Pam Boschee, Managing Editor
They like to do things BIG in Texas, and Enron isn’t about to disappoint anyone.
The web of questionable actions and practices seems to be spreading widely into unexpected places, implicating unexpected players. At least six congressional panels are investigating Enron and Arthur Andersen.
The alleged degree of creative bookkeeping suggested to a layperson such as myself, based on what I’ve read, heard on the radio and viewed on TV is stunningly incredible. The devastation and fallout left in Enron’s wake is equally unbelievable. Scrutiny of consulting and accounting relationships, implications for credit rating analysis, “looking the other way” by people with power that should have intervened, and the collapse of many peoples’ financial foundations-these are only the beginning of what may yet prove to be one of the most insidious, unethical corporate orchestrations in U.S. history.
However, we were distracted from our humdrum days by ricocheting allegations of lying and cheating well before Enron-remember California?
Enron’s dark story juxtaposed with California’s market volatility of last summer makes me think of a disturbing tome of horror compared to a light novella for summer reading. The bad guys in the California story (as defined by you, depending on your own views of what went wrong, if anything) really don’t seem so bad anymore, do they? Gov. Davis’ repeated chorus of “just and reasonable” as a standard seems laughable when applied in this context. It has a simplistic ring that won’t resound in this complex jumble of improprieties (and possible illegalities).
But, a shared characteristic of these two stories is their speedy progression into the legal thriller genre.
Subpoenas are flying like arrows, and feuding law firms are catapulting bound depositions and thick case files at one another-in the ongoing California MW skirmishes and in the escalating Enron and Arthur Andersen conflicts.
I’d like to believe that Enron’s situation was an isolated aberration in the corporate world and that the extent of “bad judgement” (a term I’ve actually heard used to explain their questionable procedures) was extreme and unique. Surely it was inevitable that they would be caught.
But a more disturbing thought is that Enron tumbled only because it was confronted by a “perfect storm” (a term that was often used in reference to California)-in this case a pounding mix of bad judgement, bad people and bad luck. After all, Enron’s law firm asserted that the debt-concealing, off-the-balance-sheet partnerships were “creative and aggressive” but not illegal. Is it likely that other companies’ executives may now quietly correct their own cases of bad judgement, hoping they won’t be caught-just in case such practices are deemed illegal?
In my opinion, some business practices and individuals’ actions should be viewed as unacceptable and unethical-even if not considered illegal. But wait”that falls into the fantasy genre, doesn’t it?