Enron and more

December 26, 2005 8:41 AM

Corporate Scandal 2006. The year of Enron. Some articles (and at least one documentary) attempt to outline the size and proportion of the economic, financial and political dimensions of the scandal involving notorious names. As Sam Buell, a former federal prosecutor with the Justice Department's Enron Task Force puts it ""The deepest, most complex, most system-related case would be the last one to be resolved in all of this". Meanwhile Calpine company operating 90 power plants in U.S.A. recently filed for Chapter 11 bankruptcy protection with debts measured in billions of dollars. Among other problems the company wasn't able to predict negative consequences of an increase of natural gas price on at least eight significant contracts. (But hey they're new to this gas market things, it's my first day at work and I signed eight big contracts ! D'oh !). Who routinely gets it up the arse ?
posted by elpapacito (16 comments total)

Greed has become the highest value in our culture.
I don't expect much from the trial, Ken Lay for one has the right kind of friends.
posted by threehundredandsixty at 9:21 AM on December 26, 2005

And don't forget the NSA spying thing involves quite a few corporations as well...do our privacy agreements with our phone companies, isps, and others really allow for everything we do to be spied upon without warrant or cause? What are the implications?
posted by amberglow at 9:23 AM on December 26, 2005

ah, so 2006 is the year kenny boy will finally stand trial? Or do we have to listen for another year about how the case "is really complicated" and that more time is needed to prepare the case?

Its been years and years now. If there was real justive in this country Lay's asshole would be the size of an orange by now.
posted by H. Roark at 9:29 AM on December 26, 2005

Keep repeating: You are free.
posted by Artw at 9:29 AM on December 26, 2005

So what I'd like to know: what if the individual losses experienced by each employee on account of Enron's criminal management were treated as robbery?

How much time would they do?

For the sake of fairness, we could divide the # of years by the number of culpable executives. And we could even assume that losses from the height of Enron's stock price don't count, just losses from PG&E to Enron's current price.
posted by namespan at 11:00 AM on December 26, 2005

I wonder how this compares with the amount of wealth destroyed by governments around the world every year? Porbably pales in comparison. (BTW, don't forget to include the IMF and World Bank.)
posted by ZenMasterThis at 11:04 AM on December 26, 2005

Wouldn't that be a pretty picture? Length of sentence decided by monetary amount defrauded/stolen? I could see Lay and his 'associates' doing multiple life terms with no possibility of parole. Plus seizure of all assets to reimburse as much as possible those defrauded/stolen from.
And pigs will have wings . . .
posted by mk1gti at 11:17 AM on December 26, 2005

RE the IMF and World Bank, that bunch should be tried in an international criminal court for the amount of damage they've done worldwide. Again, multiple life sentences without parole. And coal in *all* their stockings! No second helpings of porridge either!
posted by mk1gti at 11:18 AM on December 26, 2005

mk1gti: actually one just needs to give them a taste of their own medicine...for instance, if I were an abitual delinquent I would ask them to pop up all their money to me OR they'll find that even if the sentence is light, life can be a lot miserable when you're a rich outkast ..money runs out very very quickly when you're triple charged for everything..we know you stole it so you have no probs paying.
posted by elpapacito at 11:49 AM on December 26, 2005

So an H. Roark is complaining about Ken Lay. Fascinating.
posted by callmejay at 12:07 PM on December 26, 2005

this compares with the amount of wealth destroyed by governments around the world every year

given that "wealth" is defined as that which provides utility/happiness, generally only acts of war actually "destroy" wealth.

Governments *waste* capital resources and labor in producing goods & services of questionable utility, but that is not technically a destruction of wealth, since government "waste" ends up in the pockets of somebody, somewhere.
posted by Heywood Mogroot at 1:39 PM on December 26, 2005

only acts of war actually "destroy" wealth. ...
government "waste" ends up in the pockets of somebody, somewhere.

Let's be more specific then. Halliburton, Dick Cheney and Iraq?

There's money spent for the common good [the function of good government] or for special interests [the function of the GOP :-)]
posted by nofundy at 6:36 PM on December 26, 2005

given that "wealth" is defined as that which provides utility/happiness, generally only acts of war actually "destroy" wealth.

Or ineffective levees. But then we're just playing a causation game.

Governments *waste* capital resources and labor in producing goods & services of questionable utility, but that is not technically a destruction of wealth, since government "waste" ends up in the pockets of somebody, somewhere.

Really? So if I were to lock up a marijuana user, the wages that he didn't earn were merely wasted?

Either you're naively ignoring opportunity costs, or you're playing semantics.
posted by Kwantsar at 8:18 PM on December 26, 2005

Interestingly, Calpine was one of the few "good guys" in the California energy market back in the dark days (figuratively and literally -- rolling blackouts) of the CA energy market. I used to work in the industry back then and insiders always painted Calpine as a shining star: their foot-in-the-door purchase of the Geysers paid off the year they bought it and they were golden the moment afterwards. They ran a fairly clean game both financially and environmentally and during the ugliest moments of the energy game in California weren't one of the nasty players.

So its not as if they were total bozos.

Calpine's penchant for growth is what bit them in the ass as much as the sudden shift in LNG costs. Building generation facilities isn't like building corner markets -- the projects they are completing today are likely four to five years in the making. Back then you'd have been a fool not to prop up a generation facility everywhere you could because cranking out watts was like printing money back in 2001.

Things have changed since then. Sir George took us to war, Katrina blew out a huge chunk of refining capacity, the economy softened, and the state locked down fixed rates for wattage through long-term contracts which seemed like a good move at the time.

Calpine was reaching high when the ladder got knocked out from underneath them. I was shocked to read that their stock had been de-listed and had gone penny, remembering back in the day when even after the split it was in the upper-nineties.

Sad to see them take the tumble, they weren't no Enron and didn't deserve it nearly as much as a half-dozen other companies in the market did and still do.
posted by Ogre Lawless at 1:20 PM on December 27, 2005

ogre: I have a very hard time believing Calpine directors didn't factor in the final price any potential natural resources fluctuations. At least if not entirely they could have (and maybe have I don't know where to get the contract) asked for an higher final price in exchange of taking partially the risk of price fluctuations.

Problem may be that going Chap 11 is , maybe, more convenient because not proving power , aka rolling blackout, have very significant social and economic impacts ; in the elite circles some say it's getting your customer by the balls and menacing to squeeze !

If anything this is significant evidence, suggesting that a free market completely devoid of rules is not going to regulate itself in a way that is always necessarily beneficial for society as a whole ( or not damaging to)
posted by elpapacito at 2:05 PM on December 27, 2005

The chief Enron accountant just flipped and will now testify against "Kenny boy" and the others.
I want the money put back they stole from the American people, especially Grandma Millie.
posted by nofundy at 5:47 AM on December 28, 2005