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.
Tuesday, May 07, 2002

 
--- Andersen's Day in Court ---

OK, you've got pedophile priest extradition in San Diego and arraignment in Massachusetts, B-list Hollywood celeb murder hearings in L.A., Kennedy kin murder proceeding in Connecticut, American Taliban dancing-with-terrorists trial in Northern Virginia, car chases, an iteinerant pipe-bomber, and ... oh, yeah, that dry-as-dust technical document destruction case in Houston. Houston is hot, muggy, buggy, and folks down there are kinda cranky for some reason. Kudos to CNN for assigning a first-rate sketch artist.

Even if the Andersen trial produces a Perry Mason Moment, it'll demand too much context to cut it as a good BREAKING NEWS bulletin. It's only a preface to bigger drama anyway ... clearing ground, defoliating the underbrush, peeling layers off the onion starting with the thinnest skins ... systematically removing incentives and/or cover for one or another Culture of Minimal Disclosure.

Lead defense counsel Hardin will live up to his reputation for courtroom theatrics. (In jury selection: "Have YOU ever deleted an e-mail? Does that make YOU a criminal?"). DOJ can play it lower-key, methodically flogging Andersen's corporate corpse. OOPS, it's not quite dead yet ... don't worry, it will be.

The less there is left of Andersen, the less motive there is for anybody to cover anybody else's back. There's not much left of Andersen, BUT ... there is the untested shield of the LLP -- the Limited Liability Partnership -- invented a decade ago as compartmentalized damage control for cases much like this. LLP's are designed to keep the mother ship from imploding even in the event of a few partners' extraordinary mendacious idiocy (as with departed Big 8'er Laventhol & Horwath).

If the shield stands, billions in personal assets of Andersen partners are safe from Enron victims. (Though junior equity partners who went into debt to buy their seats are still SOL.) The traditional partnership concept is "all for one and one for all"; LLP is more like "every man for himself". Partners share in the hunt, and share in the spoils, but individualize the liability.

There is vice in breaking the shield -- large partnerships are large, unstable tort magnets. There is vice in maintaining the shield -- it's too tempting to benefit by doing great harm, and escaping the consequences by jettisoning only peers who get caught (leaving the injured plaintiffs SOL). The LLP shield has never been effectively tested, and by rights it should be tested first at the vice-o-meter's red line. Andersen's not there yet, but it's getting there fast. (That's all down the road. The current criminal trial for obstruction of justice against the firm would only reinforce the predicates for subsequent civil action. An acquittal, on the other hand, would not settle much ... we expect more fundamental criminal proceedings against the firm in months/years to come.)

In other courtroom drama, Andersen settled the Arizona Baptist Foundation case a week into the trial (after pointing accusatory fingers at everyone under the Arizona sun, pleading "everybody knew it as a Ponzi scheme, but nobody told us"), for the originally-negotiated and reneged $217M. That's not a win for anybody ... only a few million stands to be collected before the remains of Andersen are interred in a pauper's grave. (The same held true if Andersen lost at trial ... AZ Baptist investors are out most of $570M either way.)