Enron unravels

Enron has gone through several incarnations. It first entered the public view as a shining star in business. Then its sudden collapse made it a classic symbol of business excess.  It reemerged as a shining star of business prosecutions, with prosecutors, journalists and filmmakers hyping the criminal prosecutions and the Enron Task Force just as Lay and Skilling had hyped Enron. 

At the peak of the Task Force's activities we had Enron: The Smartest Guys in the Room. The film was co-written by one of the book's authors, Peter Elkind, and featured monologues by journalists Elkind and his co-author Bethany McLean as well as "whistleblower" Sherron Watkins (here's a less hagiographic portrayal) and trial lawyer Bill Lerach, among others. The movie stacks its case with Michael-Moore-type juxtaposition of images, crafty lighting and camera angles, and an aggressive sound track that highlights the hyping of Enron with rock, and then its downfall with dirge. Never do we catch a hint of the Enron defendants' side of the story.

Tom Kirkendall now reminds us that the Enron Task Force bubble is popping just as its target did.  Consider:

• The conviction of Enron Broadband executive Kevin Howard has been thrown out.
• The Nigerian Barge defendants' conviction has been thrown out.  Defendants Bayly and Furst have been granted an interlocutory appeal of the denial of their motion to dismiss the government's attempt to retry them. [The film, in a long sequence on the Nigerian Barge case, presented the prosecution's factually questionable theory that the transaction was a sham sale as fact.]
• Jeff Skilling's defense team is currently attempting to determine through notes of FBI and Task Force interviews whether prosecutors withheld exculpatory evidence or got Andy Fastow (whose credibility has always been in doubt) to change his story over time. If so, that alone could justify a reversal of Skilling's conviction, though there are other possible grounds. [The film not only didn't present Lay and Skilling's side, but lampooned their efforts to defend themselves.]

Meanwhile, we also know that Lerach himself, who got substantial screentime to essentially present, unchallenged, the plaintiff's side in the Enron case, is on the way to jail.  Also, while a significant segment of the film hyped the case against the banks that funded Enron, the Supreme Court is about to consider, and possibly reject, the theory on which they were sued.

This doesn't mean that the Enron defendants were blameless. It is to say that criminal trials were never an appropriate way to deal with the wrongs, and that part of the problem is that these trials may be motivated more by public storytelling, in film, magazines, newspapers and pleadings, than a search for justice.

In the end it's possible that Enron may acquire yet another meaning -- as a symbol of prosecutorial, journalist and filmmaker excess. 

Comments

[M. Hodak]

"Court Rules Against Investors"

From today's AP, arguably the opposite of the truth.

I think we're unfortunately a long way from such things being viewed as legal or journalistic excess.