Enron shows need for renewed vigilance

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HOUSTON -- Former Enron chief executive Jeffrey K. Skilling stands at attention in the hallway of Houston's Federal Building, carefully straightening his tie and arranging his right sleeve as he chats with lawyers.

Former Enron Chairman Kenneth L. Lay steps out of the elevator with his wife, Linda, moves quickly down the hall and into the courtroom.

Soon members of the jury, dressed in casual attire of bright colors and stripes, shuffle into the high-ceilinged, dark-paneled courtroom. U.S. District Judge Simeon T. Lake III, a trim, dark-haired man with conservative dark-rimmed glasses, enters.

The financial trial focuses on the activities of Skilling and Lay, who pleaded not guilty to charges of fraud and conspiracy in the Enron collapse.

Television cameras lurk out on the street to snare media stars Skilling and Lay later, but the courtroom atmosphere is low-key. There are tables for teams of lawyers and several rows of hard, dark-wood pews for relatives and journalists. A 25-foot-high projection screen displays internal memos and e-mails presented by the prosecution as evidence of misrepresentation, including a Skilling message stating, "We are not a trading company, we are a logistics company."

Lay somberly rests his chin in his hand and occasionally clicks his ballpoint pen as he listens to testimony. Skilling sits erect and sips from a Styrofoam cup as he stares intently at each witness.

On this particular day, David W. Delainey, former head of the company's North American trading division, was talking about hiding speculative trading and manipulating reserves to paint a deceptively rosy picture for investors. Delainey and prosecution witness Andrew S. Fastow, a former Enron chief financial officer, each testified for the government as part of cooperation agreements.

As I sat on that hard courtroom bench watching Skilling and Lay, it occurred to me that whatever happens to these former corporate titans isn't what's most important, since the damage is already done to Enron investors and employees. The legacy of these two, in a perverse way, will be their positive impact on American investment.

Tougher securities rules and greater executive accountability resulted from the tragedy of Enron. Companies today religiously file 8-K "material event" information and frequently correct past earnings statements. Right now, somewhere, other executives are treating investor money like a kid's sport to make them rich. As a result, the vigilance of investors, employees, regulators and journalists in keeping firms honest must extend far beyond this unfolding courtroom drama in Houston.

Andrew Leckey writes for Tribune Media Services.

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