Lay and Skilling Guilty

[Dr Dave]

It's been a while since I can remember an equally satisfying result:

May 25, 2006
The New York Times
Enron Chiefs Guilty of Fraud and Conspiracy
By ALEXEI BARRIONUEVO and VIKAS BAJAJ

HOUSTON, May 25 — Kenneth L. Lay and Jeffrey K. Skilling, the chief executives who guided Enron through its spectacular rise and even more stunning fall, were found guilty today of fraud and conspiracy in a case that led the parade of corporate scandals in recent years that emerged from the get-rich-quick stock market excesses of the 1990's.

The conspiracy and fraud convictions each carry a sentence of 5 to 10 years in prison.

For a company that once seemed so complex that almost no one could understand its arcane accounting or how it actually made its money, the cases ended up being nearly as simple as could be. Mr. Lay and Mr. Skilling were found guilty of lying — lying to investors, to employees and to government regulators — in an effort to disguise the crumbling fortunes of their energy empire.

For Mr. Lay and Mr. Skilling, the convictions represent a legal judgment about what went wrong with their transformation of a once-sleepy natural gas pipeline company into an energy-trading dynamo that at one point achieved the status of the nation's seventh-largest corporation.

For years, Enron's gravity-defying stock price made it a Wall Street darling and an icon of the "New Economy" of the 1990's. But its sudden collapse at the end of 2001 and revelation as little more than a house of cards left Enron and its crooked E as the premier public symbol of corporate ignominy.

At Enron, Mr. Skilling was the visionary from the world of management consulting who spearheaded the company's rapid ascent by fastening on new ways to turn commodities like natural gas and electricity into complex, lucrative financial instruments.

Mr. Lay, the company's founder, was the public face of Enron. Known for his close ties to President Bush's family, he built Enron into a symbol of civic pride and envy here in its Houston hometown and throughout the financial world.

The verdicts represent a long-awaited vindication for federal prosecutors, who had produced mixed results from their four-year investigation into wrongdoing at the company. The investigation resulted in 16 guilty pleas by Enron executives, and convictions in a case involving the bogus sale of Nigerian barges to Merrill Lynch.

But the Supreme Court last year overturned the obstruction of justice verdict that killed off accounting firm Arthur Andersen, Enron's outside auditor, blaming flawed instructions to the jurors. And a jury either acquitted or failed to agree on charges in the fraud trial of former managers of Enron's failed broadband division. Five executives are being retried in three separate trials over the next few months.

During the 56-day trial, defense lawyers repeatedly criticized prosecutors for bringing criminal charges against Mr. Skilling and Mr. Lay, saying the government had set out to punish the company's top officers regardless of what the facts might be. The lawyers said the government was criminalizing normal business practices and accused prosecutors of pressuring key witnesses to plead guilty to crimes they did not commit.

The defense lawyers also complained about a lack of access to witnesses who they contend could have corroborated their clients' versions of events.

The Enron trial, more than any other, punctuates the era of corporate excess and corruption defined as well by the failure of WorldCom, the telecommunications giant whose bankruptcy following revelations of accounting fraud even exceeded Enron's in size; the prosecutions of Martha Stewart and Frank Quattrone, the technology industry banker; and executive suite scandals at Tyco, Adelphia Communications and HealthSouth.">Adelphia Communications and HealthSouth.

"Trials like this are ultimately cathartic and they often end up marking the end of eras," said Mitchell Zuckoff, the author of "Ponzi's Scheme," a history of the salesman who was found guilty of defrauding investors after World War I. Just like Mr. Ponzi, Mr. Zuckoff said, the Enron defendants "blazed a path by using accounting tricks, their own charm and complex financial measures to create the appearance of something where there was nothing."Mr. Lay, 64, and Mr. Skilling, 52, are the most prominent executives to be convicted in a recent corporate fraud case. Last year Bernard J. Ebbers, WorldCom's former chief executive, was found guilty of orchestrating a record $11 billion fraud at that company.

[Slurpy]

Originally Posted by Dr Dave

May 25, 2006
The New York Times
Enron Chiefs Guilty of Fraud and Conspiracy

Damn liberal media.

[claude]

Originally Posted by Dr Dave

Kenneth L. Lay and Jeffrey K. Skilling, the chief executives who guided Enron through its spectacular rise and even more stunning fall, were found guilty today of fraud and conspiracy in a case that led the parade of corporate scandals in recent years that emerged from the get-rich-quick stock market excesses of the 1990's.

You beat me to it.

I find it funny that it seems that the 90's now are the decade of "stock market excesses". I remember in the early 90's that the 80's were the decade of stock market excesses. I wonder when the next evidence of fraud will arise?? The regulatory changes made were window-dressing at best (imho) and I don't imagine that it will take another 10 years before the next big fraud comes to light.

[lynn]

Good luck on that one Claude. National Security will keep those cases from coming to trial.

[sonic1]

HELL YEAH!!!




That is the best news in years.

[Vince Kargatis]

Still, it brings to mind the idiocy of jailing non-violent criminals. Why not an equivalent time of community service, while draining his coffers towards the public debt?

[claude]

Originally Posted by Vince Kargatis

Still, it brings to mind the idiocy of jailing non-violent criminals. Why not an equivalent time of community service, while draining his coffers towards the public debt?

On the contrary, in terms of deterrance I think jail time is much scarier for white-collar criminals than for the average violent criminal. These guys are used to buying their way out of trouble, so the thought of losing some of their fraudulently earned money isn't that big a deal. But losing their freedom and having to spend it with people who don't respect their power, that would be a much scarier proposition, again imho.

[Gentle Giant]

I look forward to them becoming some badass' bitches, although they'll probably get cushy cells away from the common criminals.

Assholes.

[Deadlift]

Originally Posted by claude

On the contrary, in terms of deterrance I think jail time is much scarier for white-collar criminals than for the average violent criminal. These guys are used to buying their way out of trouble, so the thought of losing some of their fraudulently earned money isn't that big a deal. But losing their freedom and having to spend it with people who don't respect their power, that would be a much scarier proposition, again imho.

Yup. The average street criminal knucklehead isn't capable of thinking more than 10 minutes ahead, so deterrence doesn't work. Vermin like these two are different.

[Vince Kargatis]

Incarceration as deterrent, I don't buy it (actually, I do, in that we all pay for it bigtime). I think there're a lot more efficient, varied, and productive ways to deter, but, bah, this is an old debate.

[claude]

Yeah, I'm just talking out of my ass anyway. Obviously prisons don't do much to deter crime.

[Pete C]

Originally Posted by Vince Kargatis

Incarceration as deterrent, I don't buy it (actually, I do, in that we all pay for it bigtime). I think there're a lot more efficient, varied, and productive ways to deter, but, bah, this is an old debate.

So you're proposing incarceration for the poor and community service for the rich?

[Scott Dolan]

Originally Posted by VK

Incarceration as deterrent, I don't buy it

Worked for me.

[sonic1]

Originally Posted by Vince Kargatis

Incarceration as deterrent, I don't buy it (actually, I do, in that we all pay for it bigtime). I think there're a lot more efficient, varied, and productive ways to deter, but, bah, this is an old debate.

Sorry. But the rules apply to everyone. If someone stole a lot of money, and then lied about it, and got busted, and went to jail, there is no difference in my mind if they used methods available to the poor, or methods available to the rich. It is still lying, cheating, stealing. You break the conventions of society and then you pay for those actions. Yes, there are worse crimes out there, but that does not make these guys unworthy of punishment. I think the crimes need to be appropriate, and not violent, but I am totally tired of seeing guys like this not only get off, but rewarded for such behavior. And for once someone had the balls to take on these rich and powerful people. What is more, they showed absolutely no remorse for their actions. That display of arrogance and being above the law makes me sick, mainly because I know that they believe they are above the law. At least, for once, they are not.

[lynn]

Do we remember Michael Milken? He got out and had so much money left he became a philanthropist. These guys need to run the gauntlet through all the employees they screwed, then head of to a 5x10 cell.

Wonder if GW plans to visit his old buddy KennyBoy.

[sonic1]

They will appeal, though I don't know if they really stand a chance to succeed (knock on wood).

[Vince Kargatis]

Originally Posted by Pete C

So you're proposing incarceration for the poor and community service for the rich?

Huh, I had the impression you were above using strawmen, guess not.

I'm kinda shocked that so many seem to be defending our incarceration system, I mean, it works so well and all... But I don't have the energy at the moment to so fantastically stretch my imagination as to ponder various bizarre, more constructive ways to deter, punish, rehabilitate, and protect than the system in use.

[Darryl G. Thomas]

Pete C. nailed it If you're going to give a cat life for stealing a slice of pizza under "3 strikes you're out" laws you might as well jail these guys How many folks' retirements and lives did they ruin?

[Scott Dolan]

Originally Posted by Vince Kargatis

Huh, I had the impression you were above using strawmen, guess not.

I'm kinda shocked that so many seem to be defending our incarceration system, I mean, it works so well and all... But I don't have the energy at the moment to so fantastically stretch my imagination as to ponder various bizarre, more constructive ways to deter, punish, rehabilitate, and protect than the system in use.

Interesting.

You never seem to have the time or the energy to back up your assertions, but you sure do find quite a bit of time to insult others for their opinions.

I don't doubt that you are an intelligent man. Far more than I. But you have turned into quite the asshole of late.

[Al in NYC]

Couldn't have happened to two nicer guys. Of course, they really should have fallen on their swords, as one of their comrades did, when they had the chance. At least their suicides would have given some tiny amount of honor to their downfall.

Now they just get to drag their whiny asses to jail and whine their wimpy little transparent BS about how they saw nothing and knew nothing, and most likely to serve as something like martyrs for the true believers of the class power, corporate power, "free" market creed. IMO they deserve the death sentence much more than most death-row inmates, since their actions ruined a lot more lives, but then they're not poor and/or black and I'm a death penalty opponent. So, perhaps life at hard pointless labor?

I know one thing, I sure wouldn't want a couple of operators like these guys serving "community service" or some other crap. First of all, they'd almost inevitably find some way to job the system (as most marginally intelligent criminals do - I know, done it myself), and, second of all, who'd want to get any "service" or would expect any useful "service" from such proven liars and thieves?

Better they rot as long as possible as an example to others that some white-collar criminals, the worst most obvious ones at least, occasionally do go to jail. My guess is that jail time (real jail time that is, not some country club federal pen time) would work somewhat better as a deterrent to members of the cushy coddled class than it would for those whose lives are lived in poverty at the margins anyway. But, of course, they'll almost certainly get the easy ride, as members of their class don't send other members of their class up to do real hard time.

So Vince, I take it you support no incarceration and a program of community service for poor street criminals as well?

[sonic1]

You simply cannot on one hand (as I have seen Vince do) defend the function and value of the CEO (justifying their inflated earnings which far supercede most others related to the function of a corporation) and on the other hand suggest that these two talented, well-known corporation managers did not see any of this happening. They knew what they were doing. And they deserve to suffer the consequences of their choices.

I am not big on "revenge" but I do believe in justice. Pot-smokers don't belong in jail. People who cheat on their taxes? Well, that is borderline. Outright theives? Totally.

[Vince Kargatis]

Originally Posted by Scott Dolan

You never seem to have the time or the energy to back up your assertions

Even moderate familiarity with my posting history should belie this impression.

you have turned into quite the asshole of late.

This I won't argue with - there are definitely some value judgments occuring regarding time investment.

[Vince Kargatis]

Originally Posted by Al in NYC

So Vince, I take it you support no incarceration and a program of community service for poor street criminals as well?

You take right, generally speaking (the complicated details of a non-lock-em-up system notwithstanding). Incarceration should be a last resort as protection against those deemed too dangerous to have access to others.

Originally Posted by sonic1

You simply cannot on one hand (as I have seen Vince do) defend the function and value of the CEO (justifying their inflated earnings which far supercede most others related to the function of a corporation) and on the other hand suggest that these two talented, well-known corporation managers did not see any of this happening.

Really weird you would take my comments as defense of Lay and Skilling. I don't recall specific comments on the phenomenon of the CEO, except perhaps to note it seems an inevitable consequence of how big businesses operate and how shareholders vote. I'm certainly no fan of big business.

[Monte Smith]

"America, you lost," screamed Kenny Boy as he was led away in chains.

If they don't recoup the money 5-10 in the slammer is worth it. If they go to jail you know they'll go to a white collar bighouse, if they serve any time at all. I wouldn't be surprised if their lawyers figured out ways to delay jail indefinitely.

[JamesH]

Originally Posted by Vince Kargatis

Still, it brings to mind the idiocy of jailing non-violent criminals. Why not an equivalent time of community service, while draining his coffers towards the public debt?

I agree that there should be alternative sentencing for non violent criminals. But I'd make and exception for those who take the pensions and retirements of the elderly and force the poor to freeze in the dead of winter. Somehow seems more evil than a guy caught buying or selling drugs.

[sonic1]

Originally Posted by JamesH

I agree that there should be alternative sentencing for non violent criminals. But I'd make and exception for those who take the pensions and retirements of the elderly and force the poor to freeze in the dead of winter. Somehow seems more evil than a guy caught buying or selling drugs.

Totally. Robbing one person is one thing. Robbing thousands is quite another. These guys had a lot of people's lives in their hands. They had a lot of power and therefore a lot of responsibility. They chose to be totally selfish.

[Pete C]

Vince, my point was that policy & implementation are two different issues. You appeared to be suggesting that non-incarceration for these guys would be preferable even within a system that otherwise incarcerates non-violent criminals.

[Vince Kargatis]

Originally Posted by Pete C

You appeared to be suggesting that non-incarceration for these guys would be preferable even within a system that otherwise incarcerates non-violent criminals.

I said "it brings to mind the idiocy of jailing non-violent criminals". I see no such appearance.

[Pete C]

My apologies, then.