Can Someone Explain The Enron Scandal To Me?

[mekannik]

The numbers on the financial statements were pumped up to show big revenues for the company - which would in turn bring in more investors for future endeavors.

Basically they were showing $120-150 million in profits - while in actuality it was more like $80-100 million.

Enron was going under - but the falsifying of statements prompted a general loss in the trust of Enron (and Athur Anderson to some extent). Once trust was lost - investors pulled their monies out - sending the company into the tailspin. Add on the fact that top execs were "allowed" to bail out (i.e. cash in huge) while employees had their 401k's in company stock frozen... this left a very sour taste in the public's mouth.

 

[manny78]

How much you bet that if they were sentenced to be decapited in public (the Enron executives) nobody will try to screw people this way ?

 

[smallmovesal]

what exactly did enron do as a company?

 

[mekannik]

How much you bet that if they were sentenced to be decapited in public (the Enron executives) nobody will try to screw people this way ?

Interesting agrument. Barbaric, but interesting. Your choice of retribution is still used in some Islamic countries (more so for common thiefs, not the royal hierarchy - which the Enron executives would be more analogous to).

One problem your "solution" has is the amount of personal gain to be had versus the risk.

Another is trying to predict/control human nature in the face of immense personal gain.

After all - will the bloodied heads of the executives give back the 401k plans of the employees? I would think putting them on public displays of hard/menial labor (sewage comes to mind) might be more satisfying for those affected.

Or put them on an island with some video cameras, their wrists handcuffed to their ankles, and a bunch of homosexuals.

That's why I'm moving to Uganda.

 

[manny78]

After all - will the bloodied heads of the executives give back the 401k plans of the employees? I would think putting them on public displays of hard/menial labor (sewage comes to mind) might be more satisfying for those affected.

.

good point. Hard labor would be something I consider. Plus seizure of all their goods/money. hummm

 

[spongebob]

Actually VP Dick Cheney was involved with Enron, not President Bush. Cheney was (is?) on the board of directors of the company.

They falsified financial reports, earnings reports, and told employees that the company was do wonderful, when in fact it was tanking.

At the same time they exec changed the company 401(k) plan to be invested in Enron stock only and did not give their employees the opportunity to diversify.

Pebcak

no, your wrong. bush worked at enron and cheney worked for arthur anderson. bush did it.

 

[BigRugbyMan]

Actually VP Dick Cheney was involved with Enron, not President Bush. Cheney was (is?) on the board of directors of the company.

They falsified financial reports, earnings reports, and told employees that the company was do wonderful, when in fact it was tanking.

At the same time they exec changed the company 401(k) plan to be invested in Enron stock only and did not give their employees the opportunity to diversify.

Pebcak

All of you are pretty much wrong.. And to say Bush had nothing to do with it is assanine. Enron is a texas based company who happened to be Bush's top campaign contributor. It would be very foolish to think that Bush was totally blind to the situation at hand. And one must look at Arthur Anderson as well... The nation's top accounting firm falsifying/shredding documents.

Basically what happened was that Enron top execs., not necessarily Lay, created partnerships to transfer the bulk of Enron;s debt to... However one must realize that this is a perfectly accepted practice as long as it is noted in GAAP format. Contrary to belief, this information was out there. One just had to know where to look. Alot of top investors got out in due time without losses.

And don't think for one instant that any Enron employee will get legal actions against them... In reality they were unethical an very misleading, however they didn't do anything illegal. They bent the rules at every step of the way and were able to legally manipulate their financial disclosures. If anyone is going to get legal actionsm it will be Arthur Anderson accounting firm/

what exactly did enron do as a company?

And to answer your question smalls. Enron started out as an energy pioneer. They created the first intercontinental pipeline in the United Stated. Then in the latter part of the 90's they got into telecommunications with things such as broadband services.

 

[mrbill]

what exactly did enron do as a company?

originally they were an oil and gas pipeline company, then they completely changed to a trading company. they would trade just about anything, energy, internet bandwidth, etc.

 

[spongebob]

All of you are pretty much wrong.. And to say Bush had nothing to do with it is assanine. Enron is a texas based company who happened to be Bush's top campaign contributor. It would be very foolish to think that Bush was totally blind to the situation at hand. And one must look at Arthur Anderson as well... The nation's top accounting firm falsifying/shredding documents.

can you explain what bush had to do with it in detail. because he recieved campaign contributions that means he knew arthur andersen was falsifying financial statements

Basically what happened was that Enron top execs., not necessarily Lay, created partnerships to transfer the bulk of Enron;s debt to... However one must realize that this is a perfectly accepted practice as long as it is noted in GAAP format. Contrary to belief, this information was out there. One just had to know where to look. Alot of top investors got out in due time without losses.

the accounting firm falsified financial statements, common stockholders had no idea, so they didnt want to get out.

And to answer your question smalls. Enron started out as an energy pioneer. They created the first intercontinental pipeline in the United Stated. Then in the latter part of the 90's they got into telecommunications with things such as broadband services.

enron pretty much got out of the pipeline business and became an energy trading company. they also bought and sold internet bandwidth. but they made a fortune buying and selling energy.

they did not produce this energy though, they were just middlemen. they are the equilivent of a dot com company. no assets other than a handful of generating plants.

 

[Little Ty]

It is also stupid to try to pin this to Bush when everyone got kick backs from Enron, GOP and Democrats. Don't believe the 10 o clock news all the time. Check out Slick willie's connections. This excludes the many golf outings with Enron officals including Lay. Other Dems that cry foul need to check out a company called Global Crossings and Tom Daschle. It's amazing that the major networks just say what they want and purposely omit other things.

# Lots of Enron money found its way to Clinton’s accounts. "During the Clinton years, Enron contributed more than $1 million to the Democratic Party, including $600,000 to the Democratic National Committee," the Washington Times’s Patrice Hill recounted on February 21. That’s not as much soft money as was given to the GOP (more than $2 million), but it’s more than enough to get corporate chiefs the "access and influence" that self-appointed reformers find so revolting.

# Clinton’s administration loaned taxpayer money for Enron deals. Back in the ‘90s, Clinton officials boasted of a foreign policy which focused on getting deals for select U.S. businesses, including Enron. (See box.) Now bad deals, like Enron’s worthless power plant in Dabhol, India, are plaguing taxpayers. Two federal agencies — the Overseas Private Investment Corporation and the Export-Import Bank loaned campaign contributor Enron $1.2 billion during the Clinton years, most of which ($964 million) Enron hasn’t paid back yet, according to a February 21 New York Times story.