselves on the losing end of a vanishing market cap.
By the fall of 2000, Enron was starting to crumble under its own weight.