Enron a Shadow of Former Self
1:01 PM PDT, October 13, 2002
latimes.com E-mail story
By KRISTEN HAYS, AP Business Writer
HOUSTON -- A year after Enron Corp.'s public
facade as a thriving global energy behemoth began
to crumble, only hints of those heady days remain
in the company's 50-story headquarters.
Former chairman Kenneth Lay's corner office on
the top floor, with its view of the city skyline -- and
what used to be called Enron Field, before the
embarrassed Houston Astros changed the name --
is vacant.
The 2,000 workers left in the building that once
housed 7,500 are consolidated on half-empty
floors. The Starbucks in the lobby remains open,
but lines of java lovers are rare; most of Enron's
now-14,000 workers worldwide work at the
company's pipelines and power plants.
The cavernous board room for 15 directors is too spacious for the current
slate of just four directors, none of whom were around for the financial sleight
of hand that led to Enron's demise.
Interim chief executive Stephen Cooper, a restructuring expert, uses former
CEO Jeffrey Skilling's office, which faces Enron's smaller twin building.
Intended to showcase its once-envied trading operation, the bankrupt
company last week sold the tower for less than half its $240 million
construction cost.
"It's not the same company," spokeswoman Karen Denne said.
But what Enron, No. 7 on the Fortune 500 list two years ago, retains is the
image of corporate malfeasance it earned Oct. 16, 2001, when it revealed a
$618 million loss and eliminated $1.2 billion of shareholder equity.
Those revelations opened the door to an elaborate knot of partnerships and
off-balance-sheet debts that quickly fueled Enron's failure.
"It would have been unthinkable to imagine the events that were about to take
place," said John Abraham, a former executive with the company's broadband
unit.
Enron admitted that its financial statements had been wrong for years, in what
became the first in a string of corporate and accounting scandals involving
companies such as Adelphia Communications, Global Crossing and
WorldCom. Enron filed for bankruptcy in December, six weeks after its
financial maneuvers were disclosed.
"Enron started to open the Pandora's box of all sorts of other evils, and Enron
was certainly the mother of all other frauds," said John Olson, of Sanders
Morris Harris, whose skepticism of Enron -- rare among analysts before the
October earnings release -- drew the company's ire.
Enron's collapse sparked investigations by at least 14 regulatory agencies and
11 congressional committees, and shareholder lawsuits. At least three books
on the collapse have been published and CBS will air a movie, "The Crooked
E," based on former trader Brian Cruver's account of the implosion.
Criminal charges against just a few alleged wrongdoers have been filed since
mid-June, after Enron's former auditor, Arthur Andersen LLP, was convicted
of obstruction of justice for shredding and doctoring Enron-related documents.
Andersen is to be sentenced Wednesday. David Duncan, Andersen's former
top Enron auditor who pleaded guilty to obstruction, has an Oct. 25
sentencing date.
Former Enron chief financial officer Andrew Fastow, as well as three London
bankers, are charged with creating or investing in partnerships to scam Enron
shareholders while they pocketed millions. Fastow, who said he was following
orders, is free on $5 million bond.
Former federal prosecutor Robert Mintz, now a partner at McCarter &
English in Newark, N.J., said the public may be frustrated at the pace of the
probe, particularly in contrast to the speediness of criminal charges filed
against former WorldCom and Adelphia executives.
"The reality is that the stakes here for the government are enormous," Mitz
said. "Prosecutors have to be immune from the pressure that politicians and the
public in general may bring on them. It's the federal prosecutors who are
standing in court who have to prove those cases."
Meanwhile, Enron is seeking bids this month for its 12 most valuable assets,
including the Portland General Electric utility in Oregon and its stakes in three
pipelines. Last month, Enron held the first of several surplus property auctions.
Even Enron's Web site has slimmed down, but a message with a list of
milestones since the company's 1985 inception recalls the pre-scandal days:
"Enron has accomplished more in its 15-year history than many of the world's
best-known companies have in a century," the message says.
"Why? Because Enron employees have an insatiable drive for trying the
unexpected, thinking the unthinkable and accomplishing the unattainable. We
have set a new course for energy and communications in the new millennium ...
Keep your hiking boots on. The journey has just begun." |
