This is the envelope-pushing precedent being set by the Justice Department in its dealings with convicted Enron executive Jeffrey Skilling - a.k.a. one of the hucksters whose rip-off schemes were responsible for, among other things, losing more than $2 billion of retirees' pension funds.

In a revised sentencing agreement announced late last week, federal prosecutors cited the "extraordinary resources" required to litigate Skilling's appeals as justification for reducing his sentence by more than 10 years. NBC News reports that in exchange, "Skilling would give up all of his remaining rights to appeal" and "he also would give up any claims to the $40 million he was ordered to forfeit" to the Enron victims fund. Reuters notes that such a sum - which will be handed over to a "depleted" victims fund - "pales in comparison" to the "$70 million Skilling has spent on legal fees."

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The possibility of a sentencing agreement was made public this week in a notice to victims of Enron's collapse.

The notice does not specify how Skilling's sentence could be impacted if an agreement is reached.

A Justice Department spokesman declined to comment. Skilling's attorney did not immediate return a phone call or email seeking comment.

Skilling was convicted in 2006 for his role in Enron's downfall and sentenced to more than 24 years.

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Brad Karp, a partner at the 737-attorney-strong Wall Street law firm, Paul, Weiss, Rifkind, Wharton & Garrison LLP, has been Citigroup’s go-to guy for fraud allegations since the company was born out of the too-big-to-fail merger of Travelers Group insurance, its myriad Wall Street investment banks, brokerage units, and Citicorp, parent of Citibank.

When the London-based private equity firm, Terra Firma, claimed it had been lied to and defrauded by Citigroup, making it overpay for the purchase of EMI, a British music label, in 2007, Karp and colleagues wrung an 8-0 decision from the jury in favor of Citigroup. Karp was also on hand to witness victory when the trustee for the bankrupt Italian dairy giant, Parmalat, charged Citigroup with fraud. Then there were fraud charges connected to Citigroup’s involvement in the collapse of WorldCom AND Enron -- along with auction rate securities, rigged stock research and understating its exposure to subprime debt by $39 billion. Karp, Karp, and more Karp.

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So perhaps that explains why the Wall Street Journal's flagship Twitter feed (as pointed out by Felix Salmon) jumped the gun this morning, reporting via a tweet practically dripping with glee that Sarbanes-Oxley had finally been vanquished!

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The other thing they have in common, of course, is Alex Gibney, who has made movies about all those subjects, including the Oscar-winner "Taxi to the Dark Side," the box-office breakthrough "Enron: The Smartest Guys in the Room" and "Gonzo: The Life and Work of Dr. Hunter S. Thompson," which wasn't a big hit but strikes me as a key work in understanding what Gibney is up to. He thrives on those oversize emotions mentioned above, channeling them into intentionally ambiguous pop documentaries that inhabit a nuanced middle ground between journalism and entertainment.

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In this Webisode, Gibney explores the elaborate money shuffle through which Abramoff channeled money from supposedly legitimate lobbying clients (like Indian tribes) through Republican PACs and Big Pharma front groups, who in turn wrote industry-friendly legislation that was passed intact by the GOP-led Congress. I'll have an interview with Gibney and more coverage of the film next week. "Casino Jack and the United States of Money" opens May 7 in major cities, but you'll only find this clip here (at least until the DVD comes out).

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Writing in Time, Christopher Hayes puts it succinctly: "Nearly every pillar institution in American society -- whether it's General Motors, Congress, Wall Street, Major League Baseball, the Catholic Church or the mainstream media -- has revealed itself to be corrupt, incompetent or both. And at the root of these failures are the people who run these institutions, the bright and industrious minds who occupy the commanding heights of our meritocratic order."

Me, I blame the combination of runaway baseball salaries, the "talented and gifted" movement in schools, and the tyranny of SAT scores. I'm only half-joking. Once free agency drove even an average third baseman's pay into the seven-figure range formerly reserved for tycoons who owned major industries or medium-size Midwestern states, practically everybody with SAT scores over 1,400 figured they deserved to earn as much as Aramis Ramirez.

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A few weeks ago, Grayson apologized for likening the death of uninsured Americans to the Holocaust. On Tuesday, he apologized for a comment he made a month ago, during an interview the radical conspiracist and radio host Alex Jones. At the time, he had called Linda Robertson, an advisor to Federal Reserve Chairman Ben Bernanke he'd had some differences with a "K Street whore."

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It was about a month ago that Grayson gave an interview to "The Alex Jones Show," which is home to a wide array of old-school right-wing conspiracy theorizing -- think the Bilderberg Group, Wall Street and Barack Obama conspiring to bring about the New World Order. You get the idea.

In the Jones interview, Grayson opined that Fed advisor Linda Robertson, with whom he has had some sharp exchanges, is a “K Street whore.”

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Fourth, risk models failed to capture the risk inherent in off-balance sheet activities, such as Structured Investment Vehicles. It seems clear now that managers of companies with large off-balance sheet exposure didn't appreciate the full magnitude of the economic risks they were exposed to; equally worrying, their counterparties were unaware of the full extent of these vehicles and, therefore, could not accurately assess the risk of doing business. Post Enron, that is quite amazing.

Italics mine. I once wrote, way back in the day, that "Who knows -- [Enron CEO Ken] Lay might even go down in history as the man who broke Wall Street!"

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For decades, the investment class and their mouthpieces in the conservative movement have been telling Americans that if only we repealed all those musty old New Deal rules and programs, then we could enjoy unprecedented prosperity. Repeated endlessly by the think tanks, magazines and academics of the right-wing machinery, this message eventually drowned out the reality-based ideas of the American liberal tradition. Although those were the ideas that had actually built this country over the past century, they were erased from public consciousness by a combination of amnesia and propaganda.

Amazingly, many and perhaps most Americans failed to perceive the deceptions in that propaganda, even after a series of horrific experiences with right-wing ideology run amok. We have been here before, after all -- or at least we have been somewhere that looked a lot like this, and not so long ago.

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Gonzo journalism pioneer Hunter S. Thompson and documentary filmmaker Alex Gibney don't seem like the most natural pairing, at least at first. Gibney's films, including the Oscar-winning "Taxi to the Dark Side" (which has produced an ugly dispute between Gibney and the film's distributor) and the Oscar-nominated "Enron: The Smartest Guys in the Room," essentially present old-school investigative journalism, filtered through a pop sensibility. Gibney himself has compared his research-intensive work to archaeology, and I doubt anyone has ever described Thompson's work in those terms.

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"We thought The Wall Street Journal was on a witch hunt of Andy Fastow," Lay testified Tuesday, referring to a series of articles the newspaper published about the partnerships beginning in October 2001.

"It was absolutely destroying the confidence investors had in the company and driving down the stock price," he added.

A time-honored ploy! Blame the media! Today, Bear-Stearns CEO Alan Schwarz attempted the same maneuver, according to Muckraked, which obtained a copy of his prepared testimony for a congressional hearing held Thursday.

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]]> http://www.salon.com/2008/04/03/bear_stearns_and_enron/feed/ 3 http://www.salon.com/2008/03/10/spitzer_fall_from_grace/ http://www.salon.com/2008/03/10/spitzer_fall_from_grace/#comments Mon, 10 Mar 2008 20:15:00 +0000 http://www.salon.com/technology/how_the_world_works//2008/03/10/spitzer_fall_from_grace

"I acted in a way that violated my obligation to my family."

Eliot Spitzer, governor of New York

As a reporter and editor who spent a good part of his career critically covering the excesses of the dot-com economy and the Enron era of runaway greed, the emergence in the early 2000s of Eliot Spitzer as a crusading attorney general, clad in shining armor and pointing his lance directly at Wall Street's biggest fat cats, was an unexpected dream. While the politicians in Washington were betraying every trust, Spitzer had the effrontery to act as if he had a responsibility to prevent the powerful from profiting at the expense of the rest of us.

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]]> http://www.salon.com/2008/03/10/spitzer_fall_from_grace/feed/ 63 http://www.salon.com/2007/08/27/gonzales_resignation/ http://www.salon.com/2007/08/27/gonzales_resignation/#comments Mon, 27 Aug 2007 18:00:00 +0000 http://www.salon.com/news/opinion//blumenthal/2007/08/27/gonzales_resignation When Alberto Gonzales swiftly turned heel on the stage at the Department of Justice without answering questions about his resignation as attorney general he left behind yet another lingering cloud of mystery. What is he not telling about his resignation?

The true story may be something like the denouement of Edgar Allan Poe's "The Purloined Letter," which was in plain sight all along, a solution that can, as Poe wrote, "escape observation by dint of being excessively obvious; and here the physical oversight is precisely analogous with the moral inapprehension by which the intellect suffers to pass unnoticed those considerations which are too obtrusively and too palpably self-evident." To be excessively obvious, Gonzales' resignation, following Karl Rove's exactly by two weeks, is the shadow of the first act.

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]]> http://www.salon.com/2007/08/27/gonzales_resignation/feed/ 64 http://www.salon.com/2007/07/06/amaranth/ http://www.salon.com/2007/07/06/amaranth/#comments Fri, 06 Jul 2007 20:15:00 +0000 http://www.salon.com/technology/how_the_world_works//2007/07/06/amaranth "Excessive Speculation in the Natural Gas Market," a 139-page report released June 25 by the United States Senate's Permanent Subcommittee on Investigations, is a masterpiece of its genre. An account of the energy market shenanigans engaged in by the now-defunct hedge fund Amaranth, the report is well-written, extensively documented, and makes a dramatically persuasive argument: A broken regulatory system allowed Amaranth the leeway to distort natural gas prices, and the system needs to be fixed.

There are two major exchanges where contracts to buy and sell natural gas futures are traded; the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange, (ICE). But there's a huge difference between the two. NYMEX is regulated, ICE isn't.

ICE has no legal obligation to monitor trading, no legal obligation to prevent manipulation or price distortion, and no legal obligation to ensure that trading is fair and orderly.

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]]> http://www.salon.com/2007/07/06/amaranth/feed/ 10 http://www.salon.com/2007/04/04/water_dereg/ http://www.salon.com/2007/04/04/water_dereg/#comments Wed, 04 Apr 2007 16:53:00 +0000 http://www.salon.com/technology/how_the_world_works//2007/04/04/water_dereg Don't blame overpopulation or climate change or environmental degradation for global water shortages, says the Financial Times; the real villains are government bureaucrats.

"The question is how to overcome political resistance to the involvement of the private sector," [said David Lloyd Owen, a British consultant].

"The water industry is one of the most conservative in the world. By and large, it is still run by bureaucrats and engineers," Mr Owen said. "There is also a passionate and well-organized lobby against privatization."

The thesis of the article is that an era of increasing drinking-water scarcity is a terrific business opportunity for companies that specialize in water treatment and desalination. Algeria, for example, is spending billions of dollars on desalination plants, "after suffering acute water shortages five years ago." Global warming, in this formulation, is just more good news for the private water sector. If only governments would get out of the way and let them serve the people.

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]]> http://www.salon.com/2007/04/04/water_dereg/feed/ 12 http://www.salon.com/2006/07/13/lay_7/ http://www.salon.com/2006/07/13/lay_7/#comments Thu, 13 Jul 2006 16:47:00 +0000 http://www.salon.com/news/politics//war_room/2006/07/13/lay In 1998, three Texas men attacked a 49-year-old African-American named James Byrd. They cut his throat, chained him to the back of a pickup truck, then dragged him along a road for several miles. Byrd was alive for at least part of the ordeal; a forensic pathologist said that Byrd lived until he hit a culvert and his arm and head were severed. His attackers dragged what was left of his body for at least an additional mile.

Gruesome? Yes, but it's apparently no worse than what happened to Ken Lay.

The former Enron chairman died of a heart attack at his vacation home in Aspen, Colo., last week. At a memorial service in Houston Wednesday -- with former President George H.W. Bush in attendance -- a local pastor likened Lay's prosecution in Enron's collapse to the attack on Byrd. "Ken Lay was neither black nor poor, as James Byrd was," said the Rev. William Lawson, pastor emeritus of the Wheeler Avenue Baptist Church. "But I'm angry because Ken was the victim of a lynching."

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