The Liberal Patriot

Enron- a Testament to Greed - J.G. Schwam

J.G. Schwam - January 15, 2001

Enron was the Texas oilman's dreams come true. A vehicle by which

energy purchasers such as power companies and local natural gas and

oil distributors can buy electricity and oil and gas products weeks or

months in advance of their delivery. Cash in pocket before your

customer even gets the goods. But as it turns out Enron is not

much more than an out and out testament to greed. Enron's

management chose to enrich themselves excessively to an extent

yet to be entirely disclosed.

It is obvious now they must have had some knowledge that their

vast energy trading bubble was nearing collapse. There is evidence

that both CEO Kenneth J. Lay and CFO Andrew S. Fastow had large

stock sales shortly before the collapse while at the same time

prohibiting employees whose retirement funds were nearly entirely

vested in Enron stock. Those portfolios of hard working employees

are now nearly worthless.

A couple, both of whom worked at Enron for a great many years

submitted their retirement request shortly before the collapse. They

expected to comfortably retire after many years of hard work with

a stock portfolio of nearly $900,000.00, mostly in Enron stock.

Today that same portfolio is barely worth $200,000.00. These

employees where prohibited from selling stock while all the while

Fastow, Lay and others were selling stock and/or paying

themselves bonuses worth up to 55 million dollars. You have to

really be greedy and pretty stupid to run a 75 billion-dollar oil and

gas company into the ground. Mr. Fastow appears to be so

arrogant, so scared or so unapprised the facts of financial and

accounting decisions by his staff as to fail to appear for a SEC

subpoena to provide answers to their questions.

These questions include evidence found in statements made by the

accounting firm of Arthur Andersen that a so called special purpose

entity withheld from the auditors contributed to a 586 million dollar

loss. They also withheld information about another special purpose

entity called Chewco investments that has existed at least since

1997. Arthur Andersen auditors stated that had they known about

Chewco the accounting would have been different and this would

have drastically changed their reported profits. So where are all of

the billions of dollars? There is not yet any data disclosed on

another special-purpose entity LJM Cayman. Sounds like an offshore

bank or shell company to me? We can only wait and see.

Nearly everyone in the country gets the shaft from theses guys.

The prices and deliverability of the oil, gas and electricity traded by

Enron with local utilities now comes into question.

Enron leveraged it's own natural gas, electricity and gasoline assets

and those of hundreds of others by trading and manipulating the

value of those assets based on availability and demand. Basically

there is nothing wrong with this. It is done legally and ethically on

many commodity exchanges around the world. A public company is

regulated by the SEC but not in the same way as an exchange is.

This gives the managers relative free reign to structure their

quarterly financial statements to the SEC in any way they want

within "generally accepted accounting standards". All company's

financial statements must be "certified" by a certified public

accountant. But if they withhold records as they have from their

auditors, the specter of criminality rises up. If you have nothing to

hide why withhold any "smoking" documents. Would Enron's shady

deals ever have surfaced if they were so shady that they would

ultimately crash and burn up dozens of billions of dollars? We may

never know. But I suspect that the SEC will not be messed with,

they will get the answers.

As we all know by now, despite what the right wing mouthpieces

are telling us, the oil industry dictates energy policy in the Bush

administration. This is very much like letting the fox dictate policy

for the egg industry. The chickens are going to take it on the chin.

Folk's we are the chickens in this case.

Electricity prices have steadily climbed in the last 3-4 years. I don't

care where you live, am I wrong? Is your electric bill dramatically

higher than it was? All the while we keep hearing about gobs of

cheap oil, gas and coal in the market. What is going on here? It

seems that Enron has created a market for manipulation of a critical

resource. If this trading operation is supposed to operate as a

legitimate commodity exchange of sorts then why doesn't it? You

don't see rampant fluctuations in the orange juice or coffee futures

when the basic resource (coal, gas and oil) is cheap and stable.

What's the deal here? I say its greed run wild, greed at the expense

to a huge extreme of the people and government of California and

all of us.

J. Robinson West wrote in the Washington post that it is a popular

myth that the oil industry controls the energy policy of the Bush

administration. He states that facts do not bear this out but offers

no facts to justify this statement. If this is true then why does the

administration refuse to disclose details of their recent energy

policy meeting with industry big wigs which included Enron. Did

those big wigs know at that point that they were heading for a fall

as a result of their shady greed driven practices? Is this why they

will not disclose the contents of their discussions?

The SEC and Congress if necessary is duty bound to investigate

and prosecute the irresponsible greedy executives who may in fact

be found to have lied, manipulated, cheated and stole from their

employees and all Americans both rich and poor.

So what does all of this have to do with Bush and his administration

of big business cronies? Kenneth J. Lay and Enron are one of his

biggest campaign financiers and part of that Texas oilman's good

old boy network. Do you think Bush senior owned any Enron stock?

Did he sell it recently? There are lot's skeletons in them thar'

closets. They need to be smoked out.

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