"the real shocker of Enron will be that what they did was mostly legal. The legislation
was and probably still is - tailor made for fraud."
>>>>>>>
Baldur, the real tragedy, as you noted, is that the accounting tricks were legal, and no matter
what we do or say Bush, the SEC, Ashcroft and others will fight to keep the accounting gimicks
legal. I'm not sure we can count on Congress for much help either. Many there are indebted to
accounting tricks and corporate donations.
After all, if it were not for accounting tricks and his father's name, George W. Bush would probably still be a poor man.
Washington Post notes accounting tricks were legal:
"Beyond Enron, the cream of an entire generation- the
brightest minds at the best legal, accounting, investment and
consulting firms- helped the company present its charade of
profitability and success. Of Enron's $1.5 billion in earnings
in the 15 months leading up to September 2001, more than $1
billion came from financial and accounting gimmicks that
became the real business of Enron, investigators for Enron's
board concluded.
Accountants and lawyers would attest to the legality and
correctness of the particulars of Enron's dealmaking without
challenging the misleading impact of the whole.
A Merrill Lynch & Co. senior finance executive wrote a note
to himself in 1999 about the hazards of helping Enron write
its financial fiction: "Reputational risks i.e. aid/abet income
stmt [statement] manipulation."
Enron's chief accounting officer, Richard A. Causey, followed
accounting rules and had gotten Andersen's approval on
major accounting actions at the company, his lawyer said this
week. Enron's outside directors relied on Andersen's
judgment, an attorney for the directors said.
Enron was a product of its times. It became addicted to
growth, and when real growth stopped took greater and
greater risks to create the appearance of growth, said Robert
F. Bruner, a University of Virginia business professor who
studied the company.
The death spiral of Enron's stock price, from a pinnacle of $90
a share late in 2000 down to pennies, wiped out more than
$60 billion of stock market investment, much of it in the
mutual funds and retirement accounts of typical Americans.
Enron mirrored the cycle of speculation and market mania in
the 1990s stock market that brought woe to millions of
investors- all passengers on the ship of fools.
"Nobody wanted to hear bad news," said Tom Peters, the
famous management consultant who once was Skilling's
colleague at McKinsey & Co. "Did Miss Smith or Mr. Jones
whose entire pension fund was wiped out get what they
deserve? Of course not. But did we collectively get what we
deserved? Absolutely."
In the eight months since Enron's bankruptcy, a growing list
of companies have followed it on scandal's path, led by
WorldCom, Global Crossing, Tyco International, Adelphia
Communications and Qwest Communications. "
THE FALL OF ENRON | Catastrophe
Hidden Debts, Deals Scuttle Last Chance
By Peter Behr and April Witt
Washington Post Staff Writers
Thursday, August 1, 2002; Page
A01 |
