The big news last week, with the exception of a report of shots fired at the U.S. Capitol, was the verdicts in the trial of the two former heads of Enron.
The shots that somebody thought they heard turned out to be construction noise (for a change, somebody in a congressional building was sporting wood non-euphemistically), but the Enron story will have lasting effects in many ways.
Kenneth Lay and Jeffrey Skilling, who guided Enron to false new heights that culminated in a colossal plunge that was disastrous for employees and investors, were both found guilty on multiple charges. In September, it is expected they will be sentenced to one of the longest board meetings in history.
The world shuddered after energy giant Enron filed Chapter 11. At first, everybody was a little like Rick Hilton seeing Paris and Nicky’s unopened American Express bill on the counter – we knew it was going to be bad, we just didn’t know how bad.
The bankruptcy announcement essentially meant investors had lost a fortune virtually overnight. For many employees, their life savings, retirement plans and college funds were gone. Their money had been used as pawns in a white-collar chess game.
This scam caused the government to jump in and do what it does best: complicate matters. Whenever there is a massive crime, the government will respond in kind with massive laws.
The U.S. government responded to Enron and some other corporate scandals by passing laws such as Sarbanes-Oxley. For lawyers, salivation lies within. Sarbanes-Oxley is a fine example of the many being forced to pay for the crimes of a few.
Laws are a boon to lawyers, and since the federal government is comprised of a throng of attorneys (and I think three other guys who couldn’t pass the Bar), passing laws comes naturally. Lay and Skilling are guilty of collusion, and that wrongdoing was addressed by the many lawyers in Congress via the passing of laws that will further enrich attorneys? Sounds to me like they should all be sharing a cell for the same crime.
I remember a day when we envisioned an automated, computerized world and often spoke of a ”paperless society” (with the obvious exception of toilet tissue and Willie Nelson’s Zig Zags). Environmentalists were giddy, for trees were going to be spared from ending up as ExxonMobil’s quarterly report or a widget invoice. Well, one of the first paperless-society experiments was Enron, so we can safely assume that from now on we’ll be buried in more paper than ever. Frankly I’m surprised shredders haven’t yet been outlawed.
There are optimists in these situations, however. Is anybody saying “thank you” to Ken Lay and Jeffrey Skilling? Not many, but perhaps a few. A financial disaster for many can lead to good things for certain folks. Take dollar stores for example. Perhaps they owe a debt of gratitude to people like Lay and Skilling for creating thousands of people incapable of affording higher-end goods.
Tens of thousands of people losing their life savings overnight have also been welcome news for the Ramen Noodle company. There’s only so long you can support an entire company by feeding college students.
Credit card companies must have been swimming in their own glee as well. No cash for people meant credit card companies were going to be turning out more plastic than a Malibu cosmetic surgeon, and making loans at interest rates that would make the Mafia call them greedy.
Topping the “happy about Enron” list is the nearly redundantly titled “government lawyers,” who, upon leaving a job they often refer to nobly as “public service” (prostitutes are in “public service” as well), will clean up financially on all the laws they passed so we’re never again exposed to undesirables like Lay and Skilling.
For the rest of us, all our lives have been altered in some way. If you’re in business, you’re jumping through hoops and suffering through the forced creation of all sorts of make-work government-induced reports, audits and other financial burdens. If you’re a consumer, congratulations, the cost of all the extra legal bills taken on by companies who have to hire more lawyers to ensure they’re up to speed with the new government laws has been passed on to you.
It may be ending for Lay and Skilling, but for the rest of us, it’s only the beginning. Be prepared, because the government’s idea of ensuring the fox never again raids the chicken coop is to kill the chickens.
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