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View Diary: Thoughts on the Enron decision from an ex-Andersen guy (240 comments)

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  •  Having been through a similar situation myself (2+ / 0-)
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    tamens, clammyc

    years ago, I can sympathize with you and your wife and fellow employees. Except, in my case, it turned out relatively well for me and my fellow employees, although the situation was much the same.

    Back in the early 90's, I worked for a large and very well known trading house and investment bank, one that had played a very prominent role in the massive resurgence of the financial markets in the 80's (it was even rumored that the Gordon Gekko character in the Oliver Stone film Wall Street was based on one of the top traders there). (And as an interesting aside, we did a lot of business with Andersen back then, especially in IT, where I worked.)

    Then one day a story broke that a top trader at the firm had tried to corner the market on Treasury bonds, notes and bills, by exceeding SEC rules that prohibited any one firm from holding more than a certain share of any one set of Treasury issues (I think the limit was around 30%).

    He did this through shadow proxy trading firms (shades of Enron misdeeds a decade later), in some cases holding virtually 100% of a given issue. It also turned out that the top people at the firm knew about this and, even though it wasn't necessarily their idea, allowed it to continue on a "don't ask, don't tell" basis.

    Once it emerged that all of this was almost certainly true and that it could end up ruining the firm and putting all of its employees out of a job, it pretty much dominated everything else going on there. Work continued, but everyone worried about their jobs and futures. The government was clearly furious and out for blood, and understandably so.

    However, the firm happened to have as its largest stock holder a man with a stellar reputation for being honest, principled and ethical in his business dealings, who also happened to be one of the world's richest men (a position he constantly exchanged with Bill Gates and the Sultan of Brunei), Warren Buffet.

    He stepped into the fray and negotiated a deal with the government in which the firm paid a then-record $650 million fine, fired the trader responsible for the illegal trading and the top three men running the firm, instituted a broad internal investigation of its trading practices, and put him and another top executive not tainted by or involved in this scandal in charge of the firm.

    The firm survived, humbled, humiliated and poorer, and no longer the powerhouse it had once been. Several years later (after I'd left the firm), it was acquired by another firm, and eventually became a part of the huge CitiGroup empire. But it did survive this scandal, which at the time was HUGE.

    And the reason, I believe, was because, unlike the Enron situation, responsible and principled people in the business world and government did the right thing, saving a firm in which 99.99% of the employees had nothing to do with a terrible scandal, rather than taking the easy way out and putting it out of business in order to score points with the public.

    My how times have changed. Another Bush was president then, but a very, very different Bush. I'm not trying to make Bush, Sr. out to have been a great president. I wasn't keen on him and voted for Clinton, and felt that he deserved to lose office. But on this matter, I think he did the right thing, and thousands of people were very thankful for that.

    Now we have Bush, Jr., a pale, all but invisible shadow of his father, and an entire culture of corruption that extends way beyond government to the mainstream business world--which, of course, is ultimately the source of government corruption--and instead of responsible governance--or even an attempt at it--we have quick and easy solutions that benefit a handful of crooks and miscreants over the interests of millions.

    We need to kick the bums out. Plain and simple. All of them, Democrat and Republican. Corrupt, dishonest and incompetent politicians (and their counterparts in the business world) need to be out on the street if not in jail, regardless of party. And the country needs to get back to serving the interests and needs of the overwhelming majority, not a tiny minority.

    "Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it's the only thing that ever has." Margaret Mead

    by kovie on Thu May 25, 2006 at 01:25:01 PM PDT

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