Rick Buy

Rick Buy served as Executive Vice President and Chief Risk Officer of Enron Corporation, leading the Risk Assessment and Control (RAC) division with responsibility for identifying, quantifying, and controlling risks across the company’s global operations. From his office on the 50th floor executive suite alongside Ken Lay, Jeff Skilling, Andy Fastow, and Rick Causey, Buy managed a team that reviewed and approved transactions across all of Enron’s business units through a weekly “Underwriters” meeting process. In August 2001, he was appointed to the newly formed Enron Management Committee.

Buy’s email archive in the Enron corpus contains 15,550 messages spanning December 14, 1999 to November 30, 2002, documenting his daily oversight of risk operations, his working relationships with executives across the organization, and his awareness of concerns about the company’s off-balance sheet structures that would contribute to its collapse. Despite his senior role and oversight responsibility for controversial special purpose entity transactions, Buy was fired in February 2002 but was never criminally charged in connection with the Enron scandal.

Career at Enron

Chief Risk Officer

As Chief Risk Officer, Buy held formal responsibility for the enterprise-wide risk management function that reported to the Office of the Chairman. According to Enron’s official description of the role, Buy was charged with “identifying, quantifying and controlling risks” across the company’s operations, which by 2001 spanned energy trading, broadband services, retail energy, and international assets on five continents.

Buy’s operational rhythm, visible through his calendar and email traffic, reveals the scope of this responsibility. His recurring meetings included:

• Daily IT Updates with Debbie Brackett (tracking technology systems underlying trading operations)
• Weekly “Underwriters” meetings (transaction approval, occurring 368 times in his calendar)
• Weekly Market Risk updates
• Weekly RAC Staff meetings
• Regular EES Task Force meetings (243 instances, focusing on Enron Energy Services risk issues)

The “Underwriters” meetings served as the primary transaction approval forum at Enron. Through this process, Buy and his team reviewed deals before they could proceed, assessing credit risk, market risk, and portfolio impact. In June 2001, when Andy Fastow issued a memo requiring all mandates for mergers, acquisitions, and finance work to be approved through designated Finance executives, Buy forwarded it to his team with instructions: “Dave - we can act as a check on this. Be sure all underwriters are aware.”

RAC Division Leadership

Buy led a substantial organization within RAC. His top correspondents included Ted Murphy and David Port from the RAC team, along with Shona Wilson in risk reporting. Beyond his direct staff, Buy maintained regular communication with Chief Accounting Officer Richard Causey (225 emails), COO Greg Whalley (222 emails), and CEO Ken Lay (139 emails), reflecting his role as a peer among the executive leadership.

In December 2000, Buy documented RAC’s strategic accomplishments for the year in a memo outlining three major initiatives. First, the division completed a comprehensive quantification of Enron’s foreign exchange exposure, a project Buy noted had never been attempted before at the company: “Total Foreign Exchange Exposure quantified and communicated to BOD… The notional exposure as well as impact on potential impact on earnings and CTA accounts have been quantified and reported to the BOD over the past year. Enron has never had a comprehensive review of FX exposure prior to this activity.”

Second, RAC established what Buy called a 53-element work plan to strengthen risk and trading controls for Enron Energy Services, the retail arm that had grown rapidly but lacked mature back-office infrastructure. Third, he launched “Project Doorstep,” a global initiative in which RAC inspected every Enron office worldwide to determine whether trading was occurring and whether corporate controls were being followed.

Organizational Restructuring in 2001

In February 2001, Buy reorganized RAC into cross-functional teams designed to break down departmental silos and provide more integrated risk assessment. In a memo to staff dated February 8, 2001, he explained his philosophy: “The purpose of this exercise is to better serve the customer, the commercial business units and achieve this within our control framework. Ancillary benefits include cross training of RAC employees and heightened awareness of RAC issues. ‘De-silo-ization’… There are no excuses for forgetting to consider the impact on a deal of credit, market risk or our portfolio. All team members are responsible for all aspects of a transaction.”

Buy tied performance on these teams directly to compensation: “Individual performance on the teams will be strongly considered in the PRC and compensation processes.” The February 2001 email spike in Buy’s archive (2,041 messages that month, double the typical volume) suggests this reorganization required significant coordination and communication.

By October 2001, with Enron’s crisis building, Buy was attempting to formalize operational risk management as a distinct discipline. He announced an Operational Risk Committee to be led by Wanda Curry, bringing together representatives from Enron Assurance Services, RAC, Research, Information Technology, and Arthur Andersen. “It will be our challenge to identify, assess, categorize, quantify and mitigate exposure to operational risk,” Buy wrote. However, Sally Beck responded asking for clarification on how this new initiative would complement existing internal audit and risk reporting processes, suggesting organizational confusion about overlapping responsibilities.

Relationship with Vince Kaminski

Buy worked closely with Vince Kaminski, the head of Enron’s quantitative Research group, whose team provided the mathematical models and valuations that RAC relied upon for transaction analysis. The relationship was collaborative but also surfaced tensions over the pace and priorities of risk management initiatives.

In April 2001, when Bill Bradford from EES complained about delays in developing credit risk models, asking “Should this not be a Credit/Research initiative while the business unit focuses on originating good economic transactions?”, Buy expressed frustration with the theoretical bent of some modeling efforts. He wrote to David Delainey and Janet Dietrich: “I believe the following series of emails is a colossal waste of time. Lets get risks into books, risk systems working, options valued and into books. It seems we are trying to build a race car when there are no roads.”

This tension between practical risk infrastructure and sophisticated modeling reflected broader challenges at Enron, where the company’s rapid expansion frequently outpaced its control systems. At the same time, Buy valued Kaminski’s expertise and sought his team’s participation in governance structures, with Kaminski nominating Rakesh Bharati to serve on Buy’s new Operational Risk Committee in October 2001.

The most significant documented interaction between Buy and Kaminski concerned the Raptor special purpose entities. On October 4, 2001, Kaminski wrote an email about LJM/Raptor valuations that stated: “I feel strongly that I cannot support the valuations my group has produced so far for the LJM/Raptor related transactions without examination of all the related legal documents. I feel that we did solid work based on verbal information, but I cannot guarantee the quality of the final product without looking at the contracts. These transactions are too complex and controversial to bypass due diligence requirements that you would expect from any professional.”

Buy forwarded this email on November 1, 2001 with only the note “FYI, Rick Buy” - providing no documented response to Kaminski’s concerns about the inability to support Raptor valuations. According to later reporting, Kaminski had raised concerns about LJM to Buy earlier, and while Buy reportedly “shared those concerns with upper management, he did not stop LJM’s first transaction.”

Role in Approving SPE Transactions

Congressional testimony documented that Buy, along with Chief Accounting Officer Richard Causey, “was assigned to monitor such deals to protect Enron’s interests” - referring to the special purpose entity transactions including LJM and Raptor that became central to Enron’s collapse. The same testimony characterized the accounting problems as having been “instigated and/or approved by Andrew Fastow, Enron’s Chief Financial Officer; Richard Causey, Enron’s Chief Accounting Officer; Rick Buy, Enron’s Chief Risk Management Officer; Arthur Andersen; and by Vinson & Elkins, Enron’s outside counsel.”

The extent of Buy’s actual authority over these transactions remains ambiguous in the documentary record. His role in the “Underwriters” meetings gave him oversight of transaction approvals, but it is unclear whether RAC possessed true veto power over deals that senior management wanted to complete. Members of Buy’s own staff later indicated they had “advised him months in advance that Enron’s off-balance sheet investments contained significant risks which could negatively impact Enron’s balance sheet and possibly its survival.”

Buy regularly participated in board-level presentations and strategic planning alongside Fastow. In August 2001, a meeting was scheduled with “Pug Winokur, Andy Fastow, Ben Glisan, Tim DeSpain, Rick Buy” to review board materials. In September 2001, Buy was scheduled to present to “Ken Lay, Greg Whalley, Mark Frevert, Rick Causey” with Fastow also presenting, indicating Buy’s role as a senior executive peer rather than a subordinate reviewer.

Warning Signs and Sherron Watkins

On August 14, 2001, Sherron Watkins sent Buy an email that represents one of her earliest documented expressions of concern about Enron’s accounting. After Buy complimented her work on a project, Watkins responded:

“Wow - you are really busy if your lunch calendar is booked for the remainder of the month! Sept. lunch sounds good. I sure hope we make good use of the bad news about Skilling’s resignation and do some house cleaning - can we write down some problem assets and unwind raptor? I’ve been horribly uncomfortable about some of our accounting in the past few years and with the number of ‘redeployments’ up, I’m concerned some disgruntled employee will tattle. Can you influence some sanity?”

Watkins’ question - “can you influence some sanity?” - suggests she viewed Buy as someone who might share her concerns and potentially have influence over the situation, though perhaps not final authority. This email preceded Watkins’ more famous August 15, 2001 letter to Ken Lay by one day. Whether Buy responded to Watkins’ concerns or discussed them with others is not documented in the available email record.

Key Correspondents

Buy’s email network reveals his organizational connections and operational focus.

Karen Heathman, Buy’s executive assistant, handled 912 emails in the archive.

Email Activity

Buy’s email volume patterns reflect key periods in his tenure and Enron’s collapse.

The February 2001 spike corresponds directly to Buy’s reorganization of RAC announced that month. The November 2002 spike represents archival activity well after Buy’s February 2002 termination rather than active correspondence.

Collapse and Termination

As Enron’s crisis accelerated through fall 2001, Buy remained engaged with the company. On November 16, 2001, Enron’s legal counsel Robert C. Williams informed Buy that he had been “named as defendants (along with Enron Corp., Ken Lay, Jeff Skilling, Andy Fastow, and Arthur Andersen) in one of the federal securities class actions.”

Buy’s last substantive email in the archive came on December 26, 2001, sent to Ted Murphy from New Hampshire: “Ted - I’m in New Hampshire. Will be to end of next week unless I get ordered back or fired. Hope all is well. Happy Holidays. Rick.” The casual acknowledgment that he might be “fired” proved prescient.

On February 14, 2002, Enron terminated Buy along with Chief Accounting Officer Rick Causey. The firings came two months after Enron’s December 2001 bankruptcy filing, as the company and various investigative bodies worked to determine responsibility for the collapse.

Legal Status

Despite his senior position, his designation in congressional testimony as having “approved” controversial transactions, and the federal securities class action naming him as a defendant, Rick Buy was never criminally charged in connection with the Enron scandal. He does not appear among the sixteen people who pleaded guilty or the five others found guilty at trial for crimes committed at Enron.

The reasons for the absence of criminal charges against Buy are not publicly documented. The question of his actual authority - whether he could reject transactions or merely review them, whether his concerns when raised were overruled by more senior executives - may have been factors in prosecutorial decisions. The documentary record shows Buy was aware of concerns about Raptor and other SPE structures, received warnings from staff and from Sherron Watkins, and forwarded Kaminski’s statement that he could not support Raptor valuations, but does not establish what actions Buy took in response or what obstacles he may have faced.

See Also

• Vince Kaminski - Head of Research who raised concerns about Raptor valuations to Buy
• Risk Management - Overview of Enron’s risk management philosophy and failures
• Raptor - The special purpose entity structures that Buy was assigned to monitor

References

This article draws on Rick Buy’s email archive of 15,550 messages spanning December 1999 to November 2002, congressional testimony from the House Committee on Financial Services (CHRG-107hhrg77991), CNN Money reporting on Buy’s termination (February 14, 2002), and CFO.com coverage of Kaminski’s warnings about LJM.