Capitalist pigs

The sordid tales of Enron plutocrats looting the company of its treasure as their employees and shareholders faced ruin are enough to turn you into a class warrior.

Topics: Enron,

A showdown is brewing in a Houston federal district court that makes most classic western face-offs look like kindergarten pillow fights.

On one side huddle 29 top Enron executives and board members who unloaded stock worth $1.1 billion over the last three years — a period during which, we now know, Enron was grossly misstating its true revenue and profit figures in its publicly available financial filings.

On the other side swagger a gaggle of class action lawyers doing their best Clint Eastwood “hang ‘em high” imitations, hired by Amalgamated Bank of Chicago — “A Union Bank for Unions and Union Members,” no less! — on behalf of pension funds and other shareholders who lost hundreds of millions of dollars when Enron collapsed. Their immediate goal: to freeze the bank accounts of those 29 Enron honchos while they go about their business convincing the judge of their mildly worded claim that “Enron is a grotesque fraud — a financial monstrosity of manipulation and falsification.”

Does class warfare get any better than this?

OK, even with the union angle, it’s a stretch to cast a bunch of big pension funds and other institutional investors in the role of the little guy who has nothing to lose but his chains. But there’s still something about this particular tussle that gets the proletarian-rage juices flowing. Treasury Secretary Paul O’Neill says that Enron’s collapse is the free market in action, evidence of the “genius of capitalism.” But in an age where the workers’ paradise of communism is remembered about as well as Herman’s Hermits, the lords of Enron somehow managed to pull off a feat so stunning one can only gape: They made capitalism look bad.

For starters, the $1.1 billion in stock gains by Enron insiders is just a conservative estimate based on what the execs were legally required to report. There are plenty of ways to get around such requirements, if you’re willing to operate in the higher altitudes of imaginative stock manipulation — a nether region where people actually understand what “zero cost collar” deals and “equity swaps” mean.



And if there’s one thing we can say with confidence about Enron executives, it’s that they weren’t afraid of such heights: If there was a dodgy, cutting-edge, “innovative” way to get around the spirit and letter of the law to be found, they were looking for it. This is a company, after all, that, in order to avoid paying federal income taxes, set up more than 800 subsidiaries in the Cayman Islands alone.

Ouch! Hanging’s too good for the likes of these rascals. In their greed to cash in, Enron’s executives didn’t just screw their own employees, shareholders, and bankers (not to mention American taxpayers); they discredited the whole system. One wonders who would be more delighted to see Ken Lay, Jeff Skilling, Andrew Fastow and the rest of these bunglers locked up in a stockade — the investors who had no idea of the extent of Enron’s shell game, or the Enron bosses’ counterparts at other “innovative” corporations, who are shuddering at the thought that their books might now get a thorough going-over by the IRS, the SEC and a legion of securities analysts. Who knows — Lay might even go down in history as the man who broke Wall Street!

Well, that’s probably not too likely. But at least we can be confident of one thing: Enron managers such as Fastow, who appears to have been the mastermind of the “special purpose entities” through which Enron hid so much of its debt and fueled so much of its growth, are going to have a hard time doing more damage over the next decade or so — they’ll be too busy defending themselves from the cascading flood of class action suits and criminal investigations bound to dog them for years to come. But is that enough of a punishment?

Drastic measures are clearly called for, if only to prevent the working people of this country from rising up in a tidal wave of wrath and swamping brokerages everywhere. After all, when one hears Robert Bennett, Lay’s lawyer, brazenly declare, “I am unaware of any evidence that supports the allegation there was improper selling by members of the board or senior management,” who wouldn’t be hard pressed not to run screaming around the streets with a hammer and sickle looking for something, anything, to expropriate?

The evidence is rapidly piling up that Enron’s executives sold stock when they already knew hard times were coming, that they lied about the financial health of their company to their employees, their shareholders and the analysts responsible for covering them and that they ignored the entreaties of some of their own in-house colleagues who begged them to clean up the mess before it was too late. When a senior staff attorney goes to the extraordinary lengths of secretly hiring outside counsel to determine whether Enron’s accounting practices are legal, you know things are pretty rotten.

If ever there was a case where a class action suit appeared to have a slam dunk chance of success, this would be the one. It’s also inconceivable that there won’t be substantive changes to accounting regulations and SEC reporting requirements as a result of the Enron implosion. But what about the 29 executives and board members (who, by the way, include Wendy Gramm, Sen. Phil Gramm’s wife): Will they serve jail time? Will they be forced to pay fines that make any kind of dent in the millions they’ve socked away? Will their lives be ruined, like the thousands of their employees who’ve lost their jobs and life savings?

Or do they already have enough cash to keep them safe from harm, no matter what happens? The Aspen Times reported on Tuesday that Ken Lay has put two of his three Aspen homes, as well as an empty lot, up for sale — for a total asking price of $16 million. But he’s still keeping one — his personal residence. Yup, he’s really feeling the pinch.

It’s going to be a fun time in that Houston courtroom this spring and summer, as the more than 60 class action suits already filed join together, and congressional inquiries continue to heat up. At the very least, one hopes that the Enron 29 will start to sweat.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    Ten spectacular graphic novels from 2014

    Beautiful Darkness by Fabien Vehlmann & Kerascoët
    Kerascoët's lovely, delicate pen-and-watercolor art -- all intricate botanicals, big eyes and flowing hair -- gives this fairy story a deceptively pretty finish. You find out quickly, however, that these are the heartless and heedless fairies of folk legend, not the sentimental sprites beloved by the Victorians and Disney fans. A host of tiny hominid creatures must learn to survive in the forest after fleeing their former home -- a little girl who lies dead in the woods. The main character, Aurora, tries to organize the group into a community, but most of her cohort is too capricious, lazy and selfish to participate for long. There's no real moral to this story, which is refreshing in itself, beyond the perpetual lessons that life is hard and you have to be careful whom you trust. Never has ugly truth been given a prettier face.

    Ten spectacular graphic novels from 2014

    Climate Changed: A Personal Journey Through the Science by Philippe Squarzoni
    Squarzoni is a French cartoonist who makes nonfiction graphic novels about contemporary issues and politics. While finishing up a book about France under Jacques Chirac, he realized that when it came to environmental policy, he didn't know what he was talking about. "Climate Changed" is the result of his efforts to understand what has been happening to the planet, a striking combination of memoir and data that ruminates on a notoriously elusive, difficult and even imponderable subject. Panels of talking heads dispensing information (or Squarzoni discussing the issues with his partner) are juxtaposed with detailed and meticulous yet lyrical scenes from the author's childhood, the countryside where he takes a holiday and a visit to New York. He uses his own unreachable past as a way to grasp the imminent transformation of the Earth. The result is both enlightening and unexpectedly moving.

    Ten spectacular graphic novels from 2014

    Here by Richard McGuire
    A six-page version of this innovative work by a regular contributor to the New Yorker first appeared in RAW magazine 25 years ago. Each two-page spread depicts a single place, sometimes occupied by a corner of a room, over the course of 4 billion years. The oldest image is a blur of pink and purple gases; others depict hazmat-suited explorers from 300 years in the future. Inset images show the changing decor and inhabitants of the house throughout its existence: family photos, quarrels, kids in Halloween costumes, a woman reading a book, a cat walking across the floor. The cumulative effect is serene and ravishing, an intimation of the immensity of time and the wonder embodied in the humblest things.

    Ten spectacular graphic novels from 2014

    Kill My Mother by Jules Feiffer
    The legendary Pulitzer Prize-winning cartoonist delivers his debut graphic novel at 85, a deliriously over-the-top blend of classic movie noir and melodrama that roams from chiaroscuro Bay City to Hollywood to a USO gig in the Pacific theater of World War II. There's a burnt-out drunk of a private eye, but the story is soon commandeered by a multigenerational collection of ferocious women, including a mysterious chanteuse who never speaks, a radio comedy writer who makes a childhood friend the butt of a hit series and a ruthless dame intent on making her whiny coward of a husband into a star. There are disguises, musical numbers and plenty of gunfights, but the drawing is the main attraction. Nobody convey's bodies in motion more thrillingly than Feiffer, whether they're dancing, running or duking it out. The kid has promise.

    Ten spectacular graphic novels from 2014

    The Motherless Oven by Rob Davis
    This is a weird one, but in the nervy surreal way that word-playful novels like "A Clockwork Orange" or "Ulysses" are weird. The main character, a teenage schoolboy named Scarper Lee, lives in a world where it rains knives and people make their own parents, contraptions that can be anything from a tiny figurine stashable in a pocket to biomorphic boiler-like entities that seem to have escaped from Dr. Seuss' nightmares. Their homes are crammed with gadgets they call gods and instead of TV they watch a hulu-hoop-size wheel of repeating images that changes with the day of the week. They also know their own "death day," and Scarper's is coming up fast. Maybe that's why he runs off with the new girl at school, a real troublemaker, and the obscurely dysfunctional Castro, whose mother is a cageful of talking parakeets. A solid towline of teenage angst holds this manically inventive vision together, and proves that some graphic novels can rival the text-only kind at their own game.

    Ten spectacular graphic novels from 2014

    NOBROW 9: It's Oh So Quiet
    For each issue, the anthology magazine put out by this adventurous U.K.-based publisher of independent graphic design, illustration and comics gives 45 artists a four-color palette and a theme. In the ninth issue, the theme is silence, and the results are magnificent and full of surprises. The comics, each told in images only, range from atmospheric to trippy to jokey to melancholy to epic to creepy. But the two-page illustrations are even more powerful, even if it's not always easy to see how they pertain to the overall concept of silence. Well, except perhaps for the fact that so many of them left me utterly dumbstruck with visual delight.

    Ten spectacular graphic novels from 2014

    Over Easy by Mimi Pond
    When Pond was a broke art student in the 1970s, she took a job at a neighborhood breakfast spot in Oakland, a place with good food, splendid coffee and an endlessly entertaining crew of short-order cooks, waitresses, dishwashers and regular customers. This graphic memoir, influenced by the work of Pond's friend, Alison Bechdel, captures the funky ethos of the time, when hippies, punks and disco aficionados mingled in a Bay Area at the height of its eccentricity. The staff of the Imperial Cafe were forever swapping wisecracks and hopping in and out of each other's beds, which makes them more or less like every restaurant team in history. There's an intoxicating esprit de corps to a well-run everyday joint like the Imperial Cafe, and never has the delight in being part of it been more winningly portrayed.

    Ten spectacular graphic novels from 2014

    The Shadow Hero by Gene Luen Yang and Sonny Liew
    You don't have to be a superhero fan to be utterly charmed by Yang and Liew's revival of a little-known character created in the 1940s by the cartoonist Chu Hing. This version of the Green Turtle, however, is rich in characterization, comedy and luscious period detail from the Chinatown of "San Incendio" (a ringer for San Francisco). Hank, son of a mild-mannered grocer, would like to follow in his father's footsteps, but his restless mother (the book's best character and drawn with masterful nuance by Liew) has other ideas after her thrilling encounter with a superhero. Yang's story effortlessly folds pathos into humor without stooping to either slapstick or cheap "darkness." This is that rare tribute that far surpasses the thing it celebrates.

    Ten spectacular graphic novels from 2014

    Shoplifter by Michael Cho
    Corinna Park, former English major, works, unhappily, in a Toronto advertising agency. When the dissatisfaction of the past five years begins to oppress her, she lets off steam by pilfering magazines from a local convenience store. Cho's moody character study is as much about city life as it is about Corinna. He depicts her falling asleep in front of the TV in her condo, brooding on the subway, roaming the crowded streets after a budding romance goes awry. Like a great short story, this is a simple tale of a young woman figuring out how to get her life back, but if feels as if it contains so much of contemporary existence -- its comforts, its loneliness, its self-deceptions -- suspended in wintery amber.

    Ten spectacular graphic novels from 2014

    Through the Woods by Emily Carroll
    This collection of archetypal horror, fairy and ghost stories, all about young girls, comes lushly decked in Carroll's inky black, snowy white and blood-scarlet art. A young bride hears her predecessor's bones singing from under the floorboards, two friends make the mistake of pretending to summon the spirits of the dead, a family of orphaned siblings disappears one by one into the winter nights. Carroll's color-saturated images can be jagged, ornate and gruesome, but she also knows how to chill with absence, shadows and a single staring eye. Literary readers who cherish the work of Kelly Link or the late Angela Carter's collection, "The Bloody Chamber," will adore the violent beauty on these pages.

  • Recent Slide Shows

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>