Enron-A Failure of Ethics
The Denver Post
January 28, 2002

Liars, cheats and thieves populate the lore of the West. From mining camps to the oil patch, frontier stories are full of claim jumpers, barroom brawls and summary justice. We thought we'd moved beyond such skullduggery, but now, along comes Enron.

There is much we still don't know about the Enron debacle. What we do know is textbook sleaze. Put aside for a moment what might have been legal or illegal. There is a more vital issue here-ethics.

Buying influence is no stranger to politics. To its credit, the Bush Administration was unresponsive to Enron's death throe pleas for help, despite the company's huge contributions to the Bush campaign. While there's much talk about the Administration's assistance to Enron in India, that is what our government should, and does, do for American companies overseas. So, let's focus on the real questions of Enron's undue influence.

There are at least two of these. The first is the rapid deregulation of its energy trading activities that Enron pressed for and won. Second is the Administration's energy plan, put together by Vice President Cheney behind closed doors.

The deregulation occurred during the Clinton presidency and was overseen by Wendy Gramm (wife of Senator Phil Gramm of Texas), who now serves on Enron's board of directors. While energy deregulation has earned a bad name, it remains to be seen whether it is really a bad idea or whether the deceit of companies like Enron is the actual culprit. Nonetheless, when there is the appearance of influence peddling in such a colossal failure, the public rightfully demands accountability.

The political influence surrounding the development of the Bush energy plan is another matter. So far, Vice President Cheney has hidden behind "executive privilege" to cover his tracks. That isn't going to fly with the public and shouldn't be acceptable to Congress. If, in fact, the deliberations, which included Enron and other energy companies, were aboveboard, the Administration shouldn't balk at disclosing its collaborators and the content of their discussions.

Energy is becoming an ever more critical issue to Americans. There's a big divide between the oil and gas industry and the environmental community over what to do. The public has a right to know if undue influence, based on political contributions and friendships, skewed the Bush energy proposal towards oil and gas drilling over other options. Cheney needs to come clean. That's the ethical, and the politically smart, thing to do.

When it comes to business ethics, Enron's behavior is sordid. Corporate executives telling employees that all was well while shedding their shares as the market collapsed. CEO Ken Lay raking in millions "to make other investments," as his lawyer justified Lay's windfall, while ordinary employees couldn't sell company-contributed shares. You'd better believe Enron employees wanted other investments in their retirement portfolios as they watched their nest eggs crumble. Even worse, Lay kept telling employees the company was doing well when one must assume he knew exactly how precarious its finances were.

Meanwhile, the corporate watchdogs of Arthur Anderson, the people Enron's shareholders relied on to talk straight about their company, were busy helping executives hide financial problems. When the fire got hot, they resorted to shredding documents that might be damaging. So much for ethical behavior.

Just like the old West, it looks like liars, cheats and thieves stalked the halls of Enron. While we are thankfully past the days of summary justice, Congress, the Justice Department and the Securities and Exchange Commission need to move rapidly to determine if fraud and chicanery played a role in Enron's collapse and to enforce both legal and ethical accountability.

Even if the financial geniuses of Enron and the accounting wizards of Arthur Andersen did nothing illegal, as they so piously claim, they clearly behaved unethically. Perhaps, like members of Congress scrambling to prove Enron's money didn't influence them, they would like to even the score by giving employees a chunk of the fortunes they gained as Enron burned. That would be the ethical, and the politically smart, thing to do.

Web Design by Core Interactive