The people have spoken. Kenneth Lay and Jeffrey Skilling are guilty, guilty, guilty. You name it: conspiracy, wire fraud, securities fraud. Lay was convicted on all counts. Skilling was convicted on 18 counts of conspiracy and fraud.
Let's hope that chief executives everywhere feel uneasy on their thrones. Because the ramifications of this verdict are profound. More than any other corporation, Enron symbolized a culture of greed and arrogance that made mockery of the values of a civilized society. From its "rank-and-yank" treatment of workers to its scorn for government regulation to its elevation of the scruple-free, gunslinging trader into highflying culture hero, Enron declared with every step: We know best; we are the state of the art of modern capitalism. Follow us to the future, or suck on our exhaust.
And at its height, the company was lauded for its balls-out braggadocio. The business press fawned over it: Fortune magazine named it "most innovative corporation" in America six years in a row. Lay hobnobbed with presidents and was considered on the shortlist for energy secretary. Skilling was the Harvard-educated, McKinsey-trained "genius" who created brand-new markets with the wave of a hand. Enron was endlessly innovative, endlessly creative, endlessly profitable. Enron was what all companies aspired to be, if only those darned governments would get out of the way and let them run free.
Except now we know, Enron was run by incompetent crooks. Enron lost billions of dollars. Enron didn't know best, Enron, in truth, was pathetically managed. Enron was the worst that America can be.
It's possible, in the fantasy world that Lay and Skilling evidently live in, that the two may have believed in their own defense -- that Enron was the powerless victim of a financial press feeding frenzy and Wall Street short-sellers eager to capitalize on Enron's declining stock value. And really, who would have been surprised if they had pulled it off, and walked out of the courtroom today grinning like bandits? To anyone who delved deep into the Enron saga, who has read a handful of the scores of books that have already been written about the company, or followed the painstaking day-by-day unveiling of the company's astounding machinations in the financial press, the defense was ludicrous. But hey, lots of ludicrous things happen in the United States every day.
Enron was a self-contained corporate version of a Ponzi scheme. As it moved out of its original business transporting and selling natural gas into one new market after another -- water, pulp, bandwidth, weather and credit derivatives -- it started hemorrhaging cash. It covered up its losses with "innovative" new schemes such as selling off company assets to private partnerships that were actually run by company executives. Inside the corporation, scores of voices warned against the path being taken. The whistle-blowers were ignored or transferred to jobs where they couldn't make trouble.
We will hear now, once again, that Enron was just a bad apple (although in the context of the corporate scandals of the turn of the century, it's abundantly clear something was rotten at the core of the entire harvest). And it is true, Enron had all the trappings of plain old venial sin. As Robert Bryce documents in his entertaining "Pipe Dreams: Greed, Ego, and the Death of Enron," Enron's executives wasted millions on corporate jets and strip clubs, cheated on their wives, and fought one another within the company like crazed wolverines.
But that's just surface froth. Far more important to the story of Enron is the story of its ideology.
Ken Lay and Jeff Skilling were men on a mission. Enron was an avatar of deregulation, the culmination of a quarter-century of political change that raised the icon of Corporation up onto a pedestal above every other element of society. Let the market have its way, and all would be well. Traders operating with as little supervision as possible would handle everything. Of course, when you're in the business of creating new trading markets out of thin air for things like Internet bandwidth, you hope no one is looking too closely over your shoulder. But Enron's pull was great enough to affect public policy -- to ensure that the government didn't look too hard at the fast-evolving arcane world of derivatives trading that Enron was plunging into.
It was fun to watch, five years ago, as George W. Bush distanced himself as fast as he could from his old pal "Kenny Boy." But there's no distancing oneself from the ideology that Lay pushed.
The people should take notice. Twelve jurors saw through Lay and Skilling's self-serving lies and deceptions and found them guilty. That should be a wake-up call. In this administration, more than any other in living memory, business executives with the morals and beliefs of Lay and Skilling have been given the keys to the palace. They run the government departments that are supposed to regulate their industries. They write the trade treaties that the U.S. signs with other countries, specifically so as to ensure their own greater opportunities to profit. They are hard at work eviscerating environmental rules, resisting calls for greater government scrutiny of their affairs, and even chafing to roll back the few new restrictions on their operating freedom (like the accounting regulation Sarbanes-Oxley) that did result from the corporate scandals that rocked the world half a decade ago.
Skilling and Lay may be guilty, but the spirit of Enron is alive and well in the White House and Congress. It's time to find them all guilty. Including, naturally, the executive at the very top, the man who doesn't listen to what he doesn't want to hear, makes up evidence to get his way, spends far more than he earns, and tries to cover it all up with misdirection and a folksy smile. Kenny Boy looks like he's down for the count. Who's next?