Who’s picking at the Enron carcass?

It wouldn’t be America unless someone was trying to make a buck – or several hundred million of them – from the collapse of Enron.

Even before the first clod of soil lands on America’s biggest-ever corporate casket, there’s already a lot of unseemly pushing, and shoving going on as the heirs’ apparent get ready to carve up what’s left of the estate.

Even cynical American investors wouldn’t be surprised to learn that the cast of characters that got them into this mess – politicians, lobbyists, lawyers, auditors, investment banks – are also among the first trying to make hay.

As for the poor pensioners whose schemes were stuffed full of useless Enron stock; well, precedents abound both sides of the Atlantic on what happens to them.

Sure, there will be the usual expressions of moral indignation about their fate, the lengthy inquiries, followed by the recommendations and the watered-down amendments to laws.

Britons only have to recall what happened to the pensioners who were ripped-off by Robert Maxwell’s shenanigans.

For them the whole process took far too long, for far too little and, after several years of foot-dragging, too late to be of any benefit to many of the disgraced press baron’s victims.

Fortunately for competing energy companies, there’s no such regulatory or time constraints. The collapse of the Houston-based energy companies has meant a bonanza as they scramble to fill the void left by the demise of the largest player in the $2 trillion world of energy contracts.

The legal profession has launched a blitzkrieg of legal artillery at every possible target in an attempt to pull what they can from the collapse of America’s seventh-largest corporation.

Rival accountancy firms are also assessing how they can benefit from the daily damage currently being inflicted on Andersen, the 88-year old accounting giant, that is looking like it might soon be touched by another corporate failure – its own. This scandal may lose Andersen its ‘meat and potatoes’ auditing work.

The Chicago-based accounting and consulting giant had just begun to emerge from the scandal’s involving Sunbeam’s Albert ‘chainsaw’ Dunlap and charges that it had issued false and misleading reports on behalf of Waste Management.

If there had been a funeral for Enron then you might expect politicians and regulators from all hues and persuasions to have attended the wake – but only to make sure it was truly dead. The beneficiaries of the energy giant’s largesse are digging their own holes to take cover.

Even the latest ‘Pinocchio’ President, George Bush, has been mouthing some pretzel logic as he attempts to distance himself from his ‘good’ol’boy’ buddy, Kenneth Lay, the former chairman of Enron, who made generous donations to both his campaign and some $100,000 to defray the cost of his Presidential inaugural celebrations.

Then there’s the billion-dollar Washington lobbying machine that has already gone into overdrive in a bid to protect the Wall Street bankers and analysts from any attempts to impose stricter oversight or increase liability for their actions.

Is this what White House adviser Lawrence Lindsey meant when he called the Enron collapse a ‘tribute to American capitalism’?

  • Duncan Hughes is a journalist based in New York. This is the first in a series of regular columns that he will be writing for Accountancy Age.

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