BusinessBusiness RecoveryEnron: ‘a strange dark time’

Enron: 'a strange dark time'

Just as Andersen's conviction is overturned, a documentary about Enron's collapse is causing many to revisit history's most notorious accounting scandal. A BBC correspondent in the US at the time, recalls the events in Houston three years ago

The lights were on at Enron, but no one was home. I was in Texas to cover the
death and destruction at Arthur Andersen, and began my search in Houston for the
principal players.

The city, much like Enron’s building, relies on a network of underground
tunnels to keep inhabitants out of the scorching heat. The company’s corporate
skyscraper punctured the skyline as court proceedings began nearby.

It had been the biggest accounting fraud since mathematics was invented.
Thousands of innocent executives at Andersen were going down with it, and
everyone in the industry must have known someone who was affected.

Anyone holding shares anywhere in the world was certainly affected too. Enron
fired the starting gun on a string of corporate accounting scandals that did
more damage to the value of shares than the attacks on the twin towers in 2001.

So, when an invitation arrived recently from Texas to view a new movie based
on the whole fiasco, I found myself thinking back to those days. My life, like
most of those at Andersen, has moved on since, but somehow I remain on an email
list belonging to some of the groups who tried to pick up the pieces.

‘Dear Patrick, you are invited to join the screening of Enron: the
Smartest Guys in the Room
in Houston, I looked at the information on my
screen, and felt at once that it all seemed so recent, yet so distant too.

Yes, it had been a massacre of the reputation of corporate governance, but
was the movie really coming out now? I ask this because it is hard to imagine
what it would be like to watch that film in Houston. The city was built on
massive corporations, the baseball stadium was called Enron Field, and its
citizens will watch a dramatised version of places they live in, and of people
they live next to, make love to or see in the mirror.

It’s likely that such a film will resonate in a grotesque way throughout
accountancy too. Imagine a cinema filled with an audience drawn from all walks
of life, then pick out the faces of accountants. Like those people who watch war
epics and tell you the tanks were all wrong, will you be shaking your head
telling those around you ‘It’s all Hollywood. It just couldn’t work that way’?

Weak, sentimental thing that I am, my memories were all stirred up by that
single email. Let me share them with you.

The doorbell sounded. The dry Houston air left me sweating and the glare from
the pavement made me squint as I waited. But there was no reply from the wife of
Ken Lay, the man who ran Enron. Linda Lay had opened a shop – ‘Jus Stuff’ – and
I was standing outside with a cameraman. I’d seen her car outside and could see
heads ducking between the blinds at the rear.

I knocked loudly and rang the bell again. She was selling bric-a-brac from
their homes, and was, as Tammy Wynette famously crooned, standing by her man. I
intended to secure the first interview for British TV, and I wanted to look her
in the eye, and come to my own conclusions.

Two minutes later, the door opened a crack, and I was staring into the face
of a uniformed policeman. The long arm of the law later put Ken Lay in
handcuffs, but now seemed to be protecting his wife from unwanted intrusion.

‘Mrs Lay is here, but she will not be talking to you. Please move on, sir.’

The great Texan courtesy contrasted with the message. There in front of me
was a man with a gun, standing in a shop in the city where scandal was rising
faster than the temperature. What was the woman doing opening a store if she
didn’t want to meet the customers?

I drove to one of their homes nearby, and was moved on again. The Lays
weren’t speaking, but the man from Arthur Andersen most certainly was. He was in
court and I was filling the hours waiting for his arrival.

David Duncan was the former Andersen partner who headed the Enron audit team.
He had admitted obstructing justice and later told a jury he had signed an
agreement with Andersen to present a united front.

Andersen’s shredding of Enron documents was always going to startle a jury.
It had startled me. But I thought it would be a different story to convict an
entire firm.

So perhaps that’s just one of the reasons why it has now become a movie. It
must have seemed like a horror flick to the innocent Andersen accountants
working far away. Some of whom might even have confessed they’d never heard of
Enron before.

I often wonder if in Britain and across the world, former employees meet up
and talk about the old times. I know several friends who worked for Andersen,
and I haven’t asked them about it in years. People met and got married there,
began and ended their careers there, were young and hungry graduates there. Do
they keep business cards, old stationary or carry old corporate pens?

All have new jobs, but have they all moved on? Do some still wonder about
that place called Houston and that courthouse where I arrived at full of
questions? Will small clusters of high-powered accountants, now engaged in busy
and successful careers elsewhere, meet up at the movies? You see, I blame that
one email from Houston for raking this all up, and reminding me of that strange
dark time.

History, of course, records that the whole firm was indicted in the end:
tragic, scandalous, and the innocent and the guilty falling together. In my
mind, I’m leaving that movie screening asking ‘Surely it couldn’t have happened
that way?’

It all seems so long ago, and yet so recent too.

Paddy O’Connell is a television journalist

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