Enron

A s the century's sleazy first decade coasted to a finish, medicine was perhaps the only profession to emerge unslimed. Wall Street and bond raters caused 10 percent unemployment. Businesses cooked books. Journalists fabricated. Priests abused. Intelligence analysts found fantasy nukes. But doctors, again near the top of last year's Gallup "honesty and ethics" poll, may be prepping for their own Enron moment. Allegations that hundreds of patients at St. Joseph Medical Center received what might have been unneeded heart stents would, if true, combine Bernard Madoff-style fraud with Toyota-style injury.

Columnist Marta H. Mossburg appears to agree with psychiatrist Charles Murray, author of a controversial 1994 study of race an intelligence, that if people don't "make it" in the United States it's because they are not good enough ("A failure of values, not economics," Feb. 15). She embraces Mr. Murray's latest attempt to prove the superiority of whites, or at least some whites. Mr. Murray's "Coming Apart: The State of White America, 1960 to 2010" argues that since the 1960s America's white population has divided into two groups, one fairly small, highly educated, wealthy, married and geographically isolated from the rest of the country, the other poor, single, with little education and encompassing the vast majority of citizens.

HOUSTON -- The judge presiding over the fraud trial of former Enron Corp. top executives Kenneth L. Lay and Jeffrey K. Skilling stopped a bid by Lay's lawyer yesterday to shift the focus of the trial onto the misdeeds of an Enron subordinate. U.S. District Judge Simeon T. Lake III sustained prosecutors' objections to questions by Michael Ramsey, Lay's lead defense lawyer, about off-book partnerships created by former finance chief Andrew S. Fastow to do Enron-related deals. Fastow has pleaded guilty to a fraud charge stemming from Enron's collapse and is expected to testify for the prosecution.

Former Prince George's County schools chief Andre Hornsby could see his jail time reduced after a federal appeals court Wednesday reversed three fraud convictions in his corruption case. The 4th U.S. Circuit Court of Appeals reversed his three 2008 "honest-services wire fraud" convictions based on a new interpretation of the law stemming from a 2010 Supreme Court decision in the case of former Enron President Jeffrey Skilling. Hornsby's other convictions on witness and evidence tampering and obstruction of justice charges were upheld.

WASHINGTON -- In watching the Enron hearings, it seems a shame that we don't have a live, on-air analyst such as at Olympic skating events to describe the sheer brilliance of some of the moves of the congressional committee members. Without a guide, a viewer is often unaware of the level of difficulty of previously Enron-sponsored members performing demonstrations of public interest. For these members, the transformation from Enron advocates to public advocates is akin to a triple-axel jump while holding an overstuffed bank bag. The Enron hearings have actually shown Congress at the top of its game as the master of investigations.

WASHINGTON - Why is Enron Corp. still eligible to receive U.S. taxpayer money? Instead of wallowing in bankruptcy, Enron continues to do business internationally. And the scandal-ridden and discredited corporation continues to pursue public funding for its global operations. Reports about Enron's collapse have led people to believe that the corporation is defunct. Not true. Enron's decision to file for Chapter 11 bankruptcy protection forced the company to forfeit its energy trading operations in the United States and to sell some of its assets.

BOSTON -- Every election year, I have the same theological insight: If God had meant for me to watch political ads, He never would have invented the remote control. Click. Nevertheless, occasionally something penetrates the glaze that comes over my eyes when one candidate is bashing the other. This year, it's an ad running in the Massachusetts governor's race. The 30-second cartoon features a watchdog asleep on the job while some very corporate-looking men loot a vault marked "State Treasury."

Anatomy of Greed: The Unshredded Truth From an Enron Insider, by Brian Cruver. Carroll & Graf Publishers. 366 pages. $25. Brian Cruver's book is the first tell-all dish by an Enron insider, a diligent piece of scribing produced in about six months. Unfortunately, he doesn't have much to tell. His role at the energy company was negligible. The 29-year-old University of Texas MBA grad worked at Enron's "Death Star" headquarters, trying unsuccessfully to develop bankruptcy-risk derivatives, which were among the complex financial contracts the Houston firm specialized in. But he was far from Enron's most scandalous doings, in a job lasting less than nine months.

THE collapse of Enron was so complex that even the energy giant's top bosses didn't understand what was going on. The company dealt in industries as diverse as energy, water, advertising and newsprint. It conducted secret business with its own top executives, and its trading strategies were mud to anybody who didn't simultaneously understand stochastic calculus and the market for the relevant product. Last August, a reporter asked about Enron's ties to partnerships controlled by Chief Financial Officer Andrew S. Fastow, and Enron Chairman Kenneth L. Lay replied, "You're getting way over my head."

WASHINGTON - Washington - narcissistic and even solipsistic, as usual - thinks Enron's collapse is primarily a Washington, meaning a political, story. Actually, the debacle is, so far, primarily a tale of two other cities. Houston is Enron's hometown. New York is the center of the financial system that Arthur Andersen is supposed to serve. Andersen is the document-destroying accounting firm that failed - assuming, generously, that it tried - to report accurately Enron's activities. However, Washington will star in subsequent acts of this drama that may live on, in litigation, longer than anyone reading this column.

It wouldn't be an O'Malley governorship if the state didn't take a few swipes at Constellation Energy boss Mayo Shattuck as it prepares to challenge the company's proposed takeover by Exelon Corp. Shattuck and O'Malley have a long history of friction. True to form, Gov. Martin O'Malley's lawyer recently aimed several pointed questions at Christopher Crane, Exelon's president, about how Shattuck negotiated the deal, whether quid pro quos were offered, and what Shattuck's role would be at the merged company.

You didn't need to be Ralph Nader or Michael Moore to be deeply disturbed by corporate behavior over the past decade. Bristling libertarians and bouncy chamber-of-commerce types alike — if they are thoughtful and honest — have questioned their convictions and changed their assumptions. So have pro-business newspaper columnists. The Enron scandal "had little to do" with stock options, I wrote in 2002. I supported the sale of the nonprofit CareFirst BlueCross BlueShield to the for-profit WellPoint Inc. the same year.

A s the century's sleazy first decade coasted to a finish, medicine was perhaps the only profession to emerge unslimed. Wall Street and bond raters caused 10 percent unemployment. Businesses cooked books. Journalists fabricated. Priests abused. Intelligence analysts found fantasy nukes. But doctors, again near the top of last year's Gallup "honesty and ethics" poll, may be prepping for their own Enron moment. Allegations that hundreds of patients at St. Joseph Medical Center received what might have been unneeded heart stents would, if true, combine Bernard Madoff-style fraud with Toyota-style injury.

WASHINGTON - The Supreme Court appeared troubled Monday by the selection of the jury that convicted former Enron CEO Jeffrey Skilling as well as the use of a federal fraud law against him. Several justices appeared receptive to arguments by Skilling's lawyer that he did not have a fair trial in Houston, Enron's hometown, following the energy company's 2001 collapse that cost thousands of jobs and billions of dollars. Amid concern that the trial judge spent too little time questioning prospective jurors, Justice Stephen Breyer said, "I'm worried about a fair trial in this instance."

No wonder Constellation Energy CEO Mayo Shattuck wanted to merge two years ago with FPL Group of Florida. Just as Merrill Lynch sought solace in the arms of Bank of America over the weekend, just as Lehman Brothers looked in vain for a stable partner, Shattuck knew even back then he might need to tether his own indebted financial empire to something solid. As this week's sobering events have proven, companies relying on market bets for big pieces of their profits are iffy long-term prospects.

WASHINGTON -- The Securities and Exchange Commission is suing former Enron Corp. attorneys Rex R. Rogers and Jordan H. Mintz, accusing them of hiding fraud at the company whose collapse wiped out at least $1 billion in retirement funds. Rogers, as an Enron associate corporate counsel, and Mintz, as general counsel for its global finance division, helped cover up the energy trader's financial troubles by omitting required disclosures from public filings in 2000 and 2001, the SEC said in a lawsuit at U.S. District Court in Houston yesterday.

HOUSTON -- A federal judge sentenced one-time Enron Corp. Chief Financial Officer Andrew S. Fastow to six years in prison yesterday for his role in running the fraudulent, off-the-books dealings that brought down the company while he made millions. But the judge stopped short of meting out the maximum term, citing Fastow's contrition and his cooperation with the government. In 2004, Fastow agreed to serve as many as 10 years in exchange for testifying against the former top executives of the fallen energy company.

WASHINGTON -- For all the furor over the meetings of embattled Enron officials with President Bush, Vice President Dick Cheney and other Bush administration officials, it's too early to say, as the Democrats claim, that the country is dealing with another Watergate affair or even another Whitewater. Important business leaders are forever phoning high government officials from the president on down, seeking help of one sort or another. In the Republican Party particularly, it's a routine thing in light of the many philosophical viewpoints shared.

HOUSTON -- Richard Causey, Enron Corp.'s former top accountant whose affable nature earned him the nickname of "Pillsbury Doughboy" at a company known for its ruthless culture, will serve 5 1/2 years in prison for his role in perpetuating its sprawling fraud. "There were improper things done at Enron. Some of those things were done by me, and for that I am profoundly sorry," a visibly nervous Causey told U.S. District Judge Simeon Lake before learning his punishment. "However, as God is my witness, I never did anything to enrich myself," Causey said.

Now that Enron CEO Jeffrey K. Skilling has been sentenced (and thus fallen out of the news), the rumblings of discontent over Sarbanes-Oxley are getting louder. Much of corporate America detests SOX, as it's often called, because the law's accounting requirements are extensive and costly. They argue that it was an overreaction to the recent accounting and governance scandals and that Washington needs to amp down the reforms. At least the language of protest is cautious - so far. President Bush says he wants the law fine-tuned.