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Thursday, February 19

Skilling Indicted  

One more Enron crony indicted. The second biggest fish of them all, though probably the one that was most responsible for the company's shady accounting, has been bagged. CFO Fastow has already pleaded guilty, but he was simply the moon to the corrupt Skilling's sun. Only Ken Lay remains free thus far and it is questionable if he will ever see the inside of a jail cell. Taking my information from the book Pipe Dreams, old Kenny Boy seems to have been the rotten, though largely clueless head of the fish. Lay is not without blame by any stretch of the imagination, and it was his leadership that allowed Enron to become one of the largest sham companies in corporate history. Such fecklessness is not a crime in this country even if it does bilk thousands of people out of millions of dollars. I can only hope that Skilling's trial is a pitiless sojourn through his arrogant, crooked time at Enron that lays bare the utter lack of regard for laws or ethics with which Lay and Skilling blanketed the company. One post-script to the Enron story bears attention. In 1997, Skilling took over as President of Enron after Lay forced out Rich Kinder. Kinder had led Enron from 1990-96 as an executive focused on cash-flow and assets that yield steady (though perhaps not sexy) returns. Until 1997 Enron had been primarily a pipeline company. As Robert Bryce continually notes in Pipe Dreams, pipelines don't produce blockbuster earnings. What they do produce is hard cash. After leaving Enron, Rich Kinder started the pipeline company Kinder Morgan, and actually bought some of Enron's pipelines before and after the implosion. As one can tell from looking at their asset map, Kinder Morgan has become a very successful energy company.


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