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August 7, 2006

Perpetuating the Enron Myth

enronlogo30.gifAs noted in this prior post on the death of former Enron chairman Ken Lay, the myth of Enron is now so fully embraced within American society that otherwise intelligent people reject any notion of ambiguity in addressing facts and issues that call the Enron morality play into question.

One of the poster boys for the myth of Enron is Chronicle business columnist Loren Steffy, who has made a good part of his living for the past several years appealing to resentment and scapegoating rather than fair-minded analysis in covering the aftermath of Enron's demise. Steffy's latest effort in that regard is this column on the Fifth Circuit's recent ruling eviscerating most of the Enron Task Force's dubious Nigerian Barge prosecution of four former Merrill Lynch executives. Steffy dismisses the ruling as "a quagmire" and "thick mumbo jumbo" that "only a lawyer could love," and suggests that none of the three judges on the Fifth Circuit panel who wrote the decision "completely agreed with each other." Compare Steffy's treatment of the case with this analysis from a year ago, which foreshadowed much of the Fifth Circuit's decision.

But the best indication that Steffy's appeal to resentment trumps sound analysis or good judgment is his statement that none of three Fifth Circuit judges involved in Fifth Circuit's decision "completely agreed with each other." That's simply false, as each of the Fifth Circuit judges agreed with each other that the conviction of Merrill Lynch executive William Fuhs should not only be vacated, but reversed and rendered (i.e., the case cannot be re-tried). In so doing, each of the judges agreed that the Enron Task Force had produced insufficient evidence during its case-in-chief against Fuhs for a jury to find him guilty beyond a reasonable doubt of any crime. The ruling is a strong rebuke of the Task Force's decision to prosecute Fuhs in the first place.

Inasmuch as that part of the Fifth Circuit's decision does not fit neatly into the myth of Enron, Steffy ignores it (after misrepresenting it). The human tragedy of a young man with a wife and two young children being unjustly imprisoned for almost a year and having his professional career shattered by a wrongful prosecution does not even register on Steffy's radar screen.

That it does not reflects the shallow nature of Steffy's analysis well. As Larry Ribstein has observed in his ongoing series of posts regarding the disingenuousness of NY Times business columnist Gretchen Morgenson:

The last thing the journalists want is the sort of analytical clarity that we need for useful public policymaking. Rather, they want to obfuscate differences to enlarge the apparent, though not actual, size of the story.

Posted by Tom at August 7, 2006 5:30 AM |


Tom K. --

It has always struck me that Loren Steffy, for some reason, seems to be so emotionally tied to the Enron myth that he has trouble dealing with the facts in a rational way. The first time I read a Steffy column on Enron, I actually thought it was an intentional parody meant to make fun of people who thoughtlessly demonize all things Enron. I was amazed to find out later that Steffy actually seems to take his strange opinions about Enron seriously. It strikes me that Steffy is a bit like "the Cotton Mather of the Enron trials".

Posted by: Evan Author Profile Page at August 7, 2006 8:06 AM

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