I still say that the Congressional refusal to tighten accounting regulations which Levitt wanted (indeed, campaigned for over several years) will prove to be the largest structural failure which allowed this - and other - messes to occur.
With the accountant watchdogs bought off, anything is possible.
As to the NY Times article about the waivers of ICA 1940 provisions, I'll just quote from the article (it was a more minor failing):
"...Another former S.E.C. official who is an authority on the Investment Company Act, was more critical."
"This was a case of giving Enron an inch and they took miles," said the former official, who spoke on the condition of anonymity. "They were given a significant new opportunity, and they took it and flew it smasho into the ground."
" Mr. Barbash, the lawyer at the S.E.C. who approved the exemption, said in an interview this week that he viewed the exemption as narrow because it applied only to the foreign operations of Enron and some of its subsidiaries. He said that it was successful in that it managed to head off Enron's efforts to have a broadly worded exemption written into the law "that companies could have then driven trucks through."
"Enron knew the regulatory boxes, and they tried to fashion their businesses to fall outside of those boxes," Mr. Barbash said. "Much of what's been written so far about the company is that it turned itself inside out like a pretzel to fall outside of restrictions — accounting restrictions, taxpayer restrictions and regulatory restrictions." |
