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


To: Raymond Duray who wrote (1129)2/2/2002 3:01:33 PM
From: c.horn  Read Replies (1) | Respond to of 3602
 
Another yawner full of personal attacks.

Why don't you give up?



To: Raymond Duray who wrote (1129)2/2/2002 3:04:30 PM
From: greenspirit  Read Replies (1) | Respond to of 3602
 
The top recipient of money from bankrupt Global Crossing was John McCain.

He's one of those "do as I say not as I do" politicians.



To: Raymond Duray who wrote (1129)2/2/2002 3:14:29 PM
From: greenspirit  Read Replies (2) | Respond to of 3602
 
By the way Ray, the rude, petulant, sanctimonious tone was noticed.

Grow up...

That is the first thoughtful question I have ever seen coming from you. Thanks.



To: Raymond Duray who wrote (1129)2/2/2002 3:17:38 PM
From: greenspirit  Read Replies (1) | Respond to of 3602
 
TOP DEM OPENED THE DOOR

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January 29, 2002 -- DEMOCRATS seeking to blame President Bush and the GOP for the Enron scandal need to look more closely at their own house - especially at the work done by the former Democratic National chairman, Sen. Christopher J. Dodd.
While many candidates of both parties have received campaign contributions from Enron and its "independent auditor" Arthur Andersen, very few have passionately fought their cause in Washington as diligently as Chris Dodd.

It was on account of Dodd's tireless efforts that Arthur Andersen was able to act as both "independent auditor" and management consultant to Enron for $100 million a year. That role - so fraught with conflict of interest that it makes a joke of the concept of outside auditors protecting shareholders - has been identified as one of the major causes of the debacle.

In 1995, it was Dodd who rammed through legislation, overriding President Clinton's veto, to protect firms like Andersen from lawsuits in cases just like Enron. The Dodd bill limited liability for lawyers and accountants for "aiding and abetting" corporate fraud by their clients, making them liable only for their "proportionate" share of the blame, rather than for the entire fraud.

So, if an accounting firm kept secret the true picture of a corporation's finances, it would only be liable for part of the total fraud on the investors.

For shareholders, this law is awful - the fraudulent company has usually lost nearly all its value before the shareholder learns about it, so there's nothing left. For the accounting firm, though, it's great - the shareholders can't pin the total losses on you.

And from Andersen's point of view, it was really wonderful, because they were already facing thousands of lawsuits for their role in securities fraud.

A grateful accounting industry showed its appreciation to Sen. Dodd by contributing $345,903 to his campaign between 1993 and 1997. Every major accounting firm pitched in - Deloitte & Touche, Ernst & Young, Coopers & Lybrand, Peat Marwick, Price Waterhouse. (Dodd has received more money from Arthur Andersen than any other Democrat - $54,843.)

From '93 to '97, Dodd also received $523,551 from the securities industry, which was thrilled with other provisions of the '95 law that limited liability from securities lawsuits, notably for firms that failed to live up to their predictions about future earnings.


Consumer groups had opposed the legislation - the U.S. Public Interest Research Group labeled it "The Crooks and Swindlers Protection Act."

But Dodd's services to Andersen didn't stop there. Every analysis so far of the Enron scandal lays much of the blame on the conflict of interest that Andersen faced in auditing and consulting for Enron at the same time.

Auditors must be independent to assure that companies do not report misleading financial data to stockholders. Once Andersen was getting up to $100 million a year in consulting fees from Enron, does anyone really believe that they would have blown the whistle on the firm's shady books?

But when the SEC tried to bar this practice, so ridden with conflict of interest, it was Chris Dodd, along with Rep. Billy Tauzin (now R-La., though a Democrat until August 1995), who according to the Associated Press "brokered a deal" to stop the SEC action.

As a result of Dodd's intervention, the SEC agreed not to issue a ban on the practice of auditing and consulting for the same client.
Such practices have led to what Sen. Barbara Boxer (D-Calif.) called "the kind of hide-the-debt shell game that took place at Enron."

In an ultimate act of hypocrisy, Dodd has now actually introduced legislation to ban accounting firms from doing consulting for companies it audits - precisely the same policy he killed when the SEC was considering it.

Now that this issue is in the public eye, Dodd is pretending to be an advocate for the shareholders. But the Enron workers who lost their pensions and the Enron shareholders who lost their portfolios know it is too late for them. And Arthur Andersen knows it makes no difference to them now.



To: Raymond Duray who wrote (1129)2/2/2002 3:22:43 PM
From: greenspirit  Read Replies (1) | Respond to of 3602
 
Enron Enabled by Clinton SEC
Dan Frisa
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Thursday, January 24, 2002
Last week on the front page of the N.Y. Times, the Clinton-appointed former chairman of the S.E.C. put forth what many observers might view as a rather self-serving, me-thinks-he-doth-protest-too-much, defense of his tenure with regard to the roots of the Enron debacle.
Arthur Levitt, the former S.E.C. chairman, recalled his efforts in the 1990s to change the standards of the accounting industry, which were met – he says – by stiff opposition from more than a dozen United States Senators who threatened S.E.C. appropriations should he proceed with such reforms.

His theory, ostensibly, was, that more rigorous rules by which the accounting industry should be conducted, would have thereby prevented abuses such as those seemingly perpetrated by Arthur Anderson in the Enron case.

There are two functions provided to corporations by the bigger accounting firms, namely: consulting and accounting.

What many believe is an inherent conflict of interest, is that to ensure continued lucrative revenues from the "consulting” side of the business, accounting firms could be tempted to comprise their otherwise strict adherence to generally accepted accounting principles on the "accounting” side to curry continued favor with their clients.

The fact that reforms of these accounting practices did not occur, Levitt maintains, resulted in the rampant abuses by Arthur Anderson in the Enron case.

Sounds plausible as far as that goes, right?

Sure it does, as a general matter, and if that is all there was to the case it would certainly be worthwhile to explore. In fact why not release the names of those senators who engaged in such questionable behavior?

However, there is a far more important and pertinent factor, which much more directly led to the Enron excesses.

In 1996, the Congress – while I was a member – enacted amendments to the Investment Company Act of 1940, to impose greater investor protections on the mutual companies governed by the statute.

Enron vigorously sought provisions to enable its growing investment activities to be exempted from certain prohibitions in the law with regard to foreign investments and the shifting of debt from its books to the off-shore subsidiaries as well as from provisions preventing corporate officers from investing in partnerships related to the company.

At that time, I served as a member on the subcommittee of the House Commerce Committee with jurisdiction over this matter and, as a co-sponsor of the act, played an integral part in the drafting and enacting of this legislation.

I recall at the time that these requests from Enron seemed odd, and in direct conflict with our intent to provide greater investor protection by way of enhanced transparency – resulting in more informed investors – while enabling certain other valid flexibilities to the mutual fund industry, which performed extraordinarily well as a result. Returns in excess of 20 percent were almost commonplace – exceeding even the Standard and Poors 500 performance for nearly all of the time since.

We did not entertain the Enron proposals and did not include them in the reforms passed with our amendments to the Investment Company Act of 1940.

Undeterred, it now turns out, Enron then went directly to the S.E.C. to lobby for regulatory relief from that which they had been rebuffed by the Congress.

Incredibly, in 1997 the S.E.C. granted by agency order that which the Congress had denied in the 1996 legislation: the very ability to lawfully engage in the conduct that appears to have directly resulted in the recent collapse and largest bankruptcy of any company in U.S. history.

When questioned by the N.Y. Times for their article published yesterday, Arthur Levitt said "he had no recollection” of the exemption but admitted that it might have wound "up being determinative.”

I’ll say!

I guess it’s somewhat understandable that those who were in a position at that time to have prevented the Enron debacle, might point fingers today in an effort to absolve themselves from any blame for the mess.

But smoke and mirrors cannot – and must not – obscure the sad history that led to this dreadful abuse by Enron, aided and abetted by both an unfortunate change in the rules by the S.E.C., as well as an accounting firm more concerned with its own revenue than upholding its fiduciary responsibility to the investing public.



To: Raymond Duray who wrote (1129)2/2/2002 3:25:05 PM
From: greenspirit  Read Replies (3) | Respond to of 3602
 
50 reasons why the Democrats are hypocrites when it comes to Enron:

1. -From 1990 to 1994 Enron gave 42% of their donations to the Democrats.
Source: The Center for Responsive Politics

2. -Florida's state pension fund, which lost $325 million on Enron, is examining what role Frank Savage, a major Democratic donor, may have played in the state's loss. The fund's investments were directed by Alliance Capital Management, where Savage was a senior executive and chairman at the same time he sat on Enron's board. He has donated $100,000 to Democrats and is raising money for New York gubernatorial candidate Carl McCall.
Source: Time Magazine

3. -Lloyd Bensten, Clinton's first treasury secretary, was a recipient of Enron's money. At the time of his campaign for Senate, he received the second largest donation from Enron.
Source: Center for Responsive Politics

4. -Robert Rubin, Bensten's successor, was involved with Enron while he worked as an investment banker at Goldman & Sachs. Clinton first hired Rubin to head his National Economic Council. Soon afterwards, Rubin wrote on Goldman Sachs stationery to former clients, including Enron, in which he ''looked forward to continuing to work with you in my new capacity.''
Source: WorldNet Daily

5. -In the days when Franjo Tudjman was Croatia's dictator and pretending to be both a reformed communist and best friend of America in the Balkans, poor Franjo had a problem. He and some of his very best friends were wanted as war criminals by the Hague's International Court of Justice. Enron wanted a power contract with Croatia. Enron offered a deal to Tudjman. Sign up with us and we will use our gang in Washington to make sure you and your friends don't go to jail.

Tudjman signed. Enron made a heap of money. Nobody went to jail. Everyone was happy - until Tudjman died of cancer. Then the lid was off, his Croatian Democratic Union was defeated and the new boys in power in Zagreb could not believe how much of their budget went to pay the electricity bills from Enron.
Source: Pittsburg Tribune-Review

6. - In August 1993, McLarty, Clinton's former chief of staff, arranged an invitation for Lay, Enron's CEO, to play golf with Clinton in Vail, Colorado. This date irritated Oscar Wyatt, chief executive of Coastal, another natural gas company that had helped the Clinton election campaign raise funds. These connections to the Democratic administration helped Enron considerably.
Source: Time Magazine

7. -Clinton officials publicly helped Enron win the contract in India as well as in Indonesia. Enron had received U.S. government funds to build power plants in China, the Philippines and Turkey. Enron also won contracts in Pakistan and Russia while accompanying senior U.S. government officials on state trips. In June 1996, four days before India granted final approval to Enron's project, Lay's company gave $100,000 to the DNC.
Source: Time Magazine

8. -Enron got permission to build a pipeline from Mozambique to South Africa after National Security Adviser Anthony Lake threatened to withhold aid to Mozambique if it didnt approve the project.
Source: Mozambique News Agency

9. -The bulk of Enron's alleged chicanery had to have happened during the Clinton administration.
Source: Fortune Magazine

10. -Enron Corporation donated $100,000 to the Democratic National Committee. Six days later, Enron executives were on a trade mission with Commerce Secretary Mickey Kantor to Bosnia and Croatia. With Kantor's support, Enron signed a $100 million contract to build a 150-megawatt power plant
Source: The Weekly Standard

11. -Kenneth Lay hired the firm of Clinton's former chief of staff Mack McLarty.
Source: Fortune Magazine

12. -Democratic Senators Chuck Schumer of New York, John Breaux of Louisiana, and Jeff Bingaman of New Mexico--chair of the Senate Energy Committee--among the top beneficiaries of Enron's political donations.
Source: Fortune Magazine

13. -Kenneth Lay retained Linda Robertson, a Democrat who worked for the Clinton Treasury Department, as his top D.C. lobbyist.
Source: Fortune Magazine

14. -Dynergy, an energy company which wanted to buy Enron and later sued them, donated $1,000 of dollars to Henry Waxman in the 2001-2002 cycle, one of the men leading the Enron investigation.
Source: Center for Responsive Politics

15. -The Democratic Senatorial Campaign Committee received three checks from the Houston-based energy and trading giant totaling $100,000. Karen Denne, an Enron spokeswoman, said the company had a record of two checks written to the committee -- dated Sept. 24 and Nov. 2
Source: NY Post

16. -Joe Lieberman's and Tom Daschle's Largest Contributor in the 2000 election cycle was Enron's Largest Creditor, Citigroup.
Source: Center for Responsive Politics

17. -Enron was apparently a big backer of some parts of the Kyoto Treaty.
Source: Enron.com

18. -Ken Lay slept in the Clinton White House and served as an adviser to the Clinton White House on energy issues.
Source: Drudge Report

19. -Enron's lead Washington lawyer is Robert Bennett, who represented Clinton in the Paula Jones case.
Source: NewsMax.com

20. -Neil Eggleston, a former White House associate counsel under Clinton, represents Enron's outside directors.
Source: NY Post

21. -David Boies, Al Gore's lead lawyer in the Florida recount, is representing former Enron CFO Andrew Fastow.
Source: NY Post

22. -Former Democratic Texas Gov. Ann Richards appointed Ken Lay ,the Enron exec, to the Governor's Business Council and received contributions from Enron.
Source: Washington Post

23. -Enron introduced the Clinton team to Lippo Industries and thence to China's People's Liberation Army (a wonderful source of political cash), to John Huang, another good provider.
Source: Pittsburg Tribune-Review

24. -Tony Lake, then Clinton's national security adviser, persuaded the impoverished, war-torn country of Mozambique to sign a $770 million electric power contract with Enron.
Source: Pittsburg Tribune-Review

25. -Al Gore and Bill Clinton introduced Enron to market managers in Russia, China, Indonesia and India. In India, Enron quickly became involved in one of that country's most massive corruption investigations, contracts were canceled and Enron was out.
Source: Pittsburg Tribune-Review

26. -Just days before Enron Corp. landed in bankruptcy court, the one-time political powerhouse may still have been funneling campaign dollars to Democratic lawmakers, federal election records indicate.
Source: Houston Chronicle

27. -Enron contributed some $682,000 to the DNC during the 2000 election.
Source: Center for Responsive Politics

28. -Ken Lay hired Betsy Moler, Clinton's deputy energy secretary, as a consultant. She was accused of stopping Energy Department counterintelligence chief Notra Trulock from briefing Congress early on about Chinese espionage and security lapses at Energy's nuclear weapons labs
Source: Houston Chronicle

29. -Government records show that, during the Clinton years, Lay and other Enron executives got seats on at least four Energy Department trade missions and at least seven Commerce Department trade trips.
Source: WorldNet Daily

30. -The congressman who recieved the most money from Enron in the past 12 years is Ken Bentsen (D-Texas) who received $42,750. The second largest receiver was Sheila Jackson Lee (D-Texas) who received $38,000
Source: Center for Responsive Politics

31. -The ranking member of the Committee on Energy and Commerce, John D. Dingell (D-Mich), is the 10th largest receiver of Enron contributions totalling $9,000.
Source: Center for Responsive Politics

32. -71 House Democrats received $257,140 Enron Contributions.
Source: Center for Responsive Politics

33. -Senate Majority Leader Tom Daschle (D-SD) was the 20th member of the Senate to have received the most money from Enron. He received a total of $6,000.
Source: Center for Responsive Politics

34. -29 Senate Democrats, not including those that are retired, were unseated, or died, received a total of $110,513 in the last 12 years from Enron.
Source: Center for Responsive Politics

35. -To help push through energy initiatives in Africa, Clinton’s Energy Secretary (and Monica Lewinsky’s job counselor), Bill Richardson, visited Nigeria in August 1999. “As a result of Secretary Richardson's visit to Nigeria in August, we have embarked on a bilateral cooperation program. The Department is developing an action plan with the Government of Nigeria, which will be coordinated with USAID. Cooperation could include: restructuring and privatization; rural electrification; deployment of clean energy and renewable energy technologies; promotion of energy efficiency; and development of an independent regulatory authority.

This initiative, coordinated by Richardson, led to $882 million dollars in power contracts for Enron from the government of Nigeria:
Enron, an oil and gas firm in Houston, has signed a power purchase agreement to supply emergency electricity to state-owned power utility Nigerian Electric Power Authority (NEPA) through 30MW power barges located on the coast of Lagos State. Enron and its Nigerian joint venture partner signed the $82 million deal with NEPA and the power ministry in the capital Abuja. Enron and the Lagos state government entered a joint venture earlier in 1999 to build an $800 million gas-powered plant with capacity for 540 Megawatt (MW) to augment supply to the city. Unfortunately for Enron, the Nigerian Government cancelled these contracts in April 2000. As a further reward for their generosity to the Democratic Party, Clinton Administration Special Envoy Thomas Pickering hustled off to Nigeria (on the taxpayer’s dime) to plead Enron’s case.
Source: Several Sources/FreeRepublic.com

36. -Texas Democrats received more Enron contributions than Texas Republicans.
Source: CBS Affiliate KTVT in Texas

37. -Hillary Rodham Clinton ordered the destruction of documents, which Enron is now accuse of doing, of four files in 1988 from her work on the failed savings and loan that's now at the heart of the Whitewater affair.
Source: NewsMax.com

38. -During the 1991-92 election cycle, Enron gave $28,525 to the Democratic party while former Clinton Secretary of Commerce Ronald Brown served as the chairman of the Democratic National Committee. Enron gave $42,000 to the Democratic party in the 1993-94 cycle.
Source: PublicIntegrity.org

39. -According to internal Enron documents and the recollections of former employees, Chairman Kenneth L. Lay had the ear of top Democrats in the 1980s and '90s. He and his colleagues used that access to promote the company's interests with the Clinton administration and key congressional Democrats.
Source: Washington Post

40. -According to another Enron memo, Lay met with former Clinton Energy Secretary Federico Peña to urge White House action on electricity legislation favored by Enron. Peña "suggested that President Clinton might be motivated [to act] by some key contacts from important constituents,"
Source: Washington Post

41. -Ken Lay was one of 25 business executives on Clinton's Council on Sustainable Development.
Source: Washington Post

42. -Enron's political action committee gave $10,000 in 2000 to the New Democrat Network, which was co-founded by Sen. Joseph I. Lieberman (D-Conn.). Lieberman, the Democratic vice presidential nominee that year, now chairs the Senate Government Affairs Committee, which is leading an inquiry into Enron's collapse.
Source: Washington Post

43. -Several senior Enron officials spent election night at Vice President Gore's headquarters in Nashville.
Source: Washington Post

44. -Enron backed Charles E. Schumer (D-N.Y.) in his successful 1998 campaign to oust Republican Sen. Alfonse D'Amato. Schumer's views on electricity deregulation dovetailed closely with Enron's.
Source: Washington Post

45. -Two years later Schumer, who has advocated deregulation as a way of reducing New York state's high power costs, co-authored a bill to restructure electricity markets along lines favored by Enron.
Source: Washington Post

46. -Enron also has supported Senate Energy Committee Chairman Jeff Bingaman (D-N.M.), whose state is traversed by a major east-west Enron gas pipeline.
Source: Washington Post

47. -Former employees say Lay's friendships with other Democrats were based as much on rapport as pragmatism. This group includes former senator Bob Kerrey (D-Neb.), whose brief 1992 presidential bid had Lay's backing, and Sen. Evan Bayh (D-Ind.), with whom Lay served on the Eli Lilly Co. board of directors in the 1990s.
Source: Washington Post

48. -In 1996, the Federal Energy Regulatory Commission, stocked with Clinton appointees, helped Enron with a series of orders that weakened the monopoly of nuclear and coal-burning utilities. In July of that year, Enron gave $100,000 to the Democratic Party.
Source: Washington Post

49. -In 1992, a Democratic-controlled Congress approved a major energy bill that set the stage for a new wholesale electricity marketplace. Trading companies such as Enron could use the transmission lines of regulated utility companies to sell blocs of electricity to private customers.
Source: Washington Post

50. -Some officials in Enron's Houston and Washington offices backed Gore and Lieberman in the 2000 election.
Source: Washington Post
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