Integrity Matters
February 9, 2005
Enron's leadership will pay for
behavior
Question: (E-170)
Dear Jim:
The disgraced Enron leadership was involved in sinister
plots to steal money from Californians. How criminal
and sick were those individuals who allowed fraudulent
schemes to drive up prices by falsifying electrical transmission
schedules, forcing unnecessary and risky rolling blackouts?
Response:
Enron leaders, so it appears, used information to dupe
the public, even those in government. The firm's
leaders lied, cheated and stole to increase power prices
and fatten profits, creating incredible bonuses for top
executives. Some newly reveled memos confirm that those
in power at Enron knew what they were doing.
Certainly, this is bad news. The good news is that
something is being done about it. Our justice system
is addressing the issues, and those responsible are being
prosecuted. Now that these illegal behaviors can be traced
to the desks (and the email) of Jeffrey Skilling, John
Lavorato and Tim Belden, it follows that penalties will
be assessed in dollars, jail time and ruined reputations.
A time of reckoning has come for many who would manipulate
laws and regulations for self-serving purposes. The scoundrels
are being rounded up and prosecuted, finally.
To learn even more about the Enron debacle, read the
Smartest Guys in the Room: "The Amazing Rise and
Scandalous Fall of Enron" by Bethany McLean and
Peter Elkind. The Enron collapse, they write, is "fundamentally
a human drama - of people drunk on their own success,
people so ambitious, so certain of their own brilliance,
so fueled by greed and hubris that they believed they
could fool the world."
Though other business scandals would follow, none has
had the shattering effect of Enron's bankruptcy,
which caused Americans to lose faith in a system that
rewarded top insiders with millions while small investors - including
many employees - lost everything.
According to the authors, "Wall Street knew about
Enron's shenanigans and chose to look the other
way. Just as Watergate was the defining political story
of our time, Enron is the biggest business story of our
time."
These wheeler-dealers' egos and arrogance took control
of their judgment. Greed replaced conscience and seemingly
any sense of fair play. But justice will prevail. In our
hearts we know that integrity-centered leadership is the
only reliable foundation for long-term success.
