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.
Sunday, July 14, 2002

 
--- That Was The Week That Was ... ---

... like a week of Christmas in July. An intelligent week! A remarkable week! A week you could send to the poulterer's to fetch that prize turkey hanging in the window, and deliver it to the Cratchet's. What a delightful week!

As a tidal wave of realizations obliterated all settled political landmarks, opinion leaders jumped and spun to reposition and reinvent themselves. Cirque du Soleil hs nothing on this crowd.

A Bridge Too Far? Once it gained airspeed, the Senate acted with near-unanimity, tacking Leahy's sentencing provisions onto Sabanes' regulatory scaffolding, adding friendly amendments of all stripes, dodging McConnell's poison pills. The only notable balk was at McCain's effort to mandate expensing of stock options. (McCain is right on principle, off-center and off-timing on approach. Expect Sarbanes and McCain to converge on a more methodical Levin proposal next week.) Schumer added a powerful prohibition against preferential loans to executives ... and it passed unopposed on a voice vote! (With deeper implications than most adherents realize -- expect some backing and filling in conference.)

Everybody Wants in on the Act. By week's end, Sarbanes' nemeses all wanted to be his friends. House Speaker Hastert ... Ways & Means Chmn. Thomas [who got in front of the curve with his own measure to hobble Bermuda corporate tax runaways] ... Treasury Sec. O'Neill ... numerous business advocates ... SEC Chmn. Pitt. Huh? Yes, Pitt is heartily commending and agreeing in principle, where the same provisions a week ago posed threats to civilization as we know it. Press reports exaggerate the degree of agreement, but nobody wants to get caught on the wrong side of an accelerating pendulum.

Market Blows and Bush Blunders. GWB took a business-as-usual approach to business as usual, and did a high-visibility face-plant on Wall Street. Insiders say he expected to talk tough and take credit for the ensuing market rally. Bad plan, bad execution. Left it to staffers, vacationed in an old money playground, breezed back into town the day before, undercut his own limelight by holding a clumsy afternoon presser, chose Wall Street rather than Main Street as the backdrop, delivered a perfunctory performance devoid of McCain's passion or Mark Gerson's poetry, and said nothing that would make any CEO uncomfortable. Favorable reviews were nonexistent (apart from party flaks and CEO/CFO/option lobbies), and the market tanked. Other initiatives gathered steam, leaving Bush in the dust.

It doesn't stop there. Bush is prepped to go back at it Monday, jawboning the markets with "accentuate the positve" themes. The Prez is ill-advised, notably by Commerce Sec. Evans (who was all over the Sunday talk shows), still living in the bad-apple era. What's the problem? "Our customers hate us." Good bidn'ssmen don't cover that with catchy jingles. Stop theme-ing. Start leading.

More spiders and snakes. As the week wore on, scalier and slimier details emerged on WorldCom. And ImClone. And Enron. And Qwest. And Bristol-Myers Squibb. And KPMG. And Deloitte Touche. And Harken Energy. And Halliburton. And Providian.

Reform begins at home. The new Corporate Fraud Task Force is a fraud -- window-dressing with no task and no force. Administration officials say it will prosecute wrongdoers ... and say it will do nothing of the kind ... and recommend legislation ... and do nothing of the kind. All members already have day jobs, and there's no staff. Task Force Chairman (Larry Thompson) previously chaired Providian's audit committee while Providian racked up $300M in gov't penalties, $105M in customer settlements, $38M in shareholder suits, with other actions still pending. White House still resists full disclosure on Energy Task Force and Harken matters. Army Sec. Thomas White goes to Capitol Hill soon, where he's damned if he does (take the Fifth) and damned if he doesn't (either take responsibility for Enron's trading shenanigans, or confess cluelessness re everything under his command). Halliburton has Cheney in real jeopardy. Pitt comes off recusal status soon, which comforts nobody. KPMG tax shelters may collapse under IRS fire, trapping big name bushbackers inside.

Where do we go from here? Andersen's Melvin Dick testified, in effect, "all I know is what I read in the papers" ... and KPMG's chief MIke Rake emphasizes "the auditor is a watchdog, not a bloodhound". NYT's Floyd Norris says "Congress should establish a new accounting regulator controlled by people representing investors, not accountants". I say the whole global auditing industry lives on borrowed time, and I don't know what comes next.

Europe concerned. EC calls an emergency meeting of finance ministers and regulators, worried about contagion. Paris moves to raise standards ... some CAC-40 companies don't even have audit committees. Major digital carrier KPNQwest is cratering. WorldCom has trouble paying it's bills to other carriers, and they have trouble extending credit.. Telecom is thick with reciprocal patronage and reciprocal payment obligations, everyone is stressed, and outages could multiply. A good test of robust Internet connectivity.

Don't Ask, Don't Tell. Tim Russert: Would SEC Chmn. Pitt release Bush's Harken files? "I would if he asked." Sam Donaldson: Will Bush urge Harken to release their documents? Commerce Sec. Evans "He has fully cooperatied" Sam: "But will he urge Harken to release the documents?" Evans: "He has fully cooperated" Tony Snow: "Clean bill of health -- yes or no?" Breeden (SEC Chmn. at time of the Harken matter): "Um, ***cough***, just in terms of enforcement action, the staff, er, ... ..." Evans, re black and white: "we need to simplify the standards".

Unintentional Irony Award: Russert: How can the public trust [SEC action on Halliburton]? Pitt: "I am a person of integrity, and it won't be my decision".