Her job at Enron was to head a team that examined natural gas and power contracts, writing brief summaries for managers. That, at least, was how she described her job in a 2001 letter to a class-action law firm. Two years later, in her NYSE speech, her job description evolved into something more sophisticated: "I was recruited in March of 1998 to head a new risk management group …"
Lynn Brewer says she first uncovered fraud at Enron late in 1998. One of her tasks that year, she writes in her book, was to summarize a deal struck by the company in December 1997 through which Enron would receive an indirect loan for $229 million from NationsBank, which has since merged with Bank of America.
To pay back the loan, Enron and its subsidiaries promised to assign 80 billion cubic feet of natural gas from its Bammel storage field in Texas to a trust representing the bank, for net proceeds of $232 million.
Brewer says that Texas state records showed that Enron didn't have the requisite amount of natural gas at Bammel at the time the contract was signed. Because of that, Brewer says, the contract represented bank fraud.
In her book, Brewer says she alerted her boss to the problems with the Bammel deal at the time she was working on it. She also says she wrote a contemporaneous note to her boss describing her concerns. (Brewer provided a copy of this note, along with her six-page summary of the Bammel deal, to USA TODAY.)
But Brewer's boss, Mary Solmonson, after reviewing the summary of the Bammel deal produced by Brewer, says it is in an entirely different format from anything produced by her group. Solmonson had as many as 20 contract briefers such as Brewer working for her.
Solmonson says her department focused narrowly on gas and energy contracts and would not have been asked to brief a complicated financial transaction such as the Bammel deal.
As for the private memo from Brewer to her, the one alleging "bank fraud," Solmonson says she never saw that document or discussed the matter with Brewer.
In response to Solmonson, Brewer says, "The fact that she doesn't remember something 10 years ago out of the thousands of deals we did doesn't surprise me. I don't care. It does not matter to me."
In her book, Brewer says that she was dissatisfied with her job on the legal briefing team and with her colleagues, so she moved to Azurix, an Enron spinoff.
There, she says, she uncovered an example of what she calls corporate espionage carried out by the company's CEO, Rebecca Mark, and her husband, Michael Jusbasche.
According to Brewer, Mark wanted to come up with a catchy Internet domain name that Azurix could use as an online trading platform for water, much as Enron had done in the field of natural gas. Azurix employees and executives brainstormed and came up with several potential website names, including Waterswap.com, Watervault.com and Water2Water.com.
In one case, Brewer says, it was decided on a Friday afternoon that Azurix should register a particular domain name. Part of Brewer's job was to register the site. But on the following Monday morning, when she tried to do so, Brewer learned that Jusbasche had scooped up the domain name Friday evening. Brewer informed her boss, Mends.