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.


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Camp Enron Archives
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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.
Saturday, June 15, 2002

 
--- A Strange and Beautiful Verdict ---

It turns out the jury's "guilty" finding was NOT premised on shredded documents or deleted e-mails. The nexus of unanimity was Andersen in-house counsel Nancy Temple's efforts to sanitize the paper trail behind Enron's Q3 earnings report, in which certain obviously recurring expenses were classified as "non-recurring".
Nancy Temple wrote lead Enron auditor David Duncan that he should remove her name from a memo discussing the company because it would increase "the chances that I might be a witness, which I prefer to avoid."
Strange and beautiful? Not only did the jury rise triumphantly to Hardin's troublesome "Where's Waldo?" challenge, and moot the theoretically problematic jury instruction, but -- by accident or by design -- the "guilty" finding on obstruction rests unmistakenly on a factual finding of "guilty" on a count of fraud (not charged in the current case) ... and not on the arguably picayune matters of document destruction.
"Arthur Andersen did not approve that (earnings release) and Enron went along anyway and (issued) it," said Criner, a computer science professor at Texas Southern University in Houston. "Then Arthur Andersen set about to change things to alter documents to keep that away from the SEC." ( the Chron )
The story behind the verdict also shreds of Andersen's post-trial press release, to the effect that "any company could be prosecuted for following standard document disposal practices".

The SEC says Andersen agreed to cease auditing public companies by August 31, but Andersen promises to go down fighting.

As NYT's Floyd Norris observes, and as we noted at the beginning, the verdict does little to advance the cause of audit reform.
As far as deterrent effect, the case's unpredictable twists and turns do little to set expectations of swift and sure punishment.

As a spur to aggressive prosecution, the almost-whimsical result baffles the calculus of priorities.

As a spur to legislative reform, the effect remains a matter of remote speculation.

Andersen's guilt boosts Enron executives' odds of success with a "professional reliance" defense. ("I ain't no accountant, yer honor, Andy was the accountant.")

A point Norris misses: the demise of Andersen reduces the "Bigs" to such a small number that another takedown would literally crush the existing scheme of external auditing.
It was -- from beginning to end -- a prosecution that could not be expected to do much good ... but to decline prosecution would have made a mockery of the law.