Monday, April 10, 2006

The Enron Saga Continues

I don't spend much time in Houston these days but the news coming from the courtroom there has caught my attention. Our apartment is a couple of miles from Enron's famous edifice and we know a lot of Enron people who have suffered badly from the company's collapse. So it is with interest that we watch Mssrs. Lay and Skilling have their days in court.

I've never met either of them but I have been in their old executive suite on the 50th? floor. This in itself spoke volumes about their lavish use of stockholders money. Ken Lay was considered the most generous man in Houston, lending his and Enron's name to all types of good works. I rather think that a lot of Enron's stockholder's money went the same way in a huge plan of self-agrandisement for the Lay family.

Many Houstonians were shocked when his wife opened "Jus' Stuff", basically a second hand junk shop selling off the family furniture. I could never understand why no-one threw a brick through the window. Doonesbury spent several weeks taunting the Lays about this venture.

But in many way it is Geoff Skilling who justifies the deepest analysis. He came, he profited, he resigned. Then Enron went into swift decline. He wears a continuous pained expression as if he is really hurting from all the adverse publicity. See through it, folks! He has not been wronged in any way. He thought he could get away with converting Enron from a company with assets to a company with knowledge. Trouble was, the knowledge was flawed and with no assets the stock collapsed. Once he recognized that, he was gone. A good captain doesn't leave his ship before the crew have put on their life jackets.

The key to the law suits probably lies in the timing of various stock sales when Lay, in particular, was urging employees to invest in their company and add more stock to their retirement accounts. Lay will say he had a tax bill to pay. But that does not excuse the fact that many ex-employees now have no pension after giving years of their life to Lay's dream.

The most interesting aspect of all this is in the way it emerged, through a whistle blower, Sharron Watkins. She is one brave lady who was able to see that the emperors wore no clothes and decided they should know it too.