culture, politics, commentary, criticism

Thursday, May 15, 2003
Enron's "mighty man adventure vacations." An SEC complaint filed a couple of weeks ago supposedly offers a "road map" (the metaphor du jour) to the prosecution of former Enron CEO Jeffrey Skilling for fraud.

But what's interesting about this
Wall Street Journal (sub. req'd) account by Rebecca Smith is the Testosterone-Helper culture of Enron's senior management:
The complaint details occasions in which EBS [Enron Broadband Services] executives allegedly misled investors by painting a rosy picture of the division's prospects, despite their knowledge of actual difficulties. Mr. Skilling was present at some of those meetings and participated actively, according to attendees and, in some cases, documents reviewed by The Wall Street Journal.

Mr. [Kenneth] Rice, along with the others, was charged with defrauding the investors while reaping millions of dollars in Enron stock sales. He is the person closest to Mr. Skilling to have been indicted in the continuing government investigation into the collapse of the onetime energy-sector highflier. Mr. Rice, who resigned from Enron before Mr. Skilling left in August 2001, worked with Mr. Skilling for more than a decade and was one of a handful of company officials who accompanied the chief executive on so-called mighty man adventure vacations to Mexico, South America and Australia.
That these dickless wonders committed fraud is hardly doubtful:
Earlier, in July 2000, Mr. Skilling, in a recorded conference call, told analysts that the broadband division was experiencing "breakout performance" in the content-service business and that the Blockbuster contract could be valued "well over $1 billion."

What listeners had no way of knowing was that the venture struggled from the start. Enron soon set up an off-balance-sheet partnership, called Braveheart, to convert into earnings a portion of the value supposedly embedded in the fledgling content-services business. The company realized more than $110 million in profit in late 2000 and early 2001, essentially with money borrowed from a Canadian bank, even though the actual underlying venture with Blockbuster had revenue, during its brief life, of only a few thousand dollars. Enron reversed those gains during the third quarter of 2001, contributing to the erosion in investor confidence that led to the company's downfall.

Later in that same July 2000 call, Mr. Skilling lauded the capabilities of Enron's fiber-optic system, claiming that it, alone, was able to deliver movies-on-demand for Blockbuster. In the conference call, Mr. Skilling said the ability to deliver "television-quality video ... is something that our entire network is devoted to." He said Enron's unique software could "control the signal ... all the way to the end user. We believe at this point we're the only people that could provide this comprehensive service to Blockbuster or anybody for that matter.... That's kind of our space, and that's the one that we want to dominate."

Whether this was hyperbole common to the technology firms at the time or constituted fraud is something prosecutors will have to decide. Even as the broadband business was collapsing, Mr. Skilling sought to allay investor concerns. "EBS is coming along just fine," he said in an earnings conference call on March 23, 2001. "We're in a situation where we clearly have a surplus in supply, and we have real fast declining prices, so that's good. In fact, that is better for us as time goes on. So EBS is looking good."

Shortly after Mr. Skilling resigned [four months later in August 2001], Enron shut down the entire broadband business and wrote off most of its investment.
Lying on this scale is no longer lying. The garbage that flowed so effortlessly from the lips of Jeffrey Skilling represents something much bigger and more harmful than lying, because it simultaneously destroyed the livelihoods and retirement savings of thousands of Enron employees — and helped to put another dickless wonder, a Texas governor who suffers from the same susceptibility to ersatz manhood (fake ranch, borrowed military uniform, etc.), into the White House.

Greatest Hits · Alternatives to First Command Financial Planning · First Command, last resort, Part 3 · Part 2 · Part 1 · Stealing $50K from a widow: Wells Real Estate · Leo Wells, REITs and divine wealth · Sex-crazed Red State teenagers · What I hate: a manifesto · Spawn of Darleen Druyun · All-American high school sex party · Why is Ken Lay smiling? · Poppy's Enron birthday party · The Saudi money laundry and the president's uncle · The sentence of Enron's John Forney · The holiness of Neil Bush's marriage · The Silence of Cheney: a poem · South Park Christians · Capitalist against Bush: Warren Buffett · Fastow childen vs. Enron children · Give your prescription money to your old boss · Neil Bush, hard-working matchmaker · Republicans against fetuses and pregnant women · Emboldened Ken Lay · Faith-based jails · Please die for me so I can skip your funeral · A brief illustrated history of the Republican Party · Nancy Victory · Soldiers become accountants · Beware the Merrill Lynch mob · Darleen Druyun's $5.7 billion surprise · First responder funding · Hoovering the country · First Command fifty percent load · Ken Lay and the Atkins diet · Halliburton WMD · Leave no CEO behind · August in Crawford · Elaine Pagels · Profitable slave labor at Halliburton · Tom Hanks + Mujahideen · Sharon & Neilsie Bush · One weekend a month, or eternity · Is the US pumping Iraqi oil to Kuwait? · Cheney's war · Seth Glickenhaus: Capitalist against Bush · Martha's blow job · Mark Belnick: Tyco Catholic nut · Cheney's deferred Halliburton compensation · Jeb sucks sugar cane · Poindexter & LifeLog · American Family Association panic · Riley Bechtel and the crony economy · The Book of Sharon (Bush) · The Art of Enron · Plunder convention · Waiting in Kuwait: Jay Garner · What's an Army private worth? · Barbara Bodine, Queen of Baghdad · Sneaky bastards at Halliburton · Golf course and barbecue military strategy · Enron at large · Recent astroturf · Cracker Chic 2 · No business like war business · Big Brother · Martha Stewart vs. Thomas White · Roger Kimball, disappointed Republican poetry fan · Cheney, Lay, Afghanistan · Terry Lynn Barton, crimes of burning · Feasting at the Cheney trough · Who would Jesus indict? · Return of the Carlyle Group · Duct tape is for little people · GOP and bad medicine · Sears Tower vs Mt Rushmore · Scared Christians · Crooked playing field · John O'Neill: The man who knew · Back to the top

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