Enron - a Testament to Greed

By: J.G. Schwam

Enron was the Texas oilman's dreams come true. A vehicle by which energy purchasers such as power companies and local natural and oil distributors can buy electricity and oil and gas products weeks or months in advance of their delivery. Cash in pocket before your customer even gets the goods. But as it turns out Enron is not much more than an out and out testament to greed. Enron's management chose to enrich themselves excessively to an extent yet to be entirely disclosed.

It is obvious now they must have had some knowledge that their vast energy trading bubble was nearing collapse. There is evidence that both CEO Kenneth J. Lay and CFO Andrew S. Fastow had large stock sales shortly before the collapse while at the same time prohibiting employees whose retirement funds were nearly entirely vested in Enron stock. Those portfolios of hard working employees are now nearly worthless.

A couple, both of whom worked at Enron for a great many years submitted their retirement request shortly before the collapse. They expected to comfortably retire after many years of hard work with a stock portfolio of nearly $900,000.00, mostly in Enron stock. Today that same portfolio is barely worth $200,000.00. These employees where prohibited from selling stock while all the while Fastow, Lay and others were selling stock and/or paying themselves bonuses worth up to 55 million dollars. You have to really be greedy and pretty stupid to run a 75 billion-dollar oil and gas company into the ground. Mr. Fastow appears to be so arrogant, so scared or so unapprised the facts of financial and accounting decisions by his staff as to fail to appear for a SEC subpoena to provide answers to their questions.

These questions include evidence found in statements made by the accounting firm of Arthur Andersen that a so called special purpose entity withheld from the auditors contributed to a 586 million dollar loss. They also withheld information about another special purpose entity called Chewco investments that has existed at least since 1997. Arthur Andersen auditors stated that had they known about Chewco the accounting would have been different and this would have drastically changed their reported profits. So where are all of the billions of dollars? There is not yet any data disclosed on another special-purpose entity LJM Cayman. Sounds like an offshore bank or shell company to me? We can only wait and see.

Nearly everyone in the country gets the shaft from theses guys. The prices and deliverability of the oil, gas and electricity traded by Enron with local utilities now comes into question.

Enron leveraged it's own natural gas, electricity and gasoline assets and those of hundreds of others by trading and manipulating the value of those assets based on availability and demand. Basically there is nothing wrong with this. It is done legally and ethically on many commodity exchanges around the world. A public company is regulated by the SEC but not in the same way as an exchange is. This gives the managers relative free reign to structure their quarterly financial statements to the SEC in any way they want within "generally accepted accounting standards". All company's financial statements must be "certified" by a certified public accountant. But if they withhold records as they have from their auditors, the specter of criminality rises up. If you have nothing to hide why withhold any "smoking" documents. Would Enron's shady deals ever have surfaced if they were so shady that they would ultimately crash and burn up dozens of billions of dollars? We may never know. But I suspect that the SEC will not be messed with, they will get the answers.

As we all know by now, despite what the right wing mouthpieces are telling us, the oil industry dictates energy policy in the Bush administration. This is very much like letting the fox dictate policy for the egg industry. The chickens are going to take it on the chin. Folk's we are the chickens in this case.

Electricity prices have steadily climbed in the last 3-4 years. I don't care where you live, am I wrong? Is your electric bill dramatically higher than it was? All the while we keep hearing about gobs of cheap oil, gas and coal in the market. What is going on here? It seems that Enron has created a market for manipulation of a critical resource. If this trading operation is supposed to operate as a legitimate commodity exchange of sorts then why doesn't it? You don't see rampant fluctuations in the orange juice or coffee futures when the basic resource (coal, gas and oil) is cheap and stable. What's the deal here? I say its greed run wild, greed at the expense to a huge extreme of the people and government of California and all of us.

J. Robinson West wrote in the Washington post that it is a popular myth that the oil industry controls the energy policy of the Bush administration. He states that facts do not bear this out but offers no facts to justify this statement. If this is true then why does the administration refuse to disclose details of their recent energy policy meeting with industry big wigs which included Enron. Did those big wigs know at that point that they were heading for a fall as a result of their shady greed driven practices? Is this why they will not disclose the contents of their discussions?

The SEC and Congress if necessary are duty bound to investigate and prosecute the irresponsible greedy executives who may in fact be found to have lied, manipulated, cheated and stole from their employees and all Americans both rich and poor.

So what does all of this have to do with Bush and his administration of big business cronies? Kenneth J. Lay and Enron are one of his biggest campaign financiers and part of that Texas oilman's good old boy network. Do you think Bush senior owned any Enron stock? Did he sell it recently? There are lot's skeletons in them thar' closets. They need to be smoked out.