SethP77
01-20-2002, 08:18 PM
for everyone's information...
you can read articles on the Enron case in Workers World newspaper, The Nation (http://www.thenation.com), and Granma Internacional (http://www.granma.cu/ingles)...
the following was copied and pasted from the latest issue of Workers World newspaper http://www.workers.org
Enron scandal: The real crime
By Leslie Feinberg
Virtually the entire capitalist political and economic establishment are decrying the captains of Enron as pirates and are ready to throw them overboard. The problem is, the ship has already sunk.
Enron was more of an ocean liner, actually. Just a month before the Houston-based energy colossus took on water like the Titanic and filed for Chapter 11 bankruptcy protection on Dec. 2, it ranked seventh on the Fortune 500 list. The transnational corporation marketed electricity and natural gas, delivered energy and other physical commodities, and--ironically--supplied financial and risk management services to customers around the world.
Since its founding in 1985, Enron's holdings had become a worldwide network, including 25,000 miles of natural gas pipeline in the United States and 8,000 miles more in South America, water treatment plants in Britain, power plants in Italy, Poland, Turkey, Guatemala, Nicaragua, Puerto Rico and the Philippines, a 65-percent stake in a giant power plant in India and much more.
The 40-story new glass skyscraper housing company headquarters towered over Houston. In 1999, Enron agreed to spend $100 million over three decades to put its name on the city's major league ballpark.
But after the company went under, it would have taken more than 15 shares of its stock to buy one hot dog at Enron Field.
Now Enron is infamous for being by far the most enormous bankruptcy this country has yet seen, and its bosses are being denounced far and wide as villains.
Villains they are. Some 4,500 workers are out on the streets. And 11,000 employees watched Enron shares plunge from $90.75 in August 2000 to a close of 26 cents on Nov. 31. Their 401K pension funds--savings from their life's work--were invested in the stock. They saw their retirement funds wiped out.
Company executives refused to let the workers dump the stock as it took a nosedive. But these upper echelons of Enron didn't get hurt in the crash. Company Chair Kenneth Lay gently floated to earth with a golden parachute. He reportedly cashed in $123 million worth of stock options in 2000 and got his hands on another $25 million last year. And only a storm of censure forced Lay to surrender his demand for $60 million in severance pay following Enron's ruin.
Other executives also made out like bandits. Enron handed out more than $100 million in bonuses in November to some 600 top company heads. (CNN.com, Jan. 12)
William Lerach, a lawyer for shareholders suing Enron, charged that 29 top executives and directors of the corporation dumped about $1.1 billion in stock during a period when "they have now admitted they were overstating the reported profits of Enron by $600 million and the stockholder equity of the company by $1.1 billion.
"Let's be direct here," he stressed. "These books were cooked by Lay and the other top executives who put hundreds of millions of dollars in their pockets, while the employees of Enron were victimized and hundreds of other investors lost billions of dollars." (CNN, Jan. 14)
Houston, we have a problem
Now the Enron financial fiasco is really hitting the fan, stirred up by Democrats hoping to create a "Watergate" as a political and investigative undertow against the Bush administration momentum--or at least a "Whitewater."
The particulars certainly are odiferous. A congressional subcommittee released a letter written by Sherron Watkins to Lay last August. Watkins was an Enron vice-president for corporate development.
In the correspondence she warned about the vulnerability of Enron to auditing exposure, in particular regarding three off-the-books subsidiaries reportedly used as fronts to pump up profits that may have enriched Enron executives while camouflaging the parent company's losses. "I am incredibly nervous that we will implode in a wave of accounting scandals," she purportedly wrote.
Now, in retrospect, Watkins is being widely hailed as an icon of business ethics. It's hard to think of those two words connected to each other. Just how much morality is involved in the cutthroat culture of big business is revealed by the widening scope of the Enron scandal.
The Arthur Andersen firm--one of the Big Five monopoly accounting giants--is taking so much flak that it was forced on Jan. 15 to fire its partner in charge of the Enron audit. The partner, David Duncan, had ordered auditors to shred Enron's electronic and paper accounting documents on Oct. 23, the day after the energy corporation disclosed that the Securities and Exchange Commission had begun an inquiry. This bombshell information, now headlines in all the media, was revealed in the Jan. 13 issue of Time magazine.
The move to fire Duncan, notes the Jan. 16 Wall Street Journal, "was seen as an effort by Andersen to isolate the Enron affair to its Houston office and shield itself from more serious charges. New evidence emerged that Anderson's Chicago headquarters knew details about controversial Enron financial arrangements that contributed to the energy company's downfall."
The order to hurriedly wipe out the email and paper trail was issued just four days before Enron made its first public disclosure about its financial problems, a staggering $618 million loss for last year's third quarter.
Thousands of e-mails and other electronic and paper trails reportedly vanished, lost to investigators and former employees hoping to sue to recover part of their lost retirement savings. There are currently some 47 class actions against Enron, its executives and directors filed by shareholders and employees.
Sherron Watkins, by the way--like many other Enron executives, including its treasurer and general counsel--came to Enron after working at Arthur Anderson. (New York Times, Jan. 16)
The law firm of Vinson & Elkins is also being hit with shrapnel in the blowup surrounding its client Enron. The prestigious law firm, with an army of 860 attorneys and nine offices worldwide, ranks as one of the 25 largest in the United States.
Vinson & Elkins, says the Jan. 16 New York Times, "is often described much like its client: hugely powerful, international in scope and rich with connections from the statehouse to the White House." The firm showed great generosity in its contributions to the 2000 Bush run for the Oval Office: almost half its 341 partners doled out for W. (Wall Street Journal, Jan. 16).
Enron reportedly asked the firm to look into the issues Watkins raised in her letter to Lay. In a nine-page response dated Oct. 15, Vinson & Elkins attorneys concluded that Enron's efforts to keep debt off its books was "creative and aggressive," but that the energy conglomerate had done nothing wrong. But within weeks, Enron had to divulge that improper accounting--much of it revolving around its secret partnerships--had resulted in overstating its earnings by almost $600 million over five years. (New York Times, Jan. 16)
All these exposures are being generated directly or indirectly by six Senate committees, two House committees and the Securities and Exchange Commission--all of which are investigating different facets of the economic disaster--and a criminal inquiry by the Justice Department.
Partisan wrangling and finger pointing is dominating the news. Who knew what, when? The real question is: Is there an impartial one in the bunch?
The best politicians money
can buy
Enron gave lavishly to candidates on the hustings. And one good turn deserves another.
The energy trading transnational prospered from deregulation of the energy industry when George Bush was governor of Texas. In turn, Ken Lay and his corporation gave $2 million to Bush's campaigns for governor and president. Lay even lent Bush his corporate jet. (CNN, Dec. 12)
After his 2000 election, Bush made Lay, then CEO of Enron, his chief energy advisor. With the foxes in charge of the chicken coop, in the winter of 2000-2001 Enron and other energy traders took advantage of recent electricity deregulation in California and forced prices up more than 1,000 percent.
Bush's top economic advisor Lawrence Lindsey was an Enron consultant. Chief White House political advisor Karl Rove owned between $100,000 and $250,000 in Enron stock. And until he was named Republican National Chair last December, Marc Racicot was Enron's Washington lobbyist.
Two of Enron's lobbyists were influential members of the informal kitchen cabinet of Tom DeLay, the majority whip leader of the House Republicans. Wendy Gramm, wife of Sen. Phil Gramm, R-Texas, was a member of Enron's board of directors. (CNN, Dec. 12)
Atty. Gen. John Ashcroft, his chief of staff David Ayres and the U.S. attorney's office in Houston had to withdraw publicly from the Justice Department investigation because of "possible conflict of interest." Between 1999 and 2001, Ashcroft's race for office and political committees received $60,999 in hard and soft contributions from 29 Enron executives, Enron Corp., and the company's political action committee, according to the Center for Public Integrity.
The center, which tracks political campaign contributions, said Enron executives and board members chipped in almost $800,000 to Bush, the national political parties and members of Congress between 1999 and 2001. And in the same time frame Enron forked over $1.9 million in soft-money contributions.
So now the fraud inquiry is under the direction of Dep. Atty. Gen. Larry Thompson. Thompson, it seems, was a lawyer at King & Spaulding. Yes, it represented Enron.
And while three quarters of Enron's $5.8 million in political gives since 1990 went to Republicans, the rest enriched the hope chests of the Democrats. (The Independent, Jan. 13) Tom DeLay's spokesperson Stuart Roy describes Enron as "an equal-opportunity political donor and an equal-opportunity employer, as well, hiring lobbyists who were both Republicans and Democrats and giving money to both sides, including a third of House Democrats and half of the Senate Democrats." (New York Times, Jan. 16)
So forgive the incredulous when they express deep skepticism about what the White House and Congress and the Attorney General's office did or did not try to do to help bail out their munificent friends at Enron.
What capitalism is all about
Sen. Joe Lieberman, a Connecticut Democrat who heads the Senate Governmental Affairs Committee investigating Enron, said recently on CBS's Face the Nation that "the death Enron experienced was not a natural death." After denouncing Enron's alleged skullduggery and fraud, he concluded, "This is not capitalism as we want it to be."
Wake up and smell the overpriced cappuccino. Corruption, graft, fraud--these are the fetid waste products capitalism excretes.
Karl Marx identified the source of that foul stench in the third volume of his germinal work titled succinctly "Capital." As if he were writing today, Marx observed that financial corruption is revealed when the financial bubble bursts. But Marx, unlike Lieberman and his associates in the Loop, could also explain why the bubble bursts, emitting such a stink.
Enron did die a natural death--if you can call "natural" the relentless capitalist competition for mega-profits and people be damned. It was the victim of the world crisis of excess that results when galloping production for profit outraces consumption.
In February 2001, President Bush followed the counsel of his energy advisor Kenneth Lay and refused to place any cap on California's skyrocketing electricity prices. But even that massive handout couldn't save Enron. All the king's horses and all the kingmen either didn't or couldn't save this huge transnational from ultimately failing financially.
The glut in the energy market has driven down prices all over the planet. And as the recession has extended its reach from Japan to Argentina--to Houston--demand for energy has fallen, further affecting prices. Enron wasn't the first and it won't be the last to drown in a sea of abundance.
What does it leave in its wake? Lost jobs, unemployed workers, wiped out dreams of comfortable retirement after a lifetime of work, rolling power outages based on greed, tripled home heating and electric bills.
CEOs can be lawless? That's not a news flash. The real crime is the underlying laws of the capitalist economy.
if you can't help yourself, take time to help those around you
you can read articles on the Enron case in Workers World newspaper, The Nation (http://www.thenation.com), and Granma Internacional (http://www.granma.cu/ingles)...
the following was copied and pasted from the latest issue of Workers World newspaper http://www.workers.org
Enron scandal: The real crime
By Leslie Feinberg
Virtually the entire capitalist political and economic establishment are decrying the captains of Enron as pirates and are ready to throw them overboard. The problem is, the ship has already sunk.
Enron was more of an ocean liner, actually. Just a month before the Houston-based energy colossus took on water like the Titanic and filed for Chapter 11 bankruptcy protection on Dec. 2, it ranked seventh on the Fortune 500 list. The transnational corporation marketed electricity and natural gas, delivered energy and other physical commodities, and--ironically--supplied financial and risk management services to customers around the world.
Since its founding in 1985, Enron's holdings had become a worldwide network, including 25,000 miles of natural gas pipeline in the United States and 8,000 miles more in South America, water treatment plants in Britain, power plants in Italy, Poland, Turkey, Guatemala, Nicaragua, Puerto Rico and the Philippines, a 65-percent stake in a giant power plant in India and much more.
The 40-story new glass skyscraper housing company headquarters towered over Houston. In 1999, Enron agreed to spend $100 million over three decades to put its name on the city's major league ballpark.
But after the company went under, it would have taken more than 15 shares of its stock to buy one hot dog at Enron Field.
Now Enron is infamous for being by far the most enormous bankruptcy this country has yet seen, and its bosses are being denounced far and wide as villains.
Villains they are. Some 4,500 workers are out on the streets. And 11,000 employees watched Enron shares plunge from $90.75 in August 2000 to a close of 26 cents on Nov. 31. Their 401K pension funds--savings from their life's work--were invested in the stock. They saw their retirement funds wiped out.
Company executives refused to let the workers dump the stock as it took a nosedive. But these upper echelons of Enron didn't get hurt in the crash. Company Chair Kenneth Lay gently floated to earth with a golden parachute. He reportedly cashed in $123 million worth of stock options in 2000 and got his hands on another $25 million last year. And only a storm of censure forced Lay to surrender his demand for $60 million in severance pay following Enron's ruin.
Other executives also made out like bandits. Enron handed out more than $100 million in bonuses in November to some 600 top company heads. (CNN.com, Jan. 12)
William Lerach, a lawyer for shareholders suing Enron, charged that 29 top executives and directors of the corporation dumped about $1.1 billion in stock during a period when "they have now admitted they were overstating the reported profits of Enron by $600 million and the stockholder equity of the company by $1.1 billion.
"Let's be direct here," he stressed. "These books were cooked by Lay and the other top executives who put hundreds of millions of dollars in their pockets, while the employees of Enron were victimized and hundreds of other investors lost billions of dollars." (CNN, Jan. 14)
Houston, we have a problem
Now the Enron financial fiasco is really hitting the fan, stirred up by Democrats hoping to create a "Watergate" as a political and investigative undertow against the Bush administration momentum--or at least a "Whitewater."
The particulars certainly are odiferous. A congressional subcommittee released a letter written by Sherron Watkins to Lay last August. Watkins was an Enron vice-president for corporate development.
In the correspondence she warned about the vulnerability of Enron to auditing exposure, in particular regarding three off-the-books subsidiaries reportedly used as fronts to pump up profits that may have enriched Enron executives while camouflaging the parent company's losses. "I am incredibly nervous that we will implode in a wave of accounting scandals," she purportedly wrote.
Now, in retrospect, Watkins is being widely hailed as an icon of business ethics. It's hard to think of those two words connected to each other. Just how much morality is involved in the cutthroat culture of big business is revealed by the widening scope of the Enron scandal.
The Arthur Andersen firm--one of the Big Five monopoly accounting giants--is taking so much flak that it was forced on Jan. 15 to fire its partner in charge of the Enron audit. The partner, David Duncan, had ordered auditors to shred Enron's electronic and paper accounting documents on Oct. 23, the day after the energy corporation disclosed that the Securities and Exchange Commission had begun an inquiry. This bombshell information, now headlines in all the media, was revealed in the Jan. 13 issue of Time magazine.
The move to fire Duncan, notes the Jan. 16 Wall Street Journal, "was seen as an effort by Andersen to isolate the Enron affair to its Houston office and shield itself from more serious charges. New evidence emerged that Anderson's Chicago headquarters knew details about controversial Enron financial arrangements that contributed to the energy company's downfall."
The order to hurriedly wipe out the email and paper trail was issued just four days before Enron made its first public disclosure about its financial problems, a staggering $618 million loss for last year's third quarter.
Thousands of e-mails and other electronic and paper trails reportedly vanished, lost to investigators and former employees hoping to sue to recover part of their lost retirement savings. There are currently some 47 class actions against Enron, its executives and directors filed by shareholders and employees.
Sherron Watkins, by the way--like many other Enron executives, including its treasurer and general counsel--came to Enron after working at Arthur Anderson. (New York Times, Jan. 16)
The law firm of Vinson & Elkins is also being hit with shrapnel in the blowup surrounding its client Enron. The prestigious law firm, with an army of 860 attorneys and nine offices worldwide, ranks as one of the 25 largest in the United States.
Vinson & Elkins, says the Jan. 16 New York Times, "is often described much like its client: hugely powerful, international in scope and rich with connections from the statehouse to the White House." The firm showed great generosity in its contributions to the 2000 Bush run for the Oval Office: almost half its 341 partners doled out for W. (Wall Street Journal, Jan. 16).
Enron reportedly asked the firm to look into the issues Watkins raised in her letter to Lay. In a nine-page response dated Oct. 15, Vinson & Elkins attorneys concluded that Enron's efforts to keep debt off its books was "creative and aggressive," but that the energy conglomerate had done nothing wrong. But within weeks, Enron had to divulge that improper accounting--much of it revolving around its secret partnerships--had resulted in overstating its earnings by almost $600 million over five years. (New York Times, Jan. 16)
All these exposures are being generated directly or indirectly by six Senate committees, two House committees and the Securities and Exchange Commission--all of which are investigating different facets of the economic disaster--and a criminal inquiry by the Justice Department.
Partisan wrangling and finger pointing is dominating the news. Who knew what, when? The real question is: Is there an impartial one in the bunch?
The best politicians money
can buy
Enron gave lavishly to candidates on the hustings. And one good turn deserves another.
The energy trading transnational prospered from deregulation of the energy industry when George Bush was governor of Texas. In turn, Ken Lay and his corporation gave $2 million to Bush's campaigns for governor and president. Lay even lent Bush his corporate jet. (CNN, Dec. 12)
After his 2000 election, Bush made Lay, then CEO of Enron, his chief energy advisor. With the foxes in charge of the chicken coop, in the winter of 2000-2001 Enron and other energy traders took advantage of recent electricity deregulation in California and forced prices up more than 1,000 percent.
Bush's top economic advisor Lawrence Lindsey was an Enron consultant. Chief White House political advisor Karl Rove owned between $100,000 and $250,000 in Enron stock. And until he was named Republican National Chair last December, Marc Racicot was Enron's Washington lobbyist.
Two of Enron's lobbyists were influential members of the informal kitchen cabinet of Tom DeLay, the majority whip leader of the House Republicans. Wendy Gramm, wife of Sen. Phil Gramm, R-Texas, was a member of Enron's board of directors. (CNN, Dec. 12)
Atty. Gen. John Ashcroft, his chief of staff David Ayres and the U.S. attorney's office in Houston had to withdraw publicly from the Justice Department investigation because of "possible conflict of interest." Between 1999 and 2001, Ashcroft's race for office and political committees received $60,999 in hard and soft contributions from 29 Enron executives, Enron Corp., and the company's political action committee, according to the Center for Public Integrity.
The center, which tracks political campaign contributions, said Enron executives and board members chipped in almost $800,000 to Bush, the national political parties and members of Congress between 1999 and 2001. And in the same time frame Enron forked over $1.9 million in soft-money contributions.
So now the fraud inquiry is under the direction of Dep. Atty. Gen. Larry Thompson. Thompson, it seems, was a lawyer at King & Spaulding. Yes, it represented Enron.
And while three quarters of Enron's $5.8 million in political gives since 1990 went to Republicans, the rest enriched the hope chests of the Democrats. (The Independent, Jan. 13) Tom DeLay's spokesperson Stuart Roy describes Enron as "an equal-opportunity political donor and an equal-opportunity employer, as well, hiring lobbyists who were both Republicans and Democrats and giving money to both sides, including a third of House Democrats and half of the Senate Democrats." (New York Times, Jan. 16)
So forgive the incredulous when they express deep skepticism about what the White House and Congress and the Attorney General's office did or did not try to do to help bail out their munificent friends at Enron.
What capitalism is all about
Sen. Joe Lieberman, a Connecticut Democrat who heads the Senate Governmental Affairs Committee investigating Enron, said recently on CBS's Face the Nation that "the death Enron experienced was not a natural death." After denouncing Enron's alleged skullduggery and fraud, he concluded, "This is not capitalism as we want it to be."
Wake up and smell the overpriced cappuccino. Corruption, graft, fraud--these are the fetid waste products capitalism excretes.
Karl Marx identified the source of that foul stench in the third volume of his germinal work titled succinctly "Capital." As if he were writing today, Marx observed that financial corruption is revealed when the financial bubble bursts. But Marx, unlike Lieberman and his associates in the Loop, could also explain why the bubble bursts, emitting such a stink.
Enron did die a natural death--if you can call "natural" the relentless capitalist competition for mega-profits and people be damned. It was the victim of the world crisis of excess that results when galloping production for profit outraces consumption.
In February 2001, President Bush followed the counsel of his energy advisor Kenneth Lay and refused to place any cap on California's skyrocketing electricity prices. But even that massive handout couldn't save Enron. All the king's horses and all the kingmen either didn't or couldn't save this huge transnational from ultimately failing financially.
The glut in the energy market has driven down prices all over the planet. And as the recession has extended its reach from Japan to Argentina--to Houston--demand for energy has fallen, further affecting prices. Enron wasn't the first and it won't be the last to drown in a sea of abundance.
What does it leave in its wake? Lost jobs, unemployed workers, wiped out dreams of comfortable retirement after a lifetime of work, rolling power outages based on greed, tripled home heating and electric bills.
CEOs can be lawless? That's not a news flash. The real crime is the underlying laws of the capitalist economy.
if you can't help yourself, take time to help those around you