Like all those in Jeff Skilling's small inner circle at Enron, Lou Pai, as CEO of Enron Energy Services, operated with his boss' unquestioning support. "Lou could do things that Jeff didn't like to do," says a longtime colleague. "Lou had no problem telling people that they had stupid ideas."

For years, the prickly Pai even treated Ken Lay's son, Mark, an early ECT employee (and an undistinguished performer) with undisguised disdain. Ken Lay complained to Skilling, agitating for Pai's head. Skilling refused to serve it up. "If he's gone, I'm gone." Skilling told the Enron CEO. So Lay backed off.

The big question is why. Why was Skilling so loyal to Pai, who certainly didn't reciprocate?

Why did Skilling allow Pai's greed and poisonous tactics to shape the culture of ECT?

Skilling's response was simple: He left Pai alone because he always got the job done. But among Skilling's top executives, there was another there were other theories. One was that Skilling liked having someone like Pai around, he prized having someone as blunt as Pai, and the whirl of conflict that created. Another was that Skilling felt he had to give Pai a wide berth because he was a star performer and because he had the loyalty of the traders. "I think he became afraid of Lou, because of the power he had as the man who controlled the trading operation," says a former ECT executive. "He didn't want to do anything because they were making money."

Pai wasn't the only one who had Skilling similarly mesmerized. Traders and dealers came to realize that it was easy to hold up Skilling for a raise or a bigger bonus or more options, all they had to do was threaten to quit, and Skilling would cave in.

Later, when Enron was flying high, the press portrayed Skilling as a master of the universe, in control of everything in the company. Insiders always knew better. As smart as he was, he could be taken advantage of.