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

To: TimF who wrote (293)	1/16/2002 11:49:55 AM
From: stockman_scott	Respond to of 3602

New laws should prevent Enron II The Chicago Sun-Times January 15, 2002 Like a drowning man, the sinking Enron Corp. tried grabbing onto anything to keep above water, and the bankrupt energy giant pulled many down with it. The victims start with former employees like Charles Prestwood, who saw his retirement nest egg drop from a comfortable $1.3 million to a chilling zip. Thousands of others--at one time Enron, the nation's seventh- largest business, employed 21,000 people--had their life savings vanish as Enron stock slid from $90 a share to 61 cents in 15 months. Others, less innocent than the investors, will be identified as Congress and the SEC dig into the mess. Enron executives displayed an amazing dexterity at hiding debts and made sure to dump much of their own stock for hundreds of millions of dollars before it became worthless, an option they forbade many employees trapped in 401(k)s. Expect ripples close to home. The foundering Enron had its fingers locked around the neck of Chicago-based Arthur Andersen LLP, which already has admitted urging its staffers to shred documents related to Enron, practically up until the arrival of the congressional subpoenas. One potential class of victims who, so far, seems on dry land, are politicians in general and the Bush administration in particular. Despite close ties to Enron--its CEO, Kenneth L. Lay, was a Bush confidant and 15 Bush officials held stock--it appears that when the firm started to collapse and reached out to the administration, it got the cold shoulder. Of course, we haven't heard from Dick Cheney yet. The vice president has been mum so far as to his meetings on energy policy with his old pals. But increasing pressure will no doubt make him cough up the details. Frankly, we think Cheney's too smart to get caught in the vortex. Another difficulty for those trying to tie Enron to the Bush administration is that the power giant was cozying up with everyone, nearly; 250 politicians received the company's cash, including Democrats from Charles Schumer to Joseph Liebermann. And its deceptive practices began during the Clinton administration. In the next few months, we'll be hearing a lot about Enron, as Congress asks the question: How can a $62 billion corporation--the nation's largest to go bankrupt--become a worthless shell in no time flat without anybody noticing until the moment it collapsed? The answer, of course, is that it can't. People certainly knew that Enron was falling apart, but the crux is--to revive the classic Watergate query--who knew, what did they know, and when did they know it? What we do know now is that if there are no laws forbidding the Enron practice of hiding losses by creating partner firms, there should be. Part of the problem appears to be be the dual role of Andersen. Its accounting arm audited, that is, vouched for, Enron's finances, while its consultant branch did business with Enron. Politicians might be nervous, but they can take comfort: Their woes pale against those of the Charlie Prestwoods of the world, those who saw their life's savings wiped out, who had hoped for comfortable golden years and are cast back into a world that is colder and crueler than they imagined. Perhaps they can take some measure of comfort in the thought that they are not going to jail. Not everyone involved will be able to say that.