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

Submit Feedback To:
RonKsFeedbag at aol

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.
Thursday, June 27, 2002

 
--- More Bad-Apple Strudel ... and the Portions are So Small! ---

Diehard Andersen defender Lou Dobbs gave the WorldCom matter all of four minutes at the front of CNN Moneyline yesterday, and if the word "Andersen" passed his lips, well ... my ears may have blinked.

Mid-afternoon yesterday, SEC's Harvey Pitt announced a civil suit against WorldCom. Will a billion-dollar fine make anything better? No, not really ... but the move does raise barriers to document destruction, insider bonus bailouts, etc., and it brings a wider array of discovery tools to the job. (This announcement followed within the hour of Senate Majority Leader Daschle's announcement that he really would prefer to see Pitt step down.)

Suddenly it looks like SEC may get a drastically needed funding boost. The Sarbanes bill may move (at least in the Senate). Even the US Chamber of Commerce recognizes chinks in its anti-regulation stonewall. And the WorldCom scamdle already has its own blog!
WorldCom -- like many telecoms an ambidextrous partisan palm-greaser -- slipped $100K into the GOP kitty just last week, as corporate "vice chairman" of the $30M fatcat fundraiser. "... the president does not plan to call on his party to return the $100,000 check". (WaPo) [2002-07-02 UPDATE: They are (no surprise here) returning the check.]

The most remarkable thing about the WorldCom fraud is that it escaped notice for so long. It's like one of those airline security incidents where somebody notices the metal detector has been unplugged all day.

Yes, it was an Andersen gig ... turned over to KPMG about a month ago. It was the least creative of creative accounting schemes ... no wall-chart financial engineering diagram, no offshore conduit entities, no subtle grey-area interpretations ... just blatantly plunking the right numbers in the wrong buckets. Scores of insiders had to know about it, and almost all of 'em had to know it was dead wrong. And WCOM was already under close scrutiny from many angles.

Warren Buffett always said any company that talked EBITDA was trying to sell you a bill of goods ... he won't touch 'em. Now the ebitdarians are getting worked over pretty hard in the back alleys of Wall Street. [WCOM was not even an EBITDA fraud, but WCOM was a leading proponent of "watch the EBITDA birdie" diversions.]


Also while you were out in the alley:
Adelphia took the bankruptcy route.

A number of bankers -- individual bankers at moneycenter banks -- are said to be targets of federal and state investigation in L'Affaire Enron.

SEC gets tough on $1.4B in questionable revenue recognition, and Qwest gets going (going down 57% on the day)

Grocery giant SuperValu -- a bread-and-buter business if there ever was one -- gets kicked down a flight of stairs after disclosing that an employee (make that "former employee") finagled the inventory accounts.

Tyco's Dennis Kozlowski seems to have compounded his sales tax evasion exposure with two counts of evidence tampering.

In Amsterdam there's a three-way swearing contest between failing digital backbone provider KPNQwest, former auditor Andersen, and new auditor Deloitte & Touche (which acquired Andersen's Dutch operations). Also the printer refused to release all but sample copies of KPNQwest's annual report, complaining that it had not been paid. (www.ft.com/telecoms, subscribers only)

At Martha Stewart's banquet of denial, the decorative centerpiece falls apart just as the guests of honor arrive. Stewart stood to escape insider trading charges on technicalities, but may lie in real jeopardy on obstruction of justice, as her broker's assistant flips and retracts his original confirmation of her "stop loss" cover story. Will Ms. Stewart's salad days on CBS go on hiatus?

And let's not forget Enron:
Connecticut finally opens a criminal probe into the $220M Enron/CRRA "stealth lending" fiasco. It's a politically sensitive matter, as major players in both parties are hip deep in finance & accounting industry associations.

A.G. Ashcroft abruptly removed the western states Federal Bankruptcy Trustee, considered an effective advocate for victims in the Great Power Rip-Off. (Sac'to Bee)

Bush nominees to the Commodity Futures Trading Commission include a George Mason protege of (CFTC dereg evangelist, Enron audit committee member, Senate spouse) Wendy Gramm, and a former Senate committee staffer who personally drafted some of Enron's best regulatory loopholes. (Chron)

Senate Finance chiefs Baucus (D-MT) and Grassley (R-IA) are "troubled" by the company's failure to comply with requests to turn over tax opinions and information about Enron's "tax-motivated transactions." ... Enron agreed in March to turn over all tax returns since 1985. (Chron)
For perspective, this timeline benchmark -- Rite Aid's massive restatement came to light just over three years ago ... the Rite-Aid criminal indictments followed, just last week.