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

To: Baldur Fjvlnisson who wrote (4338)	8/9/2002 7:27:21 AM
From: Mephisto	Read Replies (1) \| Respond to of 5185

"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