Well it was an hour and fifty minutes of major successes, fake profits, energy shortages, and fraud. I didn’t watch the movie with anyone else (except Kate, but I don’t think she can quite grasp that sort of thing yet) and after the movie was over I just felt dirty. The stories of the electricity lineman that pumped all their extra money into their 401K’s and then lost it all was just sickening and sad. Especially when the corrupt executives made off with millions, and in some cases hundreds of millions! If you count all the employees of Enron and then the employees of Arthur Andersen (the accounting firm that shredded all the accounting information, they went under too) you are talking about 50,000 people out of jobs. One person interviewed said that at the height of Enron they had $384,000 in their 401K only to sell it off for $1,200 bucks after they allowed employees access to their accounts. Worse, the executives were able to move their monies WAY before everyone else, even though accounts were locked for all employees.
Another thing that bothered me is the ethical nature of these businessmen. Andy Fastow (ex-CFO) seems like the type of guy that would do anything to make himself more money. He created fake companies to funnel money through and utilized Jeffrey Skillings accounting strategies to flow billions through the company and into their pocketbooks. This guy truly disgusts me because even though he was the ‘man behind the curtain’ and probably had more responsiblility than anyone else, he still got a lighter sentence due to a plea bargain he reached. He is now going to sell out the executives he was working with.
The major reason they were able to still showing profits during their quarterly earnings reports, despite their huge losses/expenses, was due to a term called ‘mark-to-market’. This allows executives to post ‘projected’ earnings for a particular investment today even though they have no way of ensuring the projection will be met in the future.
What’s interesting about this story is all the major players of the story Ken Lay, Jeffrey Skilling, and Andrew Fastow definitely had involvement in the scandal but I think the corruption was much bigger than just those three. I believe it filtered down and out to the employed traders/analysts of Enron to the companies Enron partnered with. Everyone was focused on one thing: money.
It continues to make me appreciate the family business we run. Despite the stresses of ‘making payroll/ensuring employee happiness’ it is still great to know that we have highly ethical people working with us. And once again, I am so happy we’re small.
If interested, check here for the full history of facts.
Technorati Tags: Enron, Kenneth Lay, Jeffrey Skilling, Andrew Fastow, corruption, money, corporate scandal, fraud
