Continuing Summary of the Enron Scandal
During the '90s Enron pushed the accounting scandal to new levels in an effort to keep their stock price rising. That is what most of the litigation is about right now.
They cooked the books to a smoldering pile of ash with lies, deceit, criminal accounting, conflicted analysts, evidence shredding, and so on.
Enron filed for bankruptcy in October of 2001 because the Wall Street Ratings Firms began hearing of the corruptionand lowered Enron's bond rating over a period of several months to where the company could no longer borrow money, and it's stock became worth pennies.
But a very interesting thing happened for Enron just a year before the Enron Scandal was revealed - deregulation of the Energy Industry - (with the help of VP Dick Cheney). All during the year of the collapse of Enron, the company was making enormous profits.
This company had been grossing 2 to 3 Billion dollars annually until deregulation when they pocketed the $12 Billion surplus the state of California had built up, and put California in $40 Billion of debt with their drummed up energy crisis in the heat of the summer - over $50 Billion from a single state.
Enron perpetrated these schemes in other states and Canada as well, raking in over $100 Billion that somehow has been roundly overlooked by the press. The 4,300 SPEs (Special Purpose Entities - off shore partnerships that were given a small amount of news coverage) were filled with these illegal profits and remain a mystery to the American Public.
A Fortune 500 article published in April, 2002 (six months after Enron filed for bankruptcy filing) moved Enron from the 6th to the 5th spot, estimating the company would gross $138 Billion.That was rather astonishing considering that they were already in Bankruptcy Proceedings!
The big news seemed to be how much money the Execs were paid in stock options and bonuses. Let me assure you, the money that these guys have in American bank accounts is just for their living expenses and lawyers fees. They have billions in the Caymans.
You see, deregulation was still in effect (it still is to some extent) and Enron was still making astronomical profits even AFTER the so-called "collapse of the energy giant". They made enough money in the short span of two years to pay off all of their debt ($30 Billion), to buy back all of their stock at the '98 price ($60 Billion) and get out of bankruptcy proceedings.
But they didn't do that. No, they shoveled all of that money into off-shore accounts in the
Cayman Islands where almost 600 of these SPEs had one single post-office-box business address.
The Cayman Island Government announced in 2002 that it had changed it's banking policy and would divulge information on the off-shore accounts....."But no one has asked".
Skilling said (rather conspicuously) three times in less than five minutes during his testimony to the Sub-Committee - "Enron was disbursing cash".
He wasn't kidding! That was most likely the only truth that came out of his mouth at that hearing and why he still professes that he did not lie.
The mainstream news continues to refer to Enron as the "Bankrupt Energy Giant" (dis-informing the public and keeping them ignorant of the facts).
Energy Regulation and Summary of The Enron Scandal
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