"We're going to move from mark-to-market accounting to something I call HFV, or hypothetical future value accounting,'' Skilling says."If we can do that, we can add a kazillion dollars to the bottom line.''

Enron commissioned hundreds of videotapes, some of which were used in the documentary. Others have been used in the Enron Broadband Services trial, which is in progress. Still others may provide incriminating evidence at the January 2006 accounting fraud trial of Skilling, Ken Lay and Rick Causey.

"There's a lot that hasn't surfaced yet,'' said Alex Gibney, the documentary's director."Some of the stuff that is still out there is apparently not to be believed.''

1,800 hours of Enron videotapes, gleaned from more than a decade of company meetings, are available for prosecutors and defense attorneys to dramatize dry testimony about Enron's complex off-the-books partnerships and mark-to-market accounting techniques. Investors and company pension funds suing Enron's banks and former executives for fraud may also use the tapes. The Enron executives' tendency to parody their business practices may put them in deep trouble.

"If I had that available to me, I would look for any way to use it,'' said former federal prosecutor Steven Peikin."It's a rare situation in a white-collar case.'' Peikin, now with the New York law firm of Sullivan & Cromwell, successfully prosecuted former Credit Suisse First Boston banker Frank Quattrone on obstruction-of-justice charges.

Lisa Monaco, a prosecutor in the Enron Broadband case, declined to comment on the importance of the videotapes to the government's case. Andrew Weissmann, director of the U.S. Justice Department's Enron Task Force, which is prosecuting Lay and Skilling, also declined to comment on the Enron videotapes.

Tony Canales, lawyer for ex-Enron Broadband Services' senior vice president Scott Yeager, ordered a copy of "every piece of Enron Broadband video'' to defend his client, he said. To do that, Canales contacted Beth Stier, owner and sole employee of Houston-based Innovision Communications Inc., a video- production business that taped hundreds of Enron employee meetings, analyst presentations, and training and recruiting videos. Stier began videotaping most of Enron's corporate video productions in 1989 and warehoused all of it.

Gibney wouldn't confirm how he acquired some of the clips used in his movie, which include former CFO Andrew Fastow pitching his now-notorious off-the- books partnerships to a group of bankers.

Another clip that might become key evidence at Skilling and Lay's trial is one of Lay addressing Enron employees in late 2001, as the company was hurtling toward filing the second largest bankruptcy in U.S. history, wherein Lay says that management acted ethically, and he promises that Enron will survive the crisis. He then reads from a question card submitted by an employee in the audience.

"I would like to know if you are on crack?'' Lay reads, smiling faintly. "If so, that would explain a lot. If not, you may want to start, because it's going to be a long time before we trust you again.''

In a short and extremely emotional meeting, Jeff Skilling announced his resignation. He was in tears. He told the board how much he loved Enron but also how guilty he felt that he hadn't "been there" for his children. He insisted that the press release announcing his resignation not say anything about his family, because he did not want his children to feel responsible.

He refused to allow the board to say he was resigning for health reasons, even though everyone present was worried about Skilling's mental health. Ken Lay later said that Enron's directors tried to convince Skilling to stay, but he was adamant.

He had already agreed to forfeit severance pay and to repay a $2 million loan. At 8:40, Skilling left the room. It had taken half an hour.

The next day, the board concluded its business in the morning. Skilling left the meeting at 11:35. "I've resigned," he told his assistant, Sherri Sera. The news flew through the halls of Enron.

After the stock market closed that day, the press release announcing Skilling's resignation hit the wires. the explanation given for Skilling's resignation was both curt and bewildering. "I am resigning for personal reasons," Skilling said in the statement. "I want to thank Ken Lay for his understanding of this purely personal decision..." Mark Palmer argued to Lay that the company needed to say something more to calm the markets: "Ken, 'personal reasons' ain't going to fly. Is Jeff sick?"

"It depends on how you define sick," replied Lay.

Arthur Andersen issued this statement on June 15, 2002, six months after Enron filed for bankruptcy. The firm had just been found guilty of destroying evidence -- thousands of pages of Enron-related material that had been shredded at the prodding of David Duncan and Nancy Temple.

As a firm, Andersen was finished even before the trial, decimated by client defections once it became clear that this time the Justice Department was not going to look the other way. From the beginning through the bitter end, Andersen took the position that virtually everyone involved in the Enron scandal to one degree or another would embrace. Andersen claimed it was a victim -- A victim of an unjust, politically motivated prosecution and a victim of Enron itself.

Andersen's reaction was typical of Enron employees and Wall Street also. In the aftermath of one of the largest corporate scandals in American history, almost nobody was willing to admit they did anything wrong.

Andersen's conviction was later overturned because the judge's instructions were technically flawed -- although they see the reversal as vindicating them, it did not. It was a technicality. Either way, Arthur Andersen has  been destroyed, Enron has destroyed themselves, and the rest of us are left to "ask why."

If Sen. Maria Cantwell's provision survives when the Senate bill is reconciled with a similar bill in the House of Representatives, the PUD will be in better shape in its long-standing battle with what's left of Enron.

Cantwell's measure would disallow Enron's bankruptcy lawyers to pursue the PUD for $122 million for canceling a 2001 electricity contract. The PUD first must win in a Federal Energy Regulatory Commission court before it can get out of paying Enron, however. That legal fight is slated for September.

Enron claims the PUD owes it $117 million -- now more than $122 million with interest -- because it cancelled a contract to buy electricity at inflated prices during the 2000-01 West Coast energy crisis.

The PUD claims that Enron illegally contributed to the record electricity price run-ups during the crisis, and canceled its contract right before Enron filed for bankruptcy in 2002. If a bankruptcy loophole isn't closed, there's a chance the PUD could be forced to pay even if federal regulators rule in the PUD's favor.

"There is no way under the sun that my constituents owe Enron another penny," Cantwell said. "Not one single penny more."

Still, Cantwell said the battle is not won. The House has "the exact opposite" provision in its bill, she said, and even if that is snuffed out, the PUD is still relying on federal energy regulators to rule in its favor.

The House provision would make it more difficult for the PUD to avoid paying Enron because the provision raises the standard for a utility to prove that an energy trader offered a contract fraudulently, said Al Aldrich, the PUD's government affairs director.

When the FERC proceeding starts in September, the PUD and other utilities in Nevada and California will argue that they shouldn't have to pay Enron for canceling their contracts early.

"We're pretty comfortable that we have enough evidence to determine (that the Enron contract) is fraudulent," Aldrich said. That evidence includes hundreds of hours of taped conversations in which Enron traders admitted they were intentionally manipulating electricity prices during the energy crisis - tapes that the PUD gained national fame for publicizing last year.

Jeff Skilling wrote his first resignation note on April 30, 2001, just three months into his tenure as CEO. He never sent it. But from his first day, he secretly had one thing uppermost in his mind: quitting.

In all the time he had been at Enron, Skilling had always seemed supremely confident. Now that he was CEO, the facade was crumbling.

An old Enron friend came to visit him. She knew Skilling well, and could tell he was falling apart.

"You've got a problem," she said. "The people you're closest to and loyal to, you've made too much money for them. The next layer down, the Whalleys, the Fallons, they will slit your throat if it means they'll get to the trough faster."

Once upon a time, Skilling would have thrown her out of his office for a remark like that. Not now. He stared out the window for a few moments and replied, "Mandy, you're most likely right."

Ever the hardcore numbers guy, Kinder was skeptical of everything, but especially of Mark's business.

There was no way he could evaluate its performance, because so much of the profits were in the future, although already on the books through mark-to-market accounting.

But globalization had caught on, the board belonged to Ken Lay, and Mark was his star. To other Enron executives, it appeared as if Kinder was afraid to take her on, because he realized this was one battle that he would lose.

Ultimately, while it cannot be said with any solidity that Mark's losses at Dabhol led to the massive fraud, the galloping debt interacted with the Enron culture of making the books look good at all costs to produce conditions in the Enron environment that allowed the fraud to grow.

Prosecutor Ben Campbell on Tuesday presented e-mails and internal documents generated before and after the January 2000 analyst conference that described the operating system as something that needed to be defined and developed. Hirko repeatedly said such communications meant a future version of what Enron already had, even though none mentioned a current version in operation.

A February 2000 memo to all broadband employees that Hirko said he helped draft and approved noted the analyst presentation included an announcement of a partnership with Sun Microsystems "to jointly develop a broadband operating system."

Asked whether that portion of the memo was true, Hirko replied, "No, because you wouldn't develop an existing phase, you would develop a new phase."

"But it doesn't say 'next phase'?" Campbell asked.

"No, it doesn't," Hirko said.

Hirko, of Portland, Ore., was finance chief of Portland General Electric, the Pacific Northwest utility Enron acquired in 1997. He took charge of the utility's fledgling telecommunications unit, which he thought had the potential to become a competitive broadband startup.

Hirko, his former co-CEO Kenneth Rice and former Enron CEO Jeffrey Skilling formally rolled out the unit to Wall Street analysts at a January 2000 conference. Analysts who influenced Enron stock were dazzled, and the company's share price jumped to $54 from $72 the day after the conference.

Their presentations focused on a new broadband trading market, a potential unit value of $29 billion based on anticipated revenues and an operating system that had such unique features as an ability to reserve space on the broadband network to avoid cyberspace clutter.

The operation now employs 40, including five executives who relocated from New York, Citigroup spokesman Joe Christinat said. The bank's Houston desk trades natural gas, electricity and crude oil, and plans to add coal and emissions.

Citigroup and rivals banks such as Merrill Lynch are returning to a business they once shunned as too volatile. Led by surging energy prices, Morgan Stanley and Goldman Sachs Group both generated more than US$1 billion of revenue from energy trading last year. Oil prices have topped a record US$60 a barrel on the New York Mercantile Exchange.

"If they're going at the business from the standpoint of oil and refined-product trading, they could very well be late to the party,'' said Ethan Ravage, a San Francisco energy-trading consultant for the financial services industry. "If they're focusing on power trading, there's more room there.''

Citigroup's Houston trading desk reports to Stuart Staley, a New York-based head of commodity derivatives. The company hired Kaminski, 57, as a managing director in March. Kaminski had worked at Enron for a decade and was credited with developing mathematical models to value energy transactions and assess risks. Kaminski left Enron in 2002.

He had warned Enron executives of the improprieties of the company's off-the-books partnerships as early as 1999, according to 2002 reports by the Wall Street Journal and Washington Post. Transactions related to those partnerships led to Enron's collapse and bankruptcy in December 2001.

Merrill returned to the US$60 billion-a-day energy-trading market in November after an absence of more than three years by buying Entergy-Koch's energy-trading unit for US$800 million. That group also is based in Houston.

JPMorgan Chase hired four executives in March for its energy-trading business, including Morgan Stanley's George "Beau'' Taylor. The unit has more than doubled in size since the start of 2004.

Lehman Brothers Holdings has run advertisements this month seeking job candidates with "significant industry experience'' in energy trading.

Goldman and Morgan Stanley both have more than 200 employees in their commodities trading units, which can also handle physical trading, or take actual delivery of tankers of crude.

"It's a tough time for anyone getting into this market,'' said Justin Pearson, who in January 2003 co-founded a London headhunting firm for the energy and commodities fields, three months after TXU Corp and Dynegy quit trading in Europe. "They've got a big chore ahead of them. They have to do something to differentiate themselves.''

Enron's stock price began dropping. The bull market had ended. The dotcoms went bust. Analysts, too, were starting to notice contradictions in Enron's numbers. Enron had posted fantastic earnings numbers for the first quarter of 2001.

Skilling was leading a conference call following the earnings announcement and was in an upbeat mood. "Just an outstanding quarter, another outstanding quarter," he enthused. We are "very optimistic about each of our businesses and confident that our record of growth is sustainable for many years to come."

In the middle of the question-and-answer period, a hedge fund manager named Richard Grubman was given the floor. Grubman was a short-seller. He didn't care about Enron's earnings. He wanted to see a balance sheet, which would have far more detailed information than the income statement Enron put out the day before.

Skilling: "We do not have the balance sheet completed. We will have that done shortly when we file the Q. But until we put all of that together, we just cannot give you that."

Grubman: "I'm trying to understand why that would appear to be an unreasonable request, in light of your comments about daily control of all your credits?"

Skilling: "I'm not saying we can't tell you what the balances are. We clearly have all those positions on a daily basis, but at this point, we will wait to disclose those until all... the right accounting is put together."

Grubman: "You're the only financial institution that cannot produce a balance sheet or cash flow statement with their earnings."

Skilling: "Well, you're -- you -- well, uh, thank you very much. We appreciated it."

Grubman: "Appreciate it?"

Skilling: "a**hole."

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?

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.

Both inside and outside the company, there was speculation that Mark would be Enron's next CEO. Enron International accounted for more than 15 percent of the company's earnings in 1996, and Enron was soon predicting that its earnings from International would grow at 20 percent per year for the foreseeable future.

The parade was magnificent. The actual results, however, came up short.

"Dear Mr. Lay,

Has Enron become a risky place to work? For those of us who didn't get rich over the last few years, can we afford to stay? Skilling's abrupt departure will raise suspicions of accounting improprieties and valuation issues.

She went on to ask "how do we fix the Raptor and Condor deals?" and went on to say "I am incredibly nervous that we will implode in a wave of accounting scandals. My eight years of Enron work history will be worth nothing on my resume, the businesses world will consider the past success as nothing but an elaborate accounting hoax.

She had her assistant drop the unsigned letter in a special box for questions to Lay at the upcoming employee meeting, to be held at the Hyatt. She didn't have it in her to remain anonymous. when Lay didn't address her issues at the meeting, she went to Cindy Olson, head of human resources, and identified herself as the letter writer. She agreed to speak to Ken Lay face to face.

Before the August 22, 2001 meeting, she expanded her letter to 7 pages, offering fresh details, naming executives who could back up her charges, and even offering Lay advice on how to manage the problem.

Watkins arrived at Lay's office on the fiftieth floor for her 1 P.M. meeting. As Watkins made her case to Lay, he listened attentively. None of this should have come as a surprise; Lay approved many of the deals. Still, he seemed surprised and concerned by what he heard.

Lay made arrangements to have Watkins allegations investigated by an outside law firm -- Vinson and Elkins. V&E had done legal work on some of the same transactions she was complaining about.

After a very narrow investigation, V&E basically whitewashed the whole thing.

Ken Lay had subordinates investigate the possibility of firing Watkins, but concluded getting rid of her wouldn't be smart. It would invite an ugly lawsuit, and draw attention to Enron's books.

Andy Fastow was not nearly as circumspect. He attempted to have her fired and her laptop confiscated.

Ken Lay, Jeff Skilling and Northern Trust Co. asked a federal appeals court to hear their complaints about being kept out of this settlement. The deal had been approved by U.S. District Judge Melinda Harmon, which uses two Enron insurance policies to pay the workers. Without an appeal, workers could have been paid in a matter of months.

The $85 million-plus settlement is not a tremendous amount of money when divided amongst all the ex-employees. About $17 million is set aside for lawyers. The $69 million left amounts to about $3,500 per person spread out over 20,000 workers. The actual division could differ.

"We'd anticipated the appeals would be filed but certainly hoped they would not, as it further delays the distribution to the employees," said Robin Harrison, one of the lawyers for the workers.

Lay and Skilling tried to stop this settlement before, because they were covered under the insurance but were excluded from the settlement. The lawsuits stem from complaints that Enron executives and others breached their duty owed to employees under pension laws.

Skilling claimed it was Ken Lay's idea -- Lay realized that Skilling was restless. As it became clear that Lay had every intention of turning over the job to him, Skilling felt he had no choice but to accept the position.

"Drive and ego, control and power," says a former Enron executive who was close to Skilling. "You want the next job. Then, on the other hand, you want a life." In his friend's view, Skilling was genuinely conflicted, but he wasn't able to walk away from the prestige of being an Enron executive.

Skilling had a variety of reasons why he didn't want the job. He felt the board was always going to be in Lay's back pocket. After taking a trip to Africa with his brother Mark and his son Jeffrey, he realized he wanted to spend more time with his children. That trip was the first vacation he had ever had where he was not eager to return to work at Enron. And, he confided to his inner circle, he wasn't having fun anymore.

"I hate what I'm doing," he told people.

Ken Lay responded by issuing a memo that Enron would no longer pick up the tab at topless bars.

"When that memorandum came out, the trading floor went completely quiet. There was a pall for two days," recalls one former ECT executive.

Nonetheless, Lou Pai kept expensing his incursions for months, until he finally received a personal scolding from Skilling.

"Well, it's the old gas business," Pai protested. "It's not part of the new gas business," Skilling responded. This was one of the rare instances where Jeff Skilling actually was willing to reel Lou Pai in.

For Rebecca Mark, it was a different story. For one thing, it made her rich. One executive remembers a conference call between Ken Lay and Rebecca Mark, to discuss Mark's bonus for Dabhol. The cash-flow estimates she had prepared, assumed, naturally, that everything would go smoothly, but Lay offered no objections to her spreadsheet.

The project team split $20 million, of which Mark received a huge chunk. Soon she was zipping around Houston in a ruby-red Jaguar XK8 convertible. She had a Land Rover for the kids, a lake house, a ten-acre retreat in Taos, and an apartment on Manhattan's Upper East Side.

A typical Enron move, the appearance of great things happening was rewarded, the actual points on the scoreboard were ignored.

"Enron's going down," she announced. "Andy and Causey are Going to jail."

Watkins was no babe in the woods. She had helped manage the JEDI partnership for Fastow, and had witnessed shenanigans at broadband, and was well-versed in Fastow's conflicts at LJM.

But this was far more alarming. Even as she continued to gather information, she raced to frightening conclusions. This was the worst accounting fraud she'd ever seen!

Watkins was determined not to go down with the ship. she began interviewing with other companies. She was determined, however, to tell someone what she'd found. She had to desire to go outside Enron, to the media or government, or even the board. As she saw it, nothing good could come of that.

"When a company cooks the books, their only chance of survival is to come clean themselves," she later explained.

Her original plan was to meet with Skilling on her last day working there, and tell him that Enron had gone way over the line. Skilling quit before she had the chance. This solidified her belief that Enron was in peril.