The Enron debacle is may be old news but still elucidates a corporate mentality that ever seeks dominion over our every thought and breath, that it may more effectively pick our bones. In their 2003 book, The Smartest Guys in the Room, Bethany McLean and Peter Elkind remind the gullible that so-called experts in the financial world need to be scrutinized carefully, that the respectability of their $300 haircuts and $4,000 dollar suits wither in the harsh light of a mug shot.
Wall Street apologists will caution that we should not judge a whole industry by the criminal behavior of a few bad apples but scrutinizing those bad apples reveals some interesting if wormy data: top Enron officers were among the loudest proponents of the “free market”, calling for deregulation when it promised them rip-off privilege but crying out for government largess when that would firm up their quarterly reports. The most prestigious of accounting firms, Arthur Anderson, turned a blind eye to illegal and/or deceptive Enron accounting methods since that was immensely profitable for the firm (short-term of course – ultimately it destroyed them). Wall Street analysts bought into Enron PR instead of analyzing. Politicians took the money and ran. Lawyers bent the law, Bankers took obscene fees while putting their depositors at risk. The central theme throughout the Enron story? Greed: million dollar fees left and right bought compliance and silence; multi-million dollar bonuses dazzled and corrupted; A vicious back-stabbing competitive Enron culture rewarded chicanery and weeded out employees with integrity, the few who mustered the courage to question the party line.
In the end co-conspirators were all frantically blaming someone else and one cornered big fish turned state’s evidence to reduce prison time. Enron’s Chief Financial Officer, Andy Fastow (CFO-turned-rat), served six country club years and, despite millions in fines, remains a millionaire. Top executives were urging employees to buy stock, “It’s going nowhere but up, we’ll all be rich!” while quietly selling off their own shares and squirreling away millions. Part of the function of accountability is to deter future crime, which apparently Enron and other corporate criminals rise above, ill-gotten gains only partially recouped. Another manifestation of this truly class war is the decision by our Muslim-Socialist-Communist-Uncitizen president not to pursue criminal charges against the previous criminal administration. To paraphrase a famous pirate, “Rob a convenience store and you’re a criminal, rob the U.S. treasury and you’re an entrepreneur.”
There was some meager justice in the Enron case: CEO Jeff Skilling spent $42 million in legal fees and will be in prison (albeit country club) until he’s 74. His family however remains free and holding, and enjoying, his remaining millions. The infamous Ken Lay, George Bush Jr.’s Kenny Boy, creator of Enron, would have received a stiff sentence also had he not gone and died – fruit for conspiracy theories here. His family also is enjoying whatever remains of his fortune not appropriated by defense lawyers and not squandered by his profligate spending. Most negative consequences however fell upon naive Enron employees and other investors. With the recent MF Global Holdings bankruptcy, larger even than Enron, it is clear that, to mix a metaphor, gangsters still have a pipeline into the henhouse and the guards… well, what guards? Why ever would the Free Market need guards?