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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (268)	1/16/2002 1:44:04 AM
From: KLP	Read Replies (1) \| Respond to of 3602

My guess is that this Enron mess is going to involve a lot of things....and underlying it all, it may be the so called guidelines for all business dealings... Question: are the laws so many and complicated for every business transaction we have today, and then add the complicated tax regulations....(that are so complex they take up shelves and shelves) .....and then the lawyers either don't agree on the laws and regulations, but advise their clients the way it seems to be most advantageous, and still within their "understanding" of the law...., that... is it time for us to get serious about the regulations that guide us? Have the lawyers and courts so confused the laws that no one can do anything without breaking at least one law? How can someone as bright as Dr. Kenneth L. Lay, who holds a doctorate in economics, head a company and have this happen? Will be interesting to know what the Corporate culture of Enron was. And also to know the background and work style of Skilling and Andrew S. Fastow..... snip>>>>>>>>>>>>Messrs. Lay and Skilling made a formidable team. The courtly and amiable Mr. Lay had wide-ranging experience in government, academia and business, and his opinion was frequently sought in the energy world. Mr. Skilling, a Harvard M.B.A., was a brash, fiery figure who spoke rapidly and peppered his conversations with financial jargon. Without warning, Mr. Skilling resigned on Aug. 14. He initially cited "personal reasons." But in an interview the next day he said his own frustration over Enron's weakening share price -- then about $43 -- played a major role in his decision. "I don't think I would have felt the pressure to leave if the stock price had stayed up," he said. The abrupt departure forced Mr. Lay to retake the reins. He was reassuring to the public. "I can honestly say the company is in the strongest shape it's ever been in," Mr. Lay said at the time. He also promised that in the future, Enron would be more open and accessible to investors. Mr. Lay acknowledged that the company had "lost some credibility" with investors. Dealings With Partnerships The day of the announcement, Enron filed its report with the SEC for the three months ended June 30. Tucked in the 36-page document were several paragraphs describing deals involving hundreds of millions of dollars between Enron and unnamed partnerships headed by and partly owned by an unnamed "senior officer" of the company. The filing added that the officer had sold his partnership interests in July and "no longer has any management responsibilities for these entities." But it wasn't Mr. Skilling who ran the two partnerships, known as LJM Cayman LP and LJM2 Co-Investment LP. It was Chief Financial Officer Andrew S. Fastow, a Skilling protégé who was still very much with the company. The "LJM" came from the first initials of Mr. Fastow's wife and two sons. A company spokesman said the dealings between Enron and Mr. Fastow's partnerships were perfectly proper and had been done to help Enron protect its assets against fluctuating market prices. The partnerships had been around for two years and appeared in Enron SEC filings during that time. But the manner in which they were disclosed, with different pieces of information appearing in different filings, made it difficult to learn such basics as which senior executive was running the partnerships. Worse, there was no way from the available information to understand just what the partnerships were doing or what impact they had on Enron's finances. Some stock and credit analysts say they had never heard about the LJMs until they read about them in the newspapers in recent weeks. Mr. Fastow's LJM dealings were, however, well-known within Enron and a magnet for criticism. Part of LJM's activities involved buying Enron assets, and some officials balked at doing deals that could enrich a senior executive at the company's expense, say people familiar with the matter. At least two senior officials complained internally about the potential conflicts of interest. The concerns were turned aside by top management, say the people familiar with the events.<<<<<<<<<<<<<<<<<snip From WSJ----->ENRON'S FALL and .....: Culture of Secrecy WSJ 12/5/01(don't have a site for this...but do have the entire article available)