Reporters follow the Enron money in high-stakes whodunit.

THE following is an excerpt from the book "24 Days: How Two Wall Street Journal Reporters Uncovered the Lies that Destroyed Faith in Corporate America," by Rebecca Smith and John R. Emshwiller (HarperBusiness, $25.95).

The reporters, after coming across vague references to off-the-balance-sheet partnerships at Enron being run by the company's chief financial officer, mentioned those partnerships in a "Heard on the Street" piece that ran in the Journal in late August 2001. That mention resulted in a phone call from an inside source who provided critical information and documents concerning those partnerships. In this passage, the first contacts are made with the key source.

The person who phoned Smith sounded eager to talk, if somewhat nervous. It was one thing for someone to read a story and, over a morning cup of coffee, grouse about its incompleteness. It was something else for a reader to pick up the phone and actually offer to fill in the holes for the reporter.

The message left on Smith's office voice mail was vague and intriguing: "Hello, this is -- in --. You had a good story about Enron. I've got some additional information that might interest you. You're just scratching the surface. If you'd like to chat, give me a call at --."

Smith called back immediately. The voice that answered was friendly but also a trifle wary. The person worried that top Enron executives, especially (CFO Andrew) Fastow, might find and punish anyone who criticized them. Smith gave the reassurance that reporters usually give in such circumstances. She'd protect the caller's identity except insofar as it had to be known to others at the newspaper. She said she understood how hard it was to step forward and told the caller not to worry.

Smith wanted to hear the full story, but she feared that if she pushed for too much information too soon, the person would bolt. So she let the conversation flow, interrupting only to get a few details in key places. Mostly she wanted to start establishing trust. On both sides.

Many people believe newspapers are so all-powerful that they can "make things happen." The caller seemed to share this view. But Smith had long ago learned that the truth was something less cataclysmic. Newspapers could instigate change not by being agents of change, but by supporting agents of change. It was an important distinction, and it made a reporter focus on working with sources that were in possession of better information than any outsider, including a reporter, could acquire.

As the source talked, Smith felt as if she'd found someone with a long-range scope. The caller knew a lot about Enron and came across as balanced, intelligent and genuinely offended by Fastow's conduct. The person mentioned "internal documents," the most beautiful phrase in a reporter's lexicon.

According to this person, Fastow had been running what amounted to an internal investment fund at Enron that probably earned him more money than his paycheck as chief financial officer. Lots of people knew about the setup and hated it--some simply because they were jealous, others because they thought it was outrageous and unethical for Fastow to have such a glaring conflict of interest.

Enron was awash in poorly performing assets for which it often had overpaid. Fastow's entities enabled Enron to sell off some of the assets for cash for the partnerships while also removing from its balance sheet large amounts of debt originally used to buy those assets. This process of raising cash and reducing debt allowed Euron to create the appearance of growth that Wall Street wanted to see. But, given Fastow's hugely conflicted role, were these real transactions or just shams to buff up Enron's financial face?

As a reporter, Smith had learned the value of staying cool, ever skeptical. It was a guard against "needling a story," as journalists call reporting that hypes an angle, distorting reality. But there was no denying that the source had rekindled her desire to dig down to bedrock.

It was thrilling when the pieces began to come together and when sources came forward expecting no more reward than the satisfaction of seeing that, as Chaucer wrote in a favorite phrase of hers, "murder will out," or the truth be told. After a second conversation with Smith a day or so later, the source--whom Smith dubbed "Our Mutual Friend"--sent the first set of documents related to one of the Fastow partnerships.

The story had an unmistakable whiff of a scandal. Yet there were many questions that needed to be answered, among them why (Jeff) Skilling, (Kenneth) Lay and the board had cooperated in an arrangement that appeared to amount to featherbedding for Fastow. It looked as though Enron was saying one thing in public about its earnings prospects and then taking steps, privately, to shore up a weak structure that was little understood by investors.

The document from the source indicated that the partnership looked to raise at least $200 million from outside investors. While it was often written in short, incomplete sentences, the messages it contained were clear enough. These guys are working both sides of the street, Smith thought with rising indignation. Fastow was bragging about how he had access to special inside information that could be used to make money for partnership investors--not Enron shareholders.

Emshwiller thought he'd gotten pretty cynical covering stock swindlers. But in some ways, Fastow's partnerships were starting to look every bit as sleazy as the average stock scam.

Smith arranged for a three-way phone conversation that included Emshwiller, who was eager to hear what the person had to say. The three ended up talking for than an hour. While clearly not privy to everything, this person knew enough to convince the reporters that they had barely scratched the surface.