Crossposted at Truth & Progress
Things are finally straight at the 'Crooked E'; straight, but still not quite whole, for thousands of former Enron and Andersen employees. This, of course, didn't stop the rejoicing by many former employees:
"Skilling and Lay thought the money, the power was everything," said Johnson. "This will let executives at other corporations know that it can happen to them. This is a milestone. And it's well deserved. We waited long enough. I'm smiling as I talk to you. I wish I'd been able to be there."
Memories of rolling blackouts for many Californians are just a little brighter and I think I just heard angels singing for that brave take-no-prisoners accountant and whistleblower Sherron Watkins. Kenneth Lay and Jeffrey Skilling were convicted today on conspiracy to commit securities and wire fraud and it's looking like these twisted titans turned felons are going to be in jail for a very long time.
Jurors declared through their verdict that both men repeatedly lied to cover a vast web of unsustainable accounting tricks and failing ventures that shoved Enron into bankruptcy protection in December 2001.
Justice and a cautionary tale for unscrupulous executives and employees with their eggs all in one basket.
Incidentally, the documentary, "Enron: Smartest Guys in the Room" recounted the role these men and their $33 billion dollar conglomerate played in the California energy crisis. The title of the film (and this post) is a play off of a real quote that highlights their arrogant self-perception. It should not be forgotten either that Ken Lay, known as "Kenny Boy" to President Bush, was one of the most generous GOP donors. This scandal and resulting historical bankruptcy, swallowed up over 20,000 jobs, looted many more pension plans, and stole countless futures. And if that doesn't make you angry enough, this is how California ended up with Arnold Swartzenegger.
This short film, which is still in video stores, does a fine job of explaining the intricacies of trading energy, weather derivatives, and anything that could be commoditized (even pornography), Lay and Shilling finally settled in on a formula for manipulating the power grid while inflating income to cover-up massive screw-ups this is no simple bedtime story. Even after 20 years in the field of accounting, and having more than a pedestrian understanding of energy markets, I still can't fathom how their unique brand of accounting, something affectionately called "Mark to Market", passed the sniff test with anyone with a conscience. But it did. And it sent some employees of Andersen (Enron's $50 million dollar per year accounting firm) running for the shredders. These actions however, initiated by a tiny fraction of these major American work forces, cut such a painful swath through the fabric of our American community. And it's precisely this fact that I hope the perpetrators reflect upon from their cold cells in Alcatraz.
Beyond the 'how tos' of the off-balance-sheet brain-cramp-inducing lying, cheating and obfuscation is what I believe is the more important story about human nature: Greed. Hubris. Energy. Power. Politics. Control.
We just can't seem to help ourselves.