Cowlix Wearing my mind on my sleeve

Enron Archives
Wednesday, February 27, 2002 Permanent link to this day
Economics 101

Enronomics explained: "You have two cows..." [via fortboise]

Thursday, February 21, 2002 Permanent link to this day
The Bush-Lay Letters

The Smoking Gun has a collection of letters exchanged between Ken Lay and George W. Bush during his term as Governor of Texas. [via Moon Farmer]

Friday, February 15, 2002 Permanent link to this day
Bush learned from Harding?

The Company Presidency: Kevin Phillips compares the Enron saga to the Teapot Dome scandal of the Harding administration.

Both Teapot and Enron involved energy policy, privatization and corruption. And like Teapot Dome's "Ohio gang" of ethically loose Harding cronies, oilmen and administration officials--energy deregulation during the first Bush administration, through the Clinton years and George W.'s time as governor of Texas on up till today has been warped and feasted upon by a Texas-led "Enron gang." In both scandals, some Democrats were involved, but the power centers of misbehavior were Republican. Yet, there has been nothing quite like the rise and fall of Enron in U.S. history, certainly no plausible comparison since the late-19th-century heyday of railroads and robber barons. The sums in Enron's collapse certainly overshadow those in Teapot, much as a space shuttle does a Model T Ford. More important, not in memory has a single major company grown so big in tandem with a presidential dynasty and a corrupted political system. Indeed, the Bush family has been a prominent and well-rewarded rung in Enron's climb to national political influence.

[via Cursor]

Thursday, February 14, 2002 Permanent link to this day
Enron's open secrets

Enron at who got how much cash when. [thanks Cass]

Wednesday, February 13, 2002 Permanent link to this day
Setting an example

America's crony capitalism

Why is this more than just a very big business failure? Because the US markets, and the array of institutions that constitute them, are supposed to be a model. When the Asian crisis hit, crony capitalism took much of the blame. The definition of sound policies was broadened to include a call for countries to put into place strong market infrastructure, including more rigorous accounting standards, better regulation, stricter disclosure and stronger corporate governance. As the international community struggled to define this new consensus, it was often to US examples that it turned, albeit grudgingly. And where there were big differences, those of us representing the US were typically reluctant to cede the case. This is harder to justify now.

Saturday, February 09, 2002 Permanent link to this day
Enron, the Cliff Notes

A Guide to the Enron Collapse: A Few Points for a Clearer Understanding [via wood s lot]

Monday, February 04, 2002 Permanent link to this day
No Senate testimony from Lay

In a letter from his attorney, Kenneth Lay has backed out of today's planned testimony before the Senate Commerce Committee, saying that he cannot testify in a forum where conclusions had already been reached. The hearing has been, at least for now, cancelled and the committee has said they intend to subpoena Lay.

Sunday, February 03, 2002 Permanent link to this day
Internal Enron report

An investigative committee of Enron's board has released its report on the breakdown of controls and ethics in the company.

Our investigation identified significant problems beyond those Enron has already disclosed. Enron employees involved in the partnerships were enriched, in the aggregate, by tens of millions of dollars they should never have received -- Fastow by at least $30 million, Kopper by at least $10 million, two others by $1 million each, and still two more by amounts we believe were at least in the hundreds of thousands of dollars. We have seen no evidence that any of these employees, except Fastow, obtained the permission required by Enron's Code of Conduct of Business Affairs to own interests in the partnerships. Moreover, the extent of Fastow's ownership and financial windfall was inconsistent with his representations to Enron's Board of Directors.

This personal enrichment of Enron employees, however, was merely one aspect of a deeper and more serious problem. These partnerships -- Chewco, LJM1, and LJM2 -- were used by Enron Management to enter into transactions that it could not, or would not, do with unrelated commercial entities. Many of the most significant transactions apparently were designed to accomplish favorable financial statement results, not to achieve bona fide economic objectives or to transfer risk. Some transactions were designed so that, had they followed applicable accounting rules, Enron could have kept assets and liabilities (especially debt) off of its balance sheet; but the transactions did not follow those rules.

The report is a 9 meg PDF. Here are some summaries:

Thursday, January 31, 2002 Permanent link to this day
Enron fallout in the U.K.

Enron-related questions are not just being asked in the U.S. There are questions being asked about how Andersen got back in the good graces of the British government after the DeLorean collapse in 1997. Andersen is defending itself, saying the size of it's new contract was won fairly and is small in comparison to almost everything else.

Wednesday, January 30, 2002 Permanent link to this day
The Real Enron Scandal

The New Republic's editors write that the problem is not that the government did anything to help stop Enron's collapse, it's that measures that could have lessened or prevented the damage from the collapse were blocked.

Sunday, January 27, 2002 Permanent link to this day
Florida Power

The Enron Scandal Grazes Another Bush in Florida: on questions starting to be asked by Jeb's involvement with Enron.

"You've got to credit Jeb Bush," said Richard Scher, professor of political science at the University of Florida at Gainesville. "He's been wonderful in keeping the issue quiet. Nothing has been coming out. He's been very shrewd in how he's handled it politically and lucky the legislature is in session and drawing attention away. The Enron Florida angle has not come home to roost yet."

Jeb is one of the trustee's of Florida's pension fund, a large victim of the Enron collapse with $325 million in losses, though a fund respresentative has said Bush is only involved at a high level and never dealt with specifics of individual investments. He also chose to have a fundraising event at the Houston home of a former Enron president, Richard Kinder, last week. To be fair, Kinder left Enron in 1996 to form another major energy company, Kinder Morgan.

Whose? Florida is tracking the connections between Florida's pension fund and Enron.

Saturday, January 26, 2002 Permanent link to this day
What does Enron do?

Enron for Dummies

I saw this week that President Bush is `outraged' by the Enron scandal, and I know I should be too, but there's a lot I still don't get. For starters, what kind of company is Enron, exactly?

Enron is a new-economy company, a thinking-outside-the-box, paradigm-shifting, market-making company. In fact, it ranked as the most innovative company in America four years in a row, as judged by envious corporate peers in the annual Fortune magazine poll. It is also, at this point in time, a bankrupt company.

I meant, what does Enron do?

Friday, January 25, 2002 Permanent link to this day
Verbing Enron

Enron has been verbed. Tom Daschle, speaking on the future of Social Security and Medicare, said, "I don't want to Enron the American people. I don't want to see them holding the bag at the end of the day just like Enron employees have held the bag." [via Unknown News]

Exempting Enron

Exemption Won in 1997 Set Stage for Enron Woes: on an broad exemption to the Investment Company Act which allowed Enron to setup the numerous foreign affiliated companies which have played a part in muddying their finances.

Enron's initial efforts in 1996 to persuade Congress to change the law were thwarted by opposition from a powerful trade group and some federal regulators. The company responded by hiring the former boss of a leading staff official at the Securities and Exchange Commission to represent it in negotiations with the agency. In an unheralded five-paragraph order in March 1997, the S.E.C. official, Barry P. Barbash, gave Enron's foreign operations a broad exemption from the law -- the Investment Company Act of 1940.

Enron Hearing Transcript

The transcript of yesterday's hearing on Enron is available.

Thursday, January 24, 2002 Permanent link to this day
Enron roundup

The first Congressional hearings into the Enron collapse begin today. The star witness today, an Arthur Andersen employee who has since been fired and who has been accused of directing shredding of Enron documents, is expected to take the fifth in front of the House Committee on Energy and Commerce.

Enron's rise and fall, the timeline. [via abuddhas memes]

Smoking Gun in Enrongate: on charges Bush allowed Ken Lay, the ex-CEO of Enron, to interview candidates for the Federal Energy Regulatory Commission. [via Metafilter]

Findlaw has a collection of original source documents on Enron. [via wood s lot]

Wednesday, January 23, 2002 Permanent link to this day
Enron and Florida's pension fund

State's late Enron buys questioned

A New York firm that bought Enron stock for Florida's pension fund is being investigated for possible conflict of interest because it allowed an executive to sit on the failed energy-trading company's board.

State officials said Thursday that they did not learn until late last year that Frank Savage, a top executive of Alliance Capital Management Corp., was a member of the Enron board.

The state lost more than $300 million in the collapse of Enron. [via Red Rock Eater]

Friday, November 30, 2001 Permanent link to this day
Enron heading down

Enron is headed for bankruptcy after credit downgrades and a merger collapse. The 100,000 trades on the energy markets that will need to be undone is just one of the ripple effects the collapse will have. There are a large number of companies with more than $100 million of exposure to Enron.

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Copyright © 2001-2002 by Wes Cowley