Powers Unfiltered

An entrepreneur’s journey into grid computing and partnering with Microsoft, by John Powers

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Enron Absurdity of the Week

May 22nd, 2006 · No Comments

There is a stirring moment in the movie version of the Return of the King in which Aragorn rallies his troops in the face of nearly impossible odds.  As the hordes of Mordor pour out of the black gate, he roars: 

“A day may come when the courage of men fails, when we forsake our friends and break all bonds of fellowship, but it is not this day. An hour of wolves and shattered shields, when the age of men comes crashing down, but it is not this day. This day we fight!”

Facing similarly impossible odds during closing arguments, Ken Lay’s defense attourney Michael Ramsey borrowed from Aragorn’s playbook as he addressed the jury:

“There may be a court in America that bends to political pressure but it’s not this court! There may come a day when an American jury yields to a media mob, but it’s not this jury.”

Rhetorical similarities aside, the difference here, in my opinion, is that Mr. Ramsey’s impossible odds have been brought on by the actions of his own client.  Hey Mr. Ramsey — you’re defending the bad guys.  Don’t steal the good guys’ lines.

Now of course, my charge that Mr. Lay and Mr. Skilling are “the bad guys” is just my opinion, but my opinion is backed up by considerable personal experience.  As many of you may know, I worked in the utility industry for many years.  I have heard the claim that Enron was made up primarily of honest, hard-working folks trying to earn a living, and I have no doubt there’s some truth to that — I met many at Enron who met this description.  But there were also many who did not. 

A few years ago I had the privilige of working on projects that helped to unravel certain aspects of the California electricity crisis of 2000-2001.  Enron’s part in that disaster is now a matter of public record, and some of the most directly involved plead guilty to wire fraud.  I got to see records of Enron’s trading practices firsthand.  I got to listen to recorded phone conversations of Enron traders firsthand (although I never heard this one; I’ll have to go hunt it down.  You used to be able to get much of the whole zillion-hour set at the FERC Web site; some of it is still here, but I thought there was more…). 

I still have friends at Portland General Electric — acquired by Enron when Enron’s market cap was soaring — who saw their 401Ks evaporate as Ken Lay extolled the virtues of Enron stock.  When I worked at PGE for three years in the early 80s, the company was a fine example of the type of ordinary, basically functional and professional organization that ran the utility industry for many decades.  In a period of less than 90 days in 2001, life savings were essentially wiped out. (You can read this and many other references for this sad story.) 

I am not following the trial of Mr. Skilling and Mr. Lay in enough detail to have much of an opinion of their guilt or innocence of the specific charges involved; the feds have made their choices about what charges to bring and how to prosecute them.  But make no mistake — these two men led an organization that brought enormous harm to a very large number of people.  They set the tone for their many underlings, including Fastow and Causey and Belden and Richter and Forney and Boyle and the rest

The buck stops with Lay and Skilling.  A day may come when Mr. Ramsey can convince an audience otherwise, but it is not this day.

Tags: Utility Industry

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