Ever wonder how the mainstream media maintains Enron-related myths?
In reporting on the sentencing hearing later this week in the Enron-related case of the three former UK bankers dubbed “the NatWest Three” (prior posts here), the Chronicle’s Kristen Hays observes the following:
In their plea deals, the trio admitted they committed wire fraud in a scheme with Fastow and his top lieutenant, Michael Kopper, to cheat their former London employer, Greenwich NatWest. The bank, which is now part of the Royal Bank of Scotland, had a stake in a Fastow-created partnership and the three men advised their employer to sell that interest for $1 million when they knew its value had grown.
Fastow arranged for Enron to pay more than $19 million for Greenwich NatWest’s stake and divided most of the cash among himself, Kopper, the British bankers and others.
Actually, as noted in this earlier analysis of the NatWest Three plea deal, the following is what the former bankers actually pled to:
So, after years of litigation, the NatWest Three pled guilty to a single count of wire fraud. The basis of the guilty plea is that the three bankers failed to disclose to NatWest the [$250,000] option that they had taken from Fastow to purchase a portion of NatWest’s interest in Swap Sub at the time that NatWest sold that interest to Southampton [for $1 million]. Importantly, the basis of the plea deal is not that the NatWest Three knew and didn’t tell NatWest that the value of the bank’s Swap Sub interest was going to skyrocket soon after Southampton bought it as a result of Fastow completing the unwind transaction with Enron.
Read about the real NatWest Three deal.
Part of the tragedy of this is that most of these reporters probably believe that their reports are accurate. They seem to get most of their information from the government, and they obviously perform little independent investigation and analysis. The allure of the Enron myth is so strong that the reporters in the mainstream media do not even apply the most basic level of skepticism that should be an ingrained feature of every reporter’s mindset.
What amazes me is that the misconduct of the Enron Task Force and the DOJ in the Enron cases is a huge and important story. You would think that the press would be jumping all over themselves to get on top of it. Instead, we continue to get the same old vapid nonsense. Where is inquisitive and courageous Lois Lane when we need her?
Evan, your point is a valid one. For example, the mainstream media’s non-interest in the Fastow notes — which have the potential to blow the lids off the Skilling conviction and the Nigerian Barge case, and are certainly relevant to the NatWest Three case — is damning proof that the mainstream media is unwilling to pursue or even report on stories that conflict with the MM’s preconceived notions about Enron.
I have noticed that even among people who intellectually understand that they are not getting the real Enron story, there is often still a reluctance to lift the veil of the Enron myth. The simplistic morality tale version of the Enron story seems to have such entertainment and emotional “closure” allure to people that many of them lose all interest in trying to understand the facts.
Part of the problem, of course, is that the Enron myth flows neatly into the wave of anti-business rhetoric and sentiment that has been popular many years now in the press and even in popular entertainment. The fact that the Enron cases are really about big government wielding its power against private individuals (not against Enron directly) seems to be lost on the press and public.
And, as you and others have noted, when we wink at government abuse against unpopular people, then who do we expect to stand up for us when the abuse is aimed in our direction?
I knew that article was way off when I read it but unfortunately the media is giving people what they want to hear. The media perceives themselves as doing a favor to the many people who were the supposed victims of Enron’s collapse by reporting this misinformation. At the end of the day the real victims are the many people going to jail like Causey, the NatWest bankers and Skilling.
What should be the most frightening issue after 4-5 years prosecuting the barge trial, broadband trial, skilling and lay trials and subsequent appeals? It is the lack of conviction of our press to question the “authority” of our governments zeal to make their initial theory a perfect, unmistakable fact. Moreover, it borders on unpatriotic to believe that it may be ego and stubborness that won’t allow these men and women to admit that it is easier to throw the accused to the wolves then save them from the hungry pack. What is the more noble and courageous action? I know, it is to stand up and say we withheld evidence to bolster our case, intimated potential exculpatory witnesses by naming them unindicted co-conspirators and found ways to suppress statements by key players in the Enron downfall all in attempt to make the defendants look more guilty and have little ability to contest our charges. Run on sentences..I know, but I will wait and watch and celebrate when the real story comes out.
I remember as early as 1993 wondering how Enron made money. They would claim profits in the part of the energy bus I was in and everyone knew they were getting killed on a regular basis. My favorite story was a friend of mine who brokered a deal between two Enron traders sitting next to each other. Morons.
As most people know the entire debacle started in mid 80s when Lay fostered an atmosphere of hiring and keeping employees of questionable character.
Even more mind boggling was Enron traders claiming profits on trades done in the future at prices below all time market lows. Mark to model= fantasy=bonus=catastrophe.
The main problem I see with the Enron Task Force is the number of Enron employees who were never brought to justice. Enron Online was a fraud of monumental proportions. Traders would call trading partners and ask them if they could put deals done on the telephone on the internet platform and then claim to WallStreet and investors how wonderful the internet model was. That is Fraud. The dog and pony show for Wall Street featuring phony screens and fake orders was especially despicable.
How does a group of people who flaunted their superiority and intelligence to anyone they encountered or did business with all of a sudden claim ignorance of the obvious shenanigans of an idiot like Fastow? Or the the arrangements that allowed the CFO to profit from financial vehicles that often were add odds with shareholder interests? How do these same self acclaimed nuclear scientists pay bonuses on transactions based on mark to model? I guess I just dont get it.
I do believe Skilling did not deserve his sentence. It seems the Fastow and Skilling terms should be reversed. How does a knucklehead like Fastow keep his job? He was making payoffs with personal checks? How did a knucklehead of this magnitude stay under the radar of Skilling and others?
Skilling like most consultants was not a great manager, they are wonderful with ideas,finding fault,billing hours and spinning a good story but don’t understand the day to day nuts and bolts of running a real business.
Lesson is dont hire consultants to run your business and never tell people how smart you are,cause when you screw up you cant claim ignorance.
Rich Kinder must wake up every morning thanking God he didnt get the job.