the CAMP ENRON Report


CAMP ENRON:
... gateway to the next Progressive Era?

Some say it's nothing but a train wreck ... roll in the big cranes, clear the track, see what the crew's been smoking. If I thought so, I'd not be writing this ... and if they thought so, they'd not be drumming so hard.


For a brief orientation, see this
Welcome to Camp Enron

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Camp Enron Archives
01/01/2002 - 02/01/2002 02/01/2002 - 03/01/2002 03/01/2002 - 04/01/2002 04/01/2002 - 05/01/2002 05/01/2002 - 06/01/2002 06/01/2002 - 07/01/2002 07/01/2002 - 08/01/2002 08/01/2002 - 09/01/2002 06/01/2003 - 07/01/2003

NOTE to READERS:
(2) All "major" articles of older material have now been imported, some with updates worth perusing. We'll keep it all on the main page for a while, will add a few loose pieces of history, will trim the main page and index the archives for convenience later.


OUR DEPARTMENTS:

the COGENT PROVOCATEUR:
free agent, loose cannon, pointy stick ... taking an imposing analytic toolkit out of the box, over the wall and into the street ... with callous disregard for accepted wisdom and standard English

reading the tea leaves from original angles, we've led with uncannily prescient takes on the federal surplus, the dotcom crash, the "Energy Crisis", the Afghan campaign, the federal deficit.

More where those came from ... stay tuned.


For brief orientation, see this
Welcome to CP


CAMP ENRON:
... gateway to the next Progressive Era?

For a brief orientation, see this
Welcome to Camp Enron

OTHER GOOD STUFF:
Many thanks to Tony Adragna and Will Vehrs, still shouting 'cross the Potomac at QuasiPundit. Early Camp Enron material can be found in QP's Dispatches department.
Friday, January 18, 2002

 
--- Short Takes ---

Spelcheck!. It's not "Anderson", it's "Andersen" (formerly "Andersen Worldwide", formerly "Arthur Andersen", and estranged parent of "Andersen Consulting", now "Accenture"). This far into the scandal, major media -- from LA Times to QuasiPundit.com -- should know better. Lucky none of the Big Five were founded by Poles or Arabs.

Scandal skeptics insist Enron's just an ordinary train wreck. No big deal ... most trains keep running on schedule. Roll in the heavy cranes, clear the track, find out what the engineers were smoking, fill out the reports and pass 'em on to the insurance guys. "Whatcha gawkin' at, people, go on about your business, willya!" Could be true ... but if I thought so, I wouldn't be writing this ... and if they thought so, most of 'em wouldn't be drumming so hard.

"We can't quit, you fire us!!!" Enron dismisses Andersen. The relationship had to end one way or the other, and it probably had to end this way. Better for a public corp to fire a vendor than be shunned by its auditor. Better for an auditor to have the door slammed in its face than be seen slinking away from a terminally wounded client it failed to protect.

Can't teach an old industry lapdog new tricks. SEC Chairman Harvey Pitt unveiled an ingenious plan for addressing the crisis -- put the whole audience to sleep. (Pitt is a less dynamic speaker than his pre-SEC career as an accountant's accountant's lawyer's committee's lawyer would lead one to expect.) Before they wake up, move the industry even farther into the wilderness of toothless oversight.

Pitt doesn't "get it", never will. Give him the hook, and find a real reformer. Jack Welch is a perfect misfit for almost any post in government, but he could lead a task force on corporate governance. A bullshit-detector's bullshit detector, he built a career reminding people to FACE REALITY, he understands the stakes, and he passes every test of public confidence and political acceptance.

What would rational markets do? When terrorism made the jump from nebulous possibility to concrete reality, when recession edged in from indefinite future to immediate present, when telecoms and dotcoms crashed and failed to bounce back with better business models, when global economies slipped backward rather than inching forward ... a rational market would have settled on a lower discounted present value of all future returns. My "Planet Enron" reference to nitrous oxide (N2O) was only half-joking. Wall Street is floating, oblivious, in pain but feeling no pain, waiting patiently in line for the next epoch of limitless growth. Enron times 100? The books may not be cooked, but the prevailing psychology is just as dramatically fried.

Enron must be the crusading prosecutor's wetdream. Mom & Pop victims, moneybags defendants. So many players, so much complexity, no way they'll keep their stories straight. Fingerpointing, grudges, small crimes to bargain for cooperation against the bigs, probably scams inside of scams, ripping off the scammers. Defendants with everything to lose, running scared. All the defense and appellate counsel money can buy, though, and mind-numbing subject matter.

The big fish could still slip the net on the premise that everything they did was stupid but technically legal, or done on misinformation, or on somebody else's authority, or done "virtually" in places where it wasn't even illegal. Or "auditor ate my homework" defense, or some premature proceeding leaves them with Ollie North immunity. Or they pull a Marc Rich ... or find Jesus, plead out for a slap on the wrist and retire to the Cayman Islands to write their memoirs.

Auditing Enron was big enough to take down one of the world's top audit firms. Forensic reconstruction of the disaster will take a lot of legwork, and FBI is overextended with homeland defense. Help is in the pipeline, however, in the form of a DOJ-chartered FBI reorg to "identify and recommend actions dedicated to improving and upgrading the performance of the FBI ... evaluate the organizational structure and mission of the FBI, including the agency's own perception of its mission and core values" Contract was let back in July, to a topnotch consulting firm -- Andersen.

"Enron" ... the Soundbite of Mass Destruction? Those looking for ballotbox angles should look to the 2012 election cycle ... not 2002.[UPDATE: 2002-01-23 Daschle uses "Enron" as verb transitive -- budget should not "Enron the people".]

Enron ... Scandal-gate's last stand? Media have a scandalously slothful habit of consumer-branding every investigation with the generic "-gate" logo, invoking vague, plausibly-deniable parallels to the web of high crimes known (slothfully) as "Watergate". Enron just may be big enough and different enough to break this unfortunate reflex.

In upcoming dispatches: political op's bigger than they look, tax island paradise, messing with Texas, leave it to Levitt, the effects of fallout on the ecology of capital, circling the wagons, and ... what about DELL?