Houston-Texas, United States generated two very dramatic events in the last days of May 2006.
A trial court in Houston, through its jury announced the convictions of Enron founder Mr. Kenneth Lay and Jeffrey Skilling, the former chairman and chief executive respectively, of the now defunct Enron Energy Corporation that was in its heydays, headquartered in Houston, and Enron was a Houston renowned institution, I might add. But then, Enron engaged in fuzzy math and it landed in legal hot waters!
Enron was once the toast of the financial markets and the darling of Wall Street. Enron had a spectacular rise to phenomenal heights on the rockets of success, at the end, Enron was a victim of its success, its fictitious success to which it was catapulted, with funny mathematics.
Why did CNN focus on a few Nigerians in Houston Despite the Enron Catastrophe in Houston? Is this just a matter of perception and perspectives? How did CNN manage to neglect the forest of the Enron debacle, while CNN was in hot pursuit of a few crumbs of trees by way of a few Nigerian immigrants involved in frauds?
Ken Lay in cuffs
Time Magazine described the Enron debacle in these words; After a four-year investigation, 16 weeks of testimony and less than six days of deliberations, a jury of eight women and four men decided the decline and fall of Enron weren’t just bad press and bad luck, as the two had claimed.
The rot came from within. For all the Porsches parked in the company garage, it turns out Enron didn’t have much in the bank. Forensic auditors have discovered that cash flow in 2000, the money left over after the bills are paid, was a negative $153 million, not the heady $3 billion claimed. The nearly $1 billion profit was bogus. Forget 2001/ Even the auditors couldn’t fathom the books that year. Banks like JPMorgan Chase and Citigroup, who financed Enron’s schemes with stock and bond offerings, have already agreed to pay $7.3 billion in restitution to shareholders. Sentencing for Lay and Skilling is set for September, but with the trial over, 16 other Enron employees who turned state’s witness can also be sentenced.
Enron’s stock price was up 36% last week, despite the news that founder Ken Lay and former CEO Jeff Skilling had been convicted of lying to investors and employees as the company sank into bankruptcy in 2001. The once mighty energy firm, which traded at $90 a share six years ago, is selling for 15¢, up 4¢ on the day after the verdicts. It would be laughable if so many people hadn’t lost so much–stockholders lost $60 billion in market value, long-serving employees lost more than $2 billion in pension money, and 5,600 people lost their jobs.
Today not much is left of the pipeline company that Lay, the preacher’s son from Missouri, turned into a high-flying purveyor of wind and water, electricity and energy emissions and, ultimately, hot air
The moral victory is won, says Steve Berman, a Seattle attorney representing some 21,000 employees who lost their pensions. Enron joins WorldCom, Adelphia and Tyco among the big companies busted by President Bush’s Corporate Fraud Task Force, which has won 1,063 convictions, including guilty verdicts against 36 chief financial officers and 167 corporate CEOs and presidents. The 64-year-old founder faces up to 165 years of hard time; Skilling, 52, is up against a possible 185 years.
The jury found that Lay criminally touted the stock even after whistle-blower Sherron Watkins gave him her famous memo in August 2001 warning that Enron’s accounting was deeply flawed; Skilling had quit only days before. Both men were found guilty on every charge of fraud and conspiracy in the indictment–six against Lay, 13 against Skilling. While Skilling was acquitted on nine charges of insider trading, he and Lay were also convicted on various other charges involving stock sales and audits.
Sam Buell, an early member of the Enron Task Force, remembers how difficult it was to assemble a case back in January 2002–a month after the company’s bankruptcy and with the suicide of Enron’s vice chairman Cliff Baxter seared into everyone’s conscience. “Enron was the 9/11 of the financial markets,” says Buell, now a visiting law professor at the University of Texas, “but nobody wanted to be a witness.” Slowly, the task force’s prosecutors turned the screws on the bad guys.”
It is funny how CNN, an American media giant, known worldwide, chose to focus on the petty crimes of some Nigerian immigrants in Houston, while a court in the same Houston, was rendering verdicts in corporate greed that led to the Enron debacle. It goes to show that it is all a matter of prisms, perceptions and perspectives. Where you stand on issues, is determined by where you sit. Arizona according to The New York Times, is the identity theft capital of America and not Houston. STOLEN LIVES; Technology and Easy Credit Give Identity Thieves an Edge Phoenix-Arizona, In a Scottsdale police station last … highest rate of identity theft complaints in the nation … to print checks in his victims’ names. So, why did CNN focus on the Nigerians in Houston? Is it because the thieves in Arizona are not Nigerians?