Enron: The Smartest Guys In The Room
The Enron scandal was led by a group of men who believed they could get away with anything. Ken Lay, the founder and chairman of Enron, hired Jeff Skilling to be the CEO because of his risky ideas. Enron had slowly become the major power and energy company of the United States. Jeff Skilling had the idea that would change the way of delivering energy by trading it instead of using pipelines. He called for a Mark to Marketing Accounting. This type of accounting made it easy to manipulate the numbers of Enron’s income. They were able to easily lie about what they were actually making and everybody just believed what they said was true. Andy Fastow, believed to be the most important part of the scandal, was the Chief Financial Officer. His job was to cover up the fact that Enron was not making money. The stock market prices became the most crucial factor for Enron. As long as stock market prices were high then Lay, Skilling, and Fastow could make millions of dollars. Enron was losing millions of dollars each quarter, but the stock prices remained high because everyone believed they were making money. According to their numbers they were because Fastow was able to get the lawyers, accountants, and bank investors to keep quiet. He did this by allowing them to take money out of Enron’s account and go to Las Vegas to gamble. His plan relied on the fact that the stock market prices would never fall. The problem is that in 2001 they did fall, and never went back up.
Now, Enron was falling into even greater debt, but the leaders were still making millions of dollars. Fastow started hiding the debt in other companies that invested in Enron. They were small enough amounts to go by unnoticed but large enough to be effective. This held the company together until the blackouts in California. This is when the traders play a huge role in making money for Lay, Skilling, and Fastow. The trader’s never asked the moral questions. One trader said, “if I have to step on another man’s throat in order to make a deal, I won’t just step on it. I’ll stomp on the f****** thing a couple of times so he doesn’t get up.” They became ruthless, laughing at the people who couldn’t afford to pay their electric bill. This meant more money for them because the demand was so high the prices soared. This kept Enron afloat for awhile, but stock prices continued to fall and Enron was still losing large quantities of money each quarter.
Jeff Skilling along with others saw that the end was near and that there was no way of saving Enron anymore. Skilling decided to step down as CEO unexpectedly, taking millions with him after selling all his stocks. Ken Lay had to step up and become the CEO and try to salvage what he started. He hired Sharon Watkins to assist Fastow with the books. Within a week of Skilling’s departure she found flaws and called the company out on it. Numbers were not adding up and she wanted to find out who was behind it. At this time John C. Baxter an employee of Enron had committed suicide. He couldn’t take the pressure, for he had cashed in on thirty million dollars knowing it was illegal what he was doing. Also in the week that followed of Enron being exposed, Arthur Anderson, Enron’s accounting firm, had shredded one ton of paper. Enron was exposed and filed for bankruptcy and all the employees were laid off. Enron collapsed and all was left was the verdict for the men who led this scandal.
This scandal has taught me a lot about dealing with moral issues. First of all, you can’t just ignore the fact that what you are doing is wrong. These men did not even consider that what they were doing was morally wrong. They were stealing millions from innocent people who could not do anything about it. By ignoring the issue in front of them they allowed it to become too large to fix in the end. It grew so large they could no longer control it. You have to take responsibility for your action and try to do what the right thing is. You need to look inside yourself and outside for help. Maybe these men believed what they were doing was okay. Why did they think it was the right thing to do? Jeff Skilling said, “We are the good guys. We are on the side of angels.” This happens all the time, God is on our side so what we do is right. Imperialism sprouted from this theory. God wants us to go and attack this weaker nation because they would have a better life under our power.
People in the scandal never asked the moral questions. They believed everything that the guy next to him was saying was right. “No one who was suppose to say no, said no. The lawyers, accountants, and bank investors all went along with the scandal.” We heard this in the Catechism when it talked about the four ways people could sin. One has to try to hinder the practice of evil when obligated to do so. What these men were doing was definitely wrong, but nobody stopped them.
The major answer I found from this scandal was that these men were victims to their own hubris and greed. They thought there was no way they were going to get caught. They wanted a lot of money and felt this was the easiest way to make. This inspires me not to be arrogant in my thought process of moral issues. If I let greed and wants get in front of the most important things in life, then I need to look for help and a solution to make it right.