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Tuesday, 19 March, 2002, 11:15 GMT
Enron affair: What are the implications?
Arthur Andersen, the US accountancy firm at the centre of the Enron bankruptcy scandal, has been indicted by a Federal grand jury on the charge of obstruction of justice.

The indictment says that the company tried to undermine the justice system by destroying tons of paperwork and tried to purge electronic data in order to avoid an investigation into Enron's collapse.

It alleges that senior Anderson officials told its employees to destroy thousands of documents across the world within days of notice that the company would be investigated by the SEC.

"There is a serious matter which undermines the criminal justice system," said Department of Justice deputy Attorney General Larry Thompson.

The firm's executives could face fines of up to $500,000 and prison terms if convicted.

What is your reaction to the latest allegations emerging from the Enron scandal? What are the possible implications?

This debate is now closed. Read a selection of your comments below.

Your reaction

The Enron/Anderson fiasco is a huge embarrassment to honest, hard working, Americans. Those of us who have lost money in the stock market wonder, "who is in control?" (We did not own Enron, but we wonder what the value of other investments will be.) The first step in dealing with this mess is campaign finance reform in the highest degree. Enron bought incredible support from the powers that be. The biggest losers are the little people. This is a democracy?
Marie Ennis, USA

In a capitalist system, an inefficient money losing company is supposed to go out of business. Enron's competitors are surely reaping the benefits of Enron's ineptitude. Some crimes may have been committed in the process, which should be investigated, but the bottom line is that Enron would be bankrupt even if it had followed the letter of the law.
Joe, USA

The shareholders elect the directors. The directors appoint the auditors. The auditors report to the shareholders. That's the theory but too often it doesn't work. The shareholders get conned and the auditors/accountants massage the figures because otherwise they won't get the work next time. What's to be done? The shareholders, in the shape of pension funds and insurance companies, need to do some hard thinking about how to improve/reform the system before governments step in and make an even bigger pig's ear of it all.
Colin Hart, UK

I think that this will remind a lot of large multi-billion dollar corporations that it doesn't matter how established and powerful you are, you aren't anything without customers

Ali Bushell, UK
I think that this will remind a lot of large multi-billion dollar corporations that it doesn't matter how established and powerful you are, you aren't anything without customers. Maybe this will shut up a few of the free market economics crusaders that are always saying how the state has now right to be involved in business and that pure capitalism is the most perfect social system - events like this show that simply isn't true when you factor in common greed and dishonesty.
Ali Bushell, UK

Danny: It is not about the big five. We are governed by accounting standards. There needs to be a radical rethink of these, a process already being undertaken.
Phil, Essex, England

Andersen's impending indictment will lead to a richly deserved exodus of clients. But former Andersen's clients should beware. How can they be assured that alternative firms of Public Accountants will show the professional diligence due to their clients and other stakeholders? There may be a case for putting statutory audits under the umbrella of a Government organisation, as the temptation to cut corners and take a roseate view of management in return for an assured fee will prove too great for many of Andersen's competitors. Representations
Peter Sykes, England

It's about time these Accountancy firms were pulled up. They have been hiding behind a cloak of secrecy for too long. Small time investors, and I may add employees of companies like Enron, have lost their life savings. Whatever the outcome we only hope that some of these individuals now recoup their losses. This latest development will also go a long way in changing the behaviour of the big 4 Accountancy firms and bring about more stringent regulation in the way these firms operate.
Arif Sayed, Dubai, UAE

How can the regulators stop directors of businesses acting criminally and that ultimately bring their businesses down?

Peter Bricknell, UK
The unfolding events with Enron and Andersen still leave one big question behind. How can the regulators stop directors of businesses acting criminally and that ultimately bring their businesses down? The indictment by the Department of Justice on Andersen won't do anything to stop this Moving from the big five to the Fat Four doesn't change anything with Directors actions. Splitting consulting and auditing doesn't change it either. So do we need to wait for another large US company to go bankrupt the focus moves from finding blame in Enron to trying to prevent this in future? When we look back to Maxwell, Polly Peck and BCCI in the last recession each had high level directors of the business pulling the wool over the auditors and investors eyes and conducting in pressure to keep the businesses afloat until it all collapsed around them. Perhaps the DOJ and Congress should look at reform for the future rather than revenge that may put another 85,000 out of work.
Peter Bricknell, UK

The Anderson affair has massive implications for all professional services, not just accountancy firms. People are now aware that no matter how smart the offices and suits and no matter how many qualifications someone has got, there is now good reason not to automatically entrust your or your company's affairs to anyone. Even established professionals have now been seen to be dodgy dealers. It will take a long time before trust is rebuilt.
Richard N, UK

It is a bout time one of the big five got brought down to Earth! As a small investor, I have always been ultra suspicious of financial reports and audits. So long as accounting rules can be twisted to make a Dog into Cash Cow there are many more Enrons in the cupboard. Accounting methods should be revised to remove any grey areas prone to creative accounting and accounting firms should not be paid by their clients but rather from a governmental body which is funded via a tax on the size of the corporation. This way the temptation to cook figures and get paid fat fees are removed because the government would set the rate paid to accounting firms based on the size of the corporation audited.
Danny, UK

Companies such as this are the inevitable conclusion of an unregulated capitalist free market

Dave, UK
I tempted at Enron for the last 5 months of trading. When I joined I was issued with a new starter pack in which the first page gave the motto, "Enron is in the business of making money, we choose to do it in the power & energy sector. Our competitors are in the business of supplying power and energy and hope to make money in the process". Companies such as this are the inevitable conclusion of an unregulated capitalist free market, that they go beyond the rules is hardly surprising when the philosophy is so inherently unethical.
Dave, UK

Does anyone else see similarities between the Enron scandal and Equitable? In both cases it seems that the problem was caused by taking large market risks and not hedging, in both the top dogs seem to have done okay, but the ordinary person got fleeced, while the auditors/regulators "never saw it coming". However, the difference seems to be that in this case, the auditors are getting a grilling, but in the UK, the regulators aren't under the same sort of pressure. Could this be because the regulator who Okayed the Equitable was the government treasury itself?
Martin, England, UK

While not wanting to deny the existence and the rights of the corporations I believe all major corporations should be put under continuous independent legal scrutiny into what they do and how they use their power. It is known throughout the world that the big corporations and politicians play in same orchestra that is not necessarily good for anybody else than the corporations and the politicians. Control them tough by fully independent (from politicians that is) judiciary and make them work for what they claim to work for. Also some restrictions should be put on management options or any compensation other than salary that is dependant on profit shown in bookkeeping, as this is a manipulative matter. As a matter of fact I would deny any shareholding for hired management other than themselves buying company shares and thus becoming shareholders. Finland
Mikko Toivonen, Finland

The most important investing advice has always been to diversify

Jamie Bessich, Huntington, New York
I do feel sorry for those who lost their savings and were decepted by Enron. Enron's accounting practices were inexcusable. But, a human being cannot expect the government to be his mother and protect him against every evil. The most important investing advice has always been to diversify. To quote a cliché, one should never put all his eggs in one basket. Although those with investments in Enron would have lost SOMETHING when the company collapsed, the blow would have been much less crushing to more responsible investors. Let that be the lesson the layman takes away from Enron.
Jamie Bessich, Huntington, New York

The implications are that a lot of corporations are using accounting and auditing practices similar to Enron's - particularly those using Arthur Andersen. When these shaky practices are discovered, a lot of stock prices are going to take a dive.
Jim Hubbell, USA

The Enron/Anderson affair has got to be one of the largest white-collar crimes ever committed. $500,000 fines are just a slap on the wrist to most of the perpetrators. They should be put away for good and all their assets seized and the proceeds distributed to those swindled by these criminals.
John, UK

Arthur Anderson is just as guilty as Enron. An accounting firm that didn't know where the money was going? Everybody in the know was trying to get their cut before the bottom fell out. Trust in a company and their employees to do the right thing is a cornerstone in business.
Russ, USA

I don't understand what I keep seeing here...people defend the Bush administration because they turned down Enron when it asked for help? What in the world are you TALKING about? Enron got just about everything...let me repeat that just about EVERYTHING they asked for from the Bush administration until the very end when it was clear that they didn't have any more money, THEN they were turned down flat. So much for your integrity.
Tom, USA

Enron fell because it gambled on derivatives, leveraging its existence by forming many 'secret' risky deals. The contributions made earlier didn't save Enron at the end, BUT the contributions influenced lawmakers/regulators to not insist on proper/'more honest' accounting practices and reporting methods. I still want to know who decided to change 401(k) managers during a critical time, thus freezing the employee/stockholders' stock, while the bigwigs sold-off (possible back to Enron?) at good profits.
B Cleveland, USA

When Enron approached Nigeria to do some work for the oil industry, the Nigerian Government called Enron executives a bunch of crooks - and that even by Nigerian Government's standard of corruption and graft which puts Nigeria as the most corrupt nation in the world.
Anil Vadgama, UK

It isn't just Bush, it's the rotten lot of them

Shelly, Califonia, USA
I know a lot of people want to lay this at Bush's feet. But I've been concerned about Enron for much longer than he's been in office. After all, the politician who took the most money from the Enron people isn't Bush, but Gov. Gray Davis, a Democrat. As a Californian whose state's consumer's cries were ignored for years, am I supposed to think that a change of administration at the presidential level will help?

Fact is, we have been gouged under both the Clinton and the Bush presidencies while the rest of the nation incorrectly thought it was our fault when in reality it was a crisis created to line the pockets of greedy men from both sides of the aisle. Clinton and his people had a chance to stop this before it got out of hand and he chose to ignore it. In fact, I remember them telling us that "conservation" would make it all go away. HAH! Get real people. It isn't just Bush, it's the rotten lot of them. Have pity on the California voters this fall because it is either Davis or Riordan, both of whom have exploited the citizenry.
Shelly, Califonia, USA

The Enron saga is such a rich window into the condition of American society that it will be years before the implications are fully understood. The political payoffs, the relation between corporations and their auditors, the manipulation of financial statements, the failure of the Enron board to put a stop to questionable practices, the bribery of Indian officials over the Dabhol Power plant, is a catalogue of the issues that Americans will have to sort through for a long time to come.
Ralph Sato, USA

In the end this will simply be another corporate bankruptcy case, though a large one to be sure. But that's life, it's not fair and you have to plan for that fact. To say this is somehow the fault of the Bush administration (how do you get that conclusion anyway?) or simply American corporate greed is ignorant scapegoating. I've not heard much here about Arthur Andersen, Enron's auditors. It was Andersen's job to make sure that Enron was giving shareholders all the information they were entitled to, but instead they seemed to aid in the cover-up. I feel bad for those who lost money in the collapse of Enron but the first rule of investing is to diversify and eliminate the systemic risk inherent to the equity markets.
Kerry, USA

The American taxpayer must know why and how the national energy policy is being developed

D. R. Hames, USA
The ongoing curtain of secrecy and apparent collusion between the Bush administration and corporate management plants the seeds of distrust in the minds of the American voting public. The American taxpayer must know why and how the national energy policy is being developed and whom it benefits. In addition, the fact that members of congress took campaign moneys and passed legislation circumventing regulations intended to protect the people will change the voting choice of an informed public.
D. R. Hames, USA

Although it is a shame that so many people lost their money in the Enron collapse, I do find it hard for many people to be surprised. Investing is a risk and anyone who blindly decides to ignore that will get hurt in the end. However, unfortunately there is much leniency given to the accounting firms, but Enron went way beyond the call, and it basically came down to greed and money, as does everything in the US!
Dahlia Elshourbagy, US

Everybody says how horrible the Enron scandal is. But, in the end, only the Enron employees and millions of American citizens have to pay for expensive electricity. The politicians and Enron executives will profit. They will not give the money back. You can't expect the American people to really believe that multimillion dollar executives didn't know what was happening. It's a no-brainer. Just look at how they smile after pleading the 5th.
Russ Black, USA

Everything Enron did was actually legal. It was devious, yes, but legal.

Kevin, USA
A simple truth that many overlook here is that everything Enron did was actually legal. It was devious, yes, but legal. The flaw is in the generally accepted accounting principles. Corporations must use accrual based accounting, meaning when something is "sold" or "bought" they must record it and are taxed on the transaction, even if the cash flow has never occurred. With the ease of establishing new small corporations, Executives can, and OFTEN do establish partnerships to "sell" their product to for a large amount of money, and it is recorded on statements as a financial gain, even though no cash flow has occurred. Eventually if the cash is not collected, and it never is in these cases, then it must be written off a bad debt expense. To avoid this, new partnerships are established and they cover the "losses" and put up new sales and new "profits". As an investor you are only able to see the end balance sheets and can not see how much money is spread over different partnerships or subsidiaries. This is the fundamental problem that must be addressed.
Kevin, USA

Politics aside, I think it is a shame that Mr. Lay refuses to testify. It does not give any boost to whatever integrity he seems to have had. The other thing is that corporations like Enron seem to be thriving on hype and barraging and controlling media. Enron had a huge pool of spin doctors and they create so much hype that people think that they are invincible. If anything, Mr. Lay should be stripped of rights to appeal and must be made to answer, even if under force. Damn the people who say it is against human rights.
mars, India

This is what will happen. The whole American public will cry for the truth. The politicians will promise the world. The courts will juggle, strike a deal with the policy makers and sweep everything under the carpet in the name of "national security". The people who lost their precious savings will be left with the ruins of a classic American dream. This goes on for a while, then Bush brings up another war, everyone forgets and move on to Stars, Stripes, Patriotic rhetoric and God Bless America business.
Mahesh, India

I waited and watched the Senate Committee opening ,and I have to agree with Kenneth Lay's conclusion, the outcome has already been decided. I watched a bunch of what appeared to be self serving politicians all claiming their five minute sound bite speech. Partly trying to prove that the political donations from Enron could not taint them. Partly to impress their constituents prior to the next election campaign. The reason for Enron's demise may be because of criminal practices, and some principal players may be guilty of wrong-doing. There is no doubt in my mind though that the committee is baying for blood and they don't care who's. This is one group of senators that Nero would have recognised from his "Bread and Circus" days. More of a "Roman Circus" that Senate
Vincent, Liverpool, England

Wow! so an American corporation paid money to a political party to gain influence. Is this news? It's the system that stinks, and one side blowing raspberries at the other does nothing to put it right. Funding should be on party members' contributions alone, and this should be limited by legislation. Better still, run campaigns on a volunteer basis, and then the good guys really would win.
Craig Harry, England

Our government owes full and complete disclosure on all their dealings with Enron. They should remember that the employees who suffered at the hands of these so-called executives are voters and they will remember at the next election. I very much doubt the Fifth Amendment was created so that people who were given a fiduciary responsibility could hide under it. The government should come clean and the Enron upper echelon should be prosecuted to fullest extent the law allows. President Bush should remember his election promises and live up to them.
Di Stewart, USA

Bush ran against Clinton stating he would have an open administration and not try to hide questionable conduct through claims of executive privilege. Given this promise, Cheney should turn over all documents immediately. If there are issues not suitable for public airing, these can be reviewed in a closed door session with congressmen.
John, USA

Politicians often seem to forget that they are our employees.

Rob, US
Politicians often seem to forget that they are our employees. We elect them to their positions (generally - sometimes the Supreme Court does), we pay their salaries, and we decide when they no longer should serve us. They, in turn, spend our tax dollars, control the quality (or lack thereof) of the air we breathe and the water we drink, and otherwise manage our national assets. That being said, of course they should disclose their dealings. Sadly, however, I'm afraid this will not be the case. Within the Beltway, calls for accountability and ethical behaviour fall on deaf ears.
Rob, US

Why should a huge corporation like Enron or indeed any company have any input into the Bush Administration's formulation of it's energy policy? They should have had no more input than the average voter. I for one think the practice of campaign contributions is an atrocious corruption of an already corrupt political system, the sale of access to policy makers. If something is not done about this practice NOW, then something is terribly wrong in this country. The Administration should turn over any and ALL records of it¿s dealings with Enron at once if they have nothing to hide. And if none of the Fat Cats at Enron get prison time behind this debacle then the government might just as well admit that everything here is for sale, that money can even get these criminals off the hook, criminals who are worse than any bank robber.
Suzanne, USA

Information is power, and our elected representatives (i.e. the president and his cabinet) must retain the ability to secure relevant, poignant and unfettered access to the best minds of those in the know. If we were to demand a full accounting of all conversations from everyone who ever sought an audience with elected officials, those persons would be unwilling to "go on the record" with their insights. Obviously, the administration did nothing to help Enron (or they wouldn't have gone belly up). When we elect our officials we do so with the belief they will act in our best interests and with our full confidence. Why then should we immediately suspect the worst from them when something bad happens? Enron was a rogue corporation. Yes, Enron pushed to continue deregulation of the energy market and was a leading factor in rising forward market of energy prices. That does not mean Cheney knew or condoned this. I have no reason to believe our Mr. Bush is anything but a paragon of virtue.
Pat Whalin, USA

Transparency should be the order of the day. Why should government officials not be subject to the same scrutiny like the rest of us. Remember thousands of employees have lost their investments and they should be able to get the whole picture of what transpired. All details should be made available except that which threatens security
Arif Sayed, Dubai, UAE

Of course they should come clean. Apart from their moral obligations of being the elected representatives of the public, they, like any others involved in this are not above the law and should disclose their involvement. If they do not, it would seem that they might have something to hide and be a party to the dealings of crooked or incompetent executives.
ajf, Singapore

Corporate governance needs to be looked at.

Irfan, USA
In economics the term "Asymmetries of Information" is used to describe how management can profit from information which is only available to them. The creation of joint stock companies has separated ownership and control. Subsequently those who run the organisation do not own it (yes they own shares but not the whole company) therefore they have an incentive to maximise their own welfare at the expense of the owners/shareholders. Thus we had the creation of a chairman to monitor the Chief Executive - the problem is that in US/UK there is a predominance of a single Chairman/Chief Executive. Corporate governance needs to be looked at.
Irfan, USA

Why should our government officials be implementing policy based on "advice" from the private sector anyway? Opinion from industry professionals is one thing, undue influence is quite something else.
Di Stewart, USA

The question the US people have to ask themselves is this: Is the issue of corporate and Governmental responsibility worth revealing to all and sundry what the detailed thoughts of the US are in the area of energy? Not knowing what might be revealed and how useful it might be to the rest of the world, I can't answer that one... But my personal opinion is that the American people are getting sick and tired of sleaze and they might be prepared to take a stand on this one - which may mean that the next Presidential election will be the first one for a few generations where the election will be totally decided on Governmental integrity and corporate responsibility.
Rhys Jaggar, England

For the White House to refuse to cooperate smacks of complicity.

Michael, USA/UK
A government "of the people, by the people and for the people" has an obligation to disclose such information in light of this investigation. A great many lost their life savings and many have lost their jobs. They, and we, have the right to know all the facts and let the chips fall where they may. For the White House to refuse to cooperate smacks of complicity.
Michael, USA/UK

Enron and a number of its executives contributed more money to Bush over his political career than anybody else -- over $550,000! Less than a year later, Enron's bankruptcy and the final disintegration of its stock price wiped out the company retirement savings of hundreds, if not thousands, of Enron employees. President Bush should donate his $550,000 to funds, such as the Enron Employee Transition Fund. Meetings between the White House and Enron should be disclosed if the current government claims to be democratic.
Ratna Sengupta, USA

Yes, white house should disclose the truth, but do they ever disclose the truth?
Frank Shipley, USA

Being in US for last 3 years, I have followed the post-Clinton political dramas with great interest, and we have a new one in our hands now. I will support the White House on this issue, as the investigation should happen through the Enron executives who were involved. I think realizing it senator J Lieberman has decided to go from the other side and not embarrass the White House with unnecessary accusations. If the Enron executives spill something in investigation, one could then ask White House for answers, not the other way round.
Jee, India

We are entitled to access to these records.

Chris, Colorado, USA
The GAO's decision to take the White House to court marks a watershed in U.S. political history. The ultimate question that will be decided is if the public in this country has the right of access to public records or if the executive branch may withhold these records in the name of "confidentiality." Ultimately, the administration is employed by the people, not the other way around, and we are therefore entitled to access to these records.
Chris, Durango, Colorado, USA

The fact that Enron contributed to the Bush campaign has nothing to do with its collapse; the contributions were hardly great enough to have brought Enron down by themselves. Terrible business management, dishonesty, and lack of integrity are to blame. Companies go under all the time, but accounting firms must tell the truth; the SEC should shut down Anderson for good.
Chris S, USA

I find it particularly amusing that this has spread to Britain now - but it is even more amusing that the Tories are berating the Government and calling for all sorts of inquiries, whilst themselves acknowledging that they too were beneficiaries of Enron's political donations. Of course there will be more revelations, but remember, nobody is whiter than white, and it's possible to say that, to a degree, every businessman and politician is corrupt.
Paul, UK

Enron have done the right thing and it is the politicians who are corrupt.

Mark Beard, UK
Whatever the other sins of the Enron directors, they owed a duty of care to their shareholders to play the system to the best advantage, even if that means making political donations. Elected representatives owe a duty of care to make decisions in the best interests of their constituents, irrespective of who funds their parties. In this case, as unlikely as it seems, Enron have done the right thing and it is the politicians who are corrupt. The solution is to outlaw private political contributions and to make visible the decision making processes of elected ministers.
Mark Beard, UK

I find the revelations about Enron, Arthur Anderson, and the British government hilarious. The Labour Party is already dancing around the issue of the contributions they received and the appearance of having been paid off for favourable legislation and other governmental actions. Looks like Britain's holier than thou attitude towards the American government's involvement is about to evaporate. It just reaffirms the old saying that people in glass houses shouldn't throw stones.
Mark, USA

There are times - fairly frequent - when it is embarrassing to be a US citizen, and this is one of them. Our government (both sides) has been severely corrupted by corporate money for years, and we've all been quite aware of it. Now to have it rubbed in our faces like this is just insult to injury. On the plus side, maybe we can actually expect a little reform this time around. If not, we are in for a very hard lesson in disintegrating social trust and responsibility...
Jesse King, Boston, USA

The US Treasury Secretary claims the collapse of Enron was due to the "genius of capitalism". Lenin said it best - the genius of capitalism is precisely that companies are driven to compete more and more ruthlessly and overstretch themselves in the hunt for more of a market share until something like this happens. The collapse of big companies with all of the harm caused to their employees is part of the internal dynamic of capitalism and not what I would call genius
Niall Kennedy, Scotland

I long for the day when private finance cannot be used to fund the running for political office

Steve, USA/UK
As an American who lives both in Florida and London, I have to say that some of the comments from my fellow countrymen in this forum really does beggar belief. It is an undeniable fact that our political system is corrupt - almost to the core. You have only to look at the "quality" of presidential candidates we are left to vote for, and what they do to reach that stage, to realize that. I long for the day when private finance cannot be used to fund the running for political office. Granted, the Enron debacle probably wasn't caused by our political masters, but I'd be willing to bet that they didn't help - and that sooner or later it will come out that those in office knew something of this affair long before they appeared to do the noble thing. We'll see. And to those who shout for anyone who is not American to "mind their own business" -it's called a DEBATE people. I thought we left that "head in the sand" attitude behind us on Sept 11. Obviously not.
Steve, USA/UK

Here is the problem. Auditors do lots of business with their audit clients. Management consulting, information technology work etc. The audit engagement partner CANNOT alienate the client because not only the audit fee but all the additional fat contracts will be gone... In Enron's case audit was $25M - an additional $27M was paid to "other" services. The solution is that an auditor should be selected (randomly) by the SEC paid at a predefined rate by the company. This way auditors won't worry about losing business and they would be more "honest" with their findings.
George, USA

So the mighty Enron seems to have been nothing more than a sleight of the hand. Whatever the root causes, for Ken Lay to make a $123 million profit as the company was sinking is sickening (meanwhile trying to ramp the price by recommending the stock to hapless investors). The man should be jailed.
John, UK

Bush's integrity in the matter may have been the final nail in Enron's coffin

Shane, USA
A good scandal does wonders for the media's pocket book - see Bill Clinton. But conspiracy theorists are out of luck this time. When Enron appealed to the Bush administration for special favours, it was turned down flat. In fact, Bush's integrity in the matter may have been the final nail in Enron's coffin. I'll wager that there are some stockholders out there that wish Bush were a little more crooked.
Shane, USA

So Enron paid a lot of money to both Republicans and Democrats. So what? Enron's chief visited US government officials begging for a bail- out at the expense of American taxpayers. He did not receive a penny and soon afterwards Enron was forced to declare bankruptcy. This is the American way - that's how it should be.
Mirek Kondracki, USA

This is just another US fiasco that goes all the way up to the Commander in Chief. What goes around comes around. But as usual the American people, who don't go beyond their little borders, can't see for the sugar-coated news, geared at only flag waving. Those Americans who have been involved with international affairs are the only handful that know what is really happening and can see through the smoke screens.
Asherah Rachel, Canada

It is a national disgrace that politicians get all this campaign money from the corporations, then turn around and give tax cuts to the fat cats that do not pay any taxes. I hope the Attorney General will prosecute these crooks at Enron with the same zeal with which he is prosecuting the American Taleban.
Ricardo Arizona, USA

What sort of example does this set to the rest of the world?

Adam, UK
This whole sage is endemic of the horrific greed that has overtaken America during the last 12 years of the great bull market. What sort of example does this set to the rest of the world?
Adam, UK

I think the wise thing to do is wait until the facts are revealed and take it from there. People waste an awful lot of time second-guessing situations.
Gwen, USA

I'm amazed at some of the naive and misguided comments on this board, particularly from the Europeans. I guess I shouldn't be surprised, though, that many of the comments would be directed at how corrupt or how unique the US is in corporate greed and such. Corporate greed knows no geographical or political boundaries. It exists everywhere.
Tom, USA

If Democrat lawmakers pursue this with the same zeal that the GOP did with Clinton's impeachment, it could end up backfiring, as it did with the Republicans

Chris Power, UK
I think it's inevitable that there's more to come with Enron. As they dig deeper and deeper they'll turn up plenty of fascinating and underhanded practises that were allowed to succeed due to the current US laissez-faire approach to accounting practices. As for political fallout, there could be casualties on the Republican side, but equally, if Democrat lawmakers pursue this against Republicans with the same zeal that the GOP did with Clinton's impeachment, it could end up backfiring on the Democrats, as it did with the Republicans.
Chris Power, UK

As a member of a party not affiliated with the two major power sharing groups in the US I just find it funny how there never seems to be any real scandal in the eyes of people who belong to the offending party. It's always smear tactics by the opposing party. There is a real lack of concern for truth, and a constant bolstering of people or groups within the parties who are genuinely corrupt.
Ken, USA

Enron is a typical example of the culture of greed within the US. It just shows that no one is invincible and corporate greed to the point of stupidity is not good business sense. The worst part of the scandal is how the executives treated their staff, making massive profits for themselves by selling shares but telling the workforce to keep their own stock. I'm sure this won't be the last US corporation to fall flat on its face.
Alex White, UK

Despite the hopes of certain partisan political wonks, I don't see anything wrong with how the administration or the government in general handled the situation. Enron failed because of their own lack of merit and leadership, and the money that they gave to both sides of the political isle had no effect on this process.
Nathan, USA

The collapse of Enron appears not to be about Liberal or Conservative, Republican or Democrat but about honest or dishonest. The test now for the United States is will the guilty gain or suffer: will the innocent be made whole? That answer may define life in the United States as much as 9/11.
Tim Creedon, USA

As a former UK employee who luckily got out in time (though not unscathed thanks to Enron's generous share scheme) I'm surprised at the comments made by another former employee that the Enron Europe business plan was sound - he can't have been working in the same business as me then. Enron's approach to business was high risk and involved trying to anticipate and exploit market opportunities - too many of which never materialised and most of which were overvalued (remember Enron always highlighted revenue, not profit), and the main reason Enron failed. However I'm not critical of that particular strategy - the risk and opportunity was one of the reasons I and many others joined the company.

What I am highly critical of is the fact that senior management continued to hype up the company and led us to believe that in fact the business plan was still sound long after they knew that it had failed - whether that is criminal or not will be up to the courts but I do know that it's certainly not honest or moral. But I do agree with him regarding the treatment of its European staff - appalling, and the unmasking of the true attitude of Enron's management.

One of the major issues to come out of this is that there needs to be an absolute restriction on companies investing pension funds in their own shares. That would avoid employees losing both their jobs and their pensions at the same time if the company folds. It would also stop directors from bolstering the company share price by investing employees' funds.
Brian W, U K

The Bush administration has saved everyone from a scandal. If there had been a bailout, Congress would certainly have had to appropriate the funds or legislate an exemption for Enron. Far from being in the pocket of the energy industry, Bush's refusal to act on behalf of a mismanaged corrupt organization has shown an integrity that is more often lacking than it is found. Anyone can point out the large sums of money given to the Bush campaign, as well as to Democrats, but it didn't buy them a thing, except for a major investigation.
Chris Oler, USA

I come from the old school let me tell you how I see corporations in the US. These guys are almost pirates and the corporate world is effectively the modern version of slavery with pay and no beating. It's at times like this that I wonder whether state run enterprises are actually better. As for stocks I see them as casino chips! Gambling - corporate style.
Mohammad, USA

Scott Janssens, US - you should look up the meaning of investment. Investment is putting resources (money) into an opportunity and taking on some risk and some expected return. In this case the risk is unacceptable because the senior execs at Enron seemed to be deliberately misleading the owners of the company (the shareholders) and the employees. Directors of a company have a duty of trust to the shareholders that they seem to have failed and the scale is such that the law should be brought to full force.
Roger, UK

Mohammad from the USA: Perhaps you should look up the definition of slavery. As for the stock market being a gamble, that should be nothing new to anyone who invests. The first law of investment is to never invest more than you can or are willing to lose. Yes it appears that Enron has broken laws and if proven the persons responsible should be punished for that. But I find it difficult to pity employees who didn't pay due diligence.
Scott Janssens, Seattle, USA

See also:

31 Jan 02 | Business
White House resists Enron challenge
12 Jan 02 | Business
Enron chief asked Treasury for help
10 Jan 02 | Americas
White House plays down Enron links
10 Jan 02 | Business
Q&A: Enron's plight
05 Oct 01 | Business
Q&A: Bankruptcy made simple
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