The poster boys for corporate corruption are guilty as charged – mostly.
Yesterday, after a four-year investigation and 56-day trial, the disgraced chief executives of Enron, Kenneth
Lay and
Jeffrey Skilling, were found
guilty of fraud and conspiracy.

Lay was found guilty on six counts of fraud and conspiracy and
four counts of bank fraud. Skilling was convicted of 18 counts of fraud
and conspiracy and one
count of insider trading. He was acquitted on nine counts of insider
trading. Outside court, Lay maintained his innocence; Skilling
downplayed the verdict: “We
fought the good fight. Some things work out and some don’t.” The trial
is unlikely to be open to appeal. And overturning it would be a long shot anyway.

From the White House – whose number one resident was once a friend of
Lay, nicknaming him “Kenny Boy” – came a strong victory message. “We
congratulate the (US) Justice Department on successfully
concluding a highly complex legal proceeding that led to the
convictions,” said White House spokesman Tony Snow. “The
administration has been pretty clear there’s no tolerance for corporate
corruption.”

But the focus of the trial wasn’t just on Lay and Skilling’s criminality, writes Kurt Eichenwald in the New York Times.
In fact, in the closing arguments, “the government made sure to
separate the
allegations of criminality from the responsibility for Enron’s
collapse”. In the end, Enron’s bankruptcy was more about a an out-of-control corporate culture which had been poisoned
by market-fuelled hubris, leading to a “recklessness that placed the
business’s survival at risk” and in turn opened the door to criminality.

The Enron chiefs will be sentenced on the ominous date of 11 September and Nation blogger William Greider
has a prison term in mind: six trillion years. It’s the least the judge
could give Lay “with his
million-dollar smile” and Skilling “with the cold, confident eyes
of a viper” who made Enron into the symbol and showpiece for a
glorious era and helped create the great national delusion of wealth falling out of the
sky which later “turned to catastrophe”. As Greider notes, unwitting investors ended up losing,
yes, $6 trillion overall.

So the era of outlandish business corruption is over. Well, yes, about that, says Slate‘s Daniel Gross. “It would be nice if this vision of a sparkling clean corporate America
were true”, he writes. “It would also be nice if everyone could have a pony.” Alas,
the accounting games and executive-compensation excess that began in
the 1990s are “still very much with us”.

But for sheer audacity and scale, surely it will be some time before we see the likes of Enron again.

Peter Fray

Save up to 50% on a year of Crikey.

This extraordinary year is almost at an end. But we know that time waits for no one, and we won’t either. This is the time to get on board with Crikey.

For a limited time only, choose what you pay for a year of Crikey.

Save up to 50% or dig deeper so we can dig deeper.

See you in 2021.

Peter Fray
Editor-in-chief of Crikey

SAVE 50%