Tag: Enron

Former Andersen CEO Joe Berardino Admits That We’re All Just As Stupid Now As We Were When Enron Went Bankrupt

[caption id="attachment_52236" align="alignright" width="150" caption="People are still letting this man speak."][/caption]

Of course CNBC would put this guy on TV today.

Asked whether lessons had been learned since Enron filed for bankruptcy, Berardino said, “we’re still learning” and pointed to the sovereign debt crisis currently engulfing the euro zone. “(Enron) ran out of time in terms of its liquidity and a lot of the same elements — leverage, the need for liquidity, crisis when you lose confidence — are repeated in all those examples. And I would argue we’re now living through it with the sovereign crisis in Europe,” he said. “There are a lot of the same elements.”

Arthur Andersen Ex-CEO: Enron, Europe Are Similar [CNBC]

Look, You Guys, You Should Really Be Thankful for Enron’s Bankruptcy

One of the first things I saw this morning in my Twitter feed was this missive from one of the Grumpy Old Accountants, Ed Ketz:


Now, I don’t know Professor Ketz personally, but my highly acute sarcasm detector is going batshit crazy. Less subtly, MACPA Editor Bill Sheridan gives us the timeline of the events that transpired starting with Enron’s filing. Bill gets a little weepy about the whole affair, writing:

Remember how utterly chaotic that time was? News that shook CPAs to the core surfaced almost daily, and the next day brought even worse news.

Okay, I was in college when Enron went bankrupt so I don’t remember things being “chaotic” unless you count the whole “9/11 was less than 3 months ago” thing. What I do remember was an Andersen partner who came to campus for our Accounting Society meeting (BAP didn’t have a chapter at my school) alone and he didn’t really seem to know anything more than what I imagine was being reported in the news and our faculty advisor noticed it too. So for him and his fellow partners, yes, things were probably royally sucking. And yes, things did get worse when Andersen was convicted* of obstruction of justice, surrendered their state licenses and closed up shop.

So maybe all that stuff is bad. Maybe it’s really fucking bad and it causes people to cringe to think about it but even Bill sees the upside:

You could argue that the profession is better off because of it. We took our lumps, rolled with the punches, and emerged on the far side stronger and more trustworthy than ever. “That which doesn’t kill you,” etc., etc. Still, I’m not in any rush to go through something like that again. Are you?

Jesus. Can we quit acting like Enron is still a big deal? Lehman Brothers was the size of ten Enrons. TEN. And Ernst & Young, no matter what happens, looks like idiots and continues to claim that they bear no responsibility and everything is still hunky dory. Andersen got off easy. Enron went bankrupt. The firm got fired. And fired again. And again. Then the firm died. The end. Their partners and employees moved on and everything was cool. I mean seriously, even C.E. Andrews got another job. If Ernst & Young continues on, they’ll have this hanging over them until something worse happens. Enjoy that.

But back to Enron. Thanks to Enron, we got Sarbanes-Oxley. We got The Smartest Guys in the Room. And we got that awesome Heineken ad. If you think about it, lots of you probably got your job thanks to Enron. Which means you probably owe your house, your spouse, your dog and a whole bunch of other shit to Enron too. You should be thanking your lucky stars that Jeff Skilling was such a ballsy mark-to-market wizard.

And yet people choose to remember it as, “That one time where we almost DIED!” And the mainstream press, in its blissful accounting ignorance, loves to dig it up in every article that is remotely accounting related.

I don’t know about you all but I’ve moved on. Enron was this bad thing that happened to the accounting profession but other bad things have happened – far worse things – and other equally bad things will happen. Maybe if people had learned something the last ten years and tried to do things better instead of maintaining the status quo, there wouldn’t be a French guy busting your chops. Here’s to the next 100 years. Thanks, Enron.

*SCOTUS overturned the conviction on a technicality (apparently an important one) but that doesn’t bring the firm back now, does it?

Andy Fastow Is Out of Prison

Technically! He’ll be in a halfway house until later this year (BOP says December 17) but getting out of the big house has to feel good.

However, Drew won’t be able to apply for a position at one of those Chinese companies who are losing CFOs left and right. He still has to get reacquainted with society and whatnot:

“It’s a bridge, if you will, a transition period,” said bureau spokesman Edmond Ross. The purpose of the halfway house is for prisoners to reestablish family ties and adjust to society outside of prison, he said. Prisoners are allowed to leave the facility to go to their jobs, but their movements are still controlled. “They cannot come and go as they please,” said Ross. “Their lives are restricted to the rules of the halfway house.”

First things first, Andy – Twitter account. Oh, and maybe subscribe to our enewsletter.

Enron exec Fastow nears prison release [CNN]

Bill Gates Has Less Than Flattering Things to Say About Government Accounting

“[R]eally, when you get down to it, the guys at Enron never would have done this. This is so blatant, so extreme,” Gates said of state governments’ accounting practices generally. “Is anyone paying attention to some of the things these guys do? They borrow money — they’re not supposed to, but they figure out a way — they make you pay more in withholding to help their cashflow out, they sell off the assets, they defer the payments, they sell off the revenues from tobacco.” [HuffPo]

Enron Whistleblower: WikiLeaks > SEC

“I don’t think the SEC’s culture is one that will make this effective one iota,” said Sherron Watkins, a one-time vice president at Enron, referring to expanded protections for whistleblowers included in the Dodd-Frank financial reform law. If she was in the same situation today as 10 years ago, when Watkins approached government authorities about accounting fraud at Enron, she would probably instead take her information to an organization like WikiLeaks, Watkins said. [Paper Trail]