Water Over the Dam
Enron Strategist Rebecca Mark's Smartest Move May Have Been Getting Fired

By Jennifer Frey
Washington Post Staff Writer
Wednesday, April 17, 2002; Page C01

HOUSTON

Rebecca Mark is doing the mom thing these days. The former Enron executive moved out of her extremely nice home abutting the Houston Country Club into an even larger, more elaborate mansion in one of the most exclusive subdivisions in River Oaks, this city's priciest neighborhood. She goes to high school sporting events. She joined the school's board of directors. Sure, she still gets on planes, but often that's just to take her twin sons -- both excellent on the ski slopes -- to their vacation home in Taos.

When old pals from the business world call, "Mark the Shark" -- her nickname at Enron International, where she built a reputation as a tough, shrewd negotiator -- is still happy to talk power plants and water deals, to ponder proposals. There's always a possibility that she'll do a project, get back in the game. Part time, that is.

But last September, right before Enron started to unravel, Mark, once the highest-ranking woman in the company that's now viewed, worldwide, as an out-of-control boys' club, was at a hotel in downtown Houston at a conference titled "The Myth of Superwoman." Her panel topic: "Career Track or Mommy Track?" And Mark, who twice had been named by Fortune magazine one of the 50 most powerful businesswomen in America, was talking about how great it is that she now got to stay home with her kids.

Six months later, though, this 47-year-old mom has found old photographs of her staring out from national magazines. There is the one of her dressed in leather and astride a Harley-Davidson, another of Mark atop an elephant, another with her sitting in Santa's lap in a short black lace dress. Her once highly touted dealmaking skills are getting scrutinized, harshly, in the press. And rumors and innuendo that once rode Enron's rampant gossip train are showing up in print.

All of which might make things a little awkward at PTA meetings.

"I don't think anybody could have predicted what has happened," says Diane Bazelides, Mark's spokeswoman. Her client, she says, has been so distressed by the way she was portrayed in a few magazine articles that Mark has decided to decline all interview requests. In addition, several former executives of Enron and its spinoff Azurix declined to be quoted by name for this article, citing the intense scrutiny of the company since the bankruptcy and the overwhelming coverage by the media.

"Who could have predicted what would have resulted from this?" Bazelides continues. "The media attention, everything. Who could have known?"

Certainly not Mark, who was forced out of Enron in August 2000, after her chief rival, Jeffrey Skilling, was anointed as the future leader of the company, and the spinoff water company that Mark was given as a consolation prize, Azurix, floundered. For months she watched Enron from the sidelines. Watched Cliff Baxter resign, followed a few months later by Skilling, followed a few months later by the drastic drop of Enron's stock price that led to bankruptcy.

She was, according to a close friend, "disgusted" by what was happening at the company she helped to build. Disgusted, and a little sad.

"It's hard to be detached when it's such a significant part of your life," says Bazelides, who was in charge of corporate communications under Mark at Azurix. "She helped [Enron] develop into a global presence and was extremely saddened and disappointed when this happened. It was difficult for her to watch."

And it got even harder when people started blaming her.

On the widely published lists of high-ranking executives who made millions cashing out stock options, she's the first female name to show up; according to a court filing, she received $82.5 million from the sale of stock. (She sold all her shares shortly after her departure from Enron.) She is one of three women named in a shareholder lawsuit trying to attach the stock earnings of 29 current and former Enron executives, joining Wendy Gramm, the wife of Sen. Phil Gramm (R-Tex.) and a member of the Enron audit board, and Mary Joyce, the company's senior director of compensation and benefits.

Mark has not been asked, or forced, to appear before Congress, or the Securities and Exchange Commission, or the Justice Department. And she was not mentioned by name in the Powers report, the detailed investigation by the Enron board.

That doesn't mean, though, that she's been able to fade into the background.

Newsweek described her "vicious, 10-year rivalry" with Skilling as having "helped create the sex-drenched, out-of-control corporate culture that ultimately wrecked the company." Vanity Fair ran a quote from a money manager who described Mark's investments as "catastrophic."

"How a Fledgling Water Business Helped Sink Enron" was the headline over an article sent out by the Associated Press that portrayed the problems at Azurix as "Act I in the wreckage of Enron."

In a congressional hearing, and without mentioning names, Skilling criticized Enron's foreign projects, suggesting they were a factor in the company's financial troubles because they did not have a "compensatory rate of return." Some former Enron executives saw those remarks as a criticism of Mark.

The old pictures started to show up. Her house appeared on a local television station as an example of Enron excess.

"Why Rebecca continues to capture everyone's fascination surprises me," says her friend, a Houston businesswoman who has known Mark for nearly 20 years.

But Mark has always been an object of fascination -- in large part, because she stood out in a business that is predominantly male. Seemingly, no profile of Mark was complete without a mention of her hair color (blond), the size and brand of her skirts (6, generally Armani) and the height of her heels (three inches).

She made the cover of Forbes in 1998 in a story that began: "With honey-blonde hair, big brown eyes and dazzling white teeth that offset a toast tan, Rebecca Mark could be taken for a movie star." The next two sentences refer to her stiletto heels, her suit size and the fact that her skirt "slides well above her knees" when she sits down.

Mark took it all in stride. As she told Forbes: "I don't mind being remembered as 'Oh, that's that beautiful woman I talked to.' People will make an appointment just to see if you can walk and chew gum at the same time. I'll take all the advantages I can get."

The gossip was another story. According to one former Enron and Azurix executive, the in-house "gossip train" could be found in the associate analysts pool, a group of hot up-and-comers who rotated throughout the company's different departments, learning all aspects of the business. Their favorite topic? Mark.

"There were constant rumors about her," he says. "Skilling hated her. Any rumors or any gossip about her was always welcome in the associate analysts pool. And being a male-dominated place -- Azurix was not, but Enron is -- you can imagine the rumors about her."

Another former Azurix executive dismisses the gossip, but understands the fixation with Mark. She was, after all, a very visible top executive.

"I know she made some mistakes," the executive says, "but I admire any person, man or woman, who rises to the ranks and played in the game she played in. It was a big-time game. And I haven't seen anything that ties her to any of the financial shenanigans."

"She was taught a very strong, independent, pull-yourself-up-from-your-bootstraps mentality," Bazelides says.

She was also taught to balance a checkbook before she was 10. When she graduated from high school, she spent two years at William Jewell College in Liberty, Mo., before transferring to Baylor University in Texas, where she earned a BA in psychology and a master's in international management. She started her career at First City National Bank of Houston, moving to Continental Resources -- which eventually became a part of Enron -- in 1982. She got married, had twin boys, then separated from her husband when her sons were still toddlers.

Eager to get ahead, she went to Harvard Business School -- kids in tow -- and got her MBA while working for Enron on a local project. She returned to Houston and was named CEO of Enron Development Corp. in 1991.

From there, Mark -- with the encouragement of Enron Chairman Ken Lay -- decided to take Enron into international markets. Her career took off, and she became known as someone who could charm the chilliest of government officials. She flew around the world making deals -- one for a pipeline that ran from Bolivia to Brazil, another for a power plant in India. When she could, she took her sons, Rob and Jared, who are now 16, with her on the company jet.

Still, in the boys' childhood, there was a lot of nanny time. Mark's life was clearly defined: She had work, she had family time, she squeezed in a regular jog. There was no time for anything else.

"She'd be gone for fairly extended periods of time," Bazelides says. "She'd take the boys when she could, and when it didn't interfere with their schoolwork. Of course it's been hard for them, because they've had to share her with Enron."

Because her staff at Enron International traveled frequently, Mark tried to throw at least two parties a year -- one an annual Christmas event at her home. The photographs that resurfaced are from those parties: The elephant and the Harley were used in skits employees performed at these events; the Santa Claus shot is from the holiday party at Mark's home, which always included spouses and children.

"She genuinely did care about her employees," says Cole Frates, a former Azurix executive who left the company six months after Mark did. "She had a vision of what Enron should be, an asset-based business, and in order to have an asset-based business you have to rely on employees and keep people, and she knew that.

"Azurix was still guided by ambition and ego and all of that, but it was less so," he continued. "You got the sense that Rebecca was trying to build something that everybody could be proud of. Yes, she wanted everyone to get rich along the way, but that wasn't the only point."

While Mark was trying to build up Enron's international assets from her office at 333 Clay St., Skilling was across the street at the 1400 Smith St. tower revolutionizing the company -- and turning it into a business that was designed to be "asset-lite." Soon, though, it became evident that Skilling had won Lay's favor, and Mark was given the title of vice chairman. In Enron parlance, that was code for the ejection seat.

She was given Azurix to run. But Mark was not defeated. She decided to find a way to purchase and sell water in deregulated markets. She thought big. Too big, it turned out.

This is a high-ranking former Azurix executive talking, who considers Mark a friend and still keeps in touch with her. He is grabbing a quick lunch in a Houston cafe, trying to explain what went wrong at Azurix.

"She's able to take over a meeting," he continues. "She's very quick on her feet. She has the ability to analyze a deal quickly. She knows the essence of a deal very well.

"But that doesn't always mean they're going to be good ones."

Pressure was coming from across the street, no one seems to dispute that. Skilling was recording ungodly returns on his investments, driving Enron's stock price into the stratosphere. In the elevators, televisions were tuned to the stock ticker, a constant reminder for those at Azurix -- to Mark -- of how well Enron was doing, and how Azurix was lagging behind.

So Mark tried to work some of her dealmaking magic. She bid incredible prices against established water companies, making deals in Buenos Aires and Britain, meeting with Florida officials on privatizing the state's water supply. She put together an IPO just nine months after the company was formed -- the stock debuted at $19. She publicly promised 20 percent profits. She tried, colleagues say, to be Skilling. It didn't work.

"The problem was, we never got into the water business," the former executive says. "I think she was under a lot of pressure to make deals, to show she could perform. She was also under a lot of pressure to get that IPO out.

"It was too much too fast," he continues. "If Rebecca had a fault, rather than taking baby steps with a company to get it built up, she took giant steps. It was a combination of where she'd come from -- making huge deals, like the $439 million one in India -- and the pressure of wanting to show people she could perform like across the street. She had something to prove."

Even that India deal, though, was no longer looking like Mark's crowning achievement, mired in political problems after the Indian government balked at paying the overly generous terms Mark negotiated for Enron. (Mark was no longer at the company when the situation became so dire that the U.S. government -- including Vice President Cheney -- intervened on Enron's behalf.)

Azurix was not going to be her savior. The 20 percent profits never materialized. The deal made in Buenos Aires turned out to be wildly overpriced. The stock price plummeted. In August 2000, Mark resigned.

"Rebecca is a strong woman," says the former executive. "If she was that angry or demoralized, I didn't see it. She wasn't going to let that take her down. She knew what she'd accomplished."

Still, it was hard.

"It was a public rise," says Mark's close female friend, "so the fall was public as well. That's always difficult."

Asked how long it took for Mark to move on, her friend answers: "It took time. It took time."

The couple live with the twins in a neighborhood of secluded estates and towering oak trees, where the azaleas bloom in full glory at this time of year. She still keeps an apartment on Manhattan's Upper East Side.

After a lifetime of missing hockey and basketball games, Mark has become a regular cheerleader. At the Awty International School, where the twins are enrolled, she serves on the board and on the buildings and grounds committee.

"Rebecca worked extremely hard and sacrificed time with her family for many years," Bazelides says. "The thing I'm seeing is that she is now able to spend quality time with her children and her husband."

Mark still belongs to advisory boards at Harvard Business School and the Yale School of Management, and she gets occasional offers to speak.

There was the one she accepted last September, in Houston, and she was supposed to travel to Harvard in late January, for a conference on "Dynamic Women in Business." She canceled, though, concerned that her presence would shift the focus from her panel's slated topic -- "Women across the world: Challenges and opportunities in international assignments" -- to the hottest topic of the day.

Enron, of course.