Loren Steffy is one of the best Energy Reporters at Enron's hometown Newspaper, the Houston Chronicle, although not without his detractors, links below. Via the Chronicle's FuelFix blog:
Business, like Houston, rarely uses a rearview mirror, so the anniversary of Enron’s bankruptcy filing, 10 years ago today, passes with a whiff of irony....MORE
In our haste to look forward, to strike the crooked E from the city’s collective psyche as surely as it was plucked from the sidewalk on Smith Street, we inadvertently reinforce one of the more subtle yet important warnings wrapped in Enron’s failure.
Peeling back the fraud, the hubris and the wretched excess, stripping away the corruption of the lawyers, accountants and internal safeguards, Enron’s failure underscored the dangers of the short-term view that still pervades American business. Enron, fundamentally, was a company that lived for the moment.
“They never were seriously interested in a culture of integrity,” said Stephen Arbogast, a University of Houston finance professor who wrote a book on Enron’s culture of corruption and has used it as a case study in his classes for years. “They were interested in a culture of short-term gain.”
The pressure to meet quarterly earnings forecasts, of course, had been building long before Enron failed. The dot-com boom that preceded its collapse heightened the urgency for short-term gain.
Rules had changed?
Enron was no dot-com, but like the tech startups that littered the market at the time, it argued the rules had changed.
It struggled to find growth in new markets, to replicate its earlier success with natural gas trading. It hid its failures, and as it grew more desperate, it pushed employees to close big deals fast. Their long-term value didn’t matter as much as the momentary hype that would prop up Enron’s veneer of growth.
As those deals proved unprofitable, Enron’s financial engineers came up with ever more elaborate schemes to meet those all-important quarterly profit goals. Eventually, its income statement reflected little more than cartoon accounting.
“The issue was: ‘How do we keep the image up?’ And the answer was manufacturing earnings,” Arbogast said.
From The Enron Blog:
Loren Steffy Still Slamming Enron
Loren Steffy is at it again.About The Enron Blog
The Doofus Defense is under attack. As longtime readers know, I coined that term leading up to the trial of Enron executives Ken Lay and Jeff Skilling, who, facing criminal charges, suddenly claimed to be woefully ignorant of their company’s actions.Hey, that’s awesome Loren! You coined a term – that’s so cool. Do you have any other tricks? How about a modicum of journalistic integrity?..
The Enron Blog was created out of frustration with the casual consensus that Enron was corrupt, a viewpoint enhanced by portrayals of greed and avarice in the media and the Department of Justice. My experience with Enron simply did not comport with that characterization.From the Houston's Clear Thinkers blog:
Enron executives are innocent. Their company was toppled by a run on the bank, exactly like we’ve seen with Bear Stearns, IndyMac, Lehman Brothers, and other companies. There was no fraud or conspiracy at Enron....
Loren Steffy's Enron myopia
Houston Chronicle business columnist Loren Steffy is a particularly vitriolic critic of former Enron executives Jeff Skilling and the late Ken Lay. Steffy convinced himself early on that Skilling and Lay had lied to investors about Enron, so he made a good part of his living for the past several years appealing to resentment and scapegoating rather than fair-minded analysis in covering Enron's demise.
Even the fact that the criminal cases against both Skilling (see also here) and Lay turned out to be rather weak made no difference to Steffy. He rarely, if ever, gave Skilling or Lay any credit for the enormous wealth that was created from their legacy of beneficial risk-taking. Stoking anger toward wealthy business executives is much easier than nuanced analysis of often complex markets and business transactions. Probably sells more newspapers, too....MORE