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FCN EDITORIAL
January 22, 2002

Enron debacle equals corporate terrorism

In the 1980s, then-President George Bush (the father) vehemently denied ever meeting with Panamanian President Manuel Noriega, the head of state the U.S. wanted to convict of drug running. But Bush couldn�t deny that incriminating photograph of the two sitting in a room together obviously involved in a discussion.

Fast forward to 2002 where President George W. Bush (the son) is being questioned about his relationship with top level officials with Enron Corp., the Texas-based energy company that recently collapsed, leaving thousands of employees out of work and their retirement savings completely destroyed. Enron execs were major contributors to the latter Bush�s campaigns for governor of Texas and President of the United States. Enron execs were cozy with most politicos on Capitol Hill, in fact.

While we are not suggesting that the current President might be persuaded to avoid political damage by telling other than the truth about his association with Enron, the nation�s seventh largest company in revenue, we do suggest that the truth in this matter be pursued with the tenacity of the war on terrorism. In light of the devastation wreaked upon Enron employees and other 401K investment companies and individuals who lost millions in stock, what happened at Enron is a form of terrorism that should never happen again.

There are reports that company employees were told by execs at one point that they could not sell their Enron stock because the company was in transition. Meanwhile, a handful of top company officials were unloading stock that brought them tens of millions of dollars.

Did they have insider information? The truth of the matter must be revealed.

Rep. John Dingell (D-Mich.), whose committee is one of those investigating Enron, has already indicated that insider trading might be involved. In addition, the company has been accused of questionable, if not criminal, accounting practices. An Enron employee warned company Chairman Kenneth Lay last August that the company could "implode in a wave of accounting scandals" unless the company halted practices that eventually sent it into bankruptcy. The employee told Lay�in a letter that Congress now has a copy of�that a "veil of secrecy" surrounded the company�s partnerships, keeping large amounts of Enron debt off the company�s books.

The cozy relationship that Enron had with politicians, particularly Bush and the Republicans, put the administration in somewhat of a pickle. Enron and its employees contributed some $5.77 million to political campaigns since 1990, about three-fourths of it to GOP candidates. About half of the money was spent in the 2000 election, with President Bush a major beneficiary. Because of this hefty flow of funding from Enron, perhaps administration officials turned too deaf of an ear to Enron officials who came with hat in hand looking for help as the walls were caving in.

The administration could have sounded an alarm that might have spared a lot of people the pain of losing their retirement funds. Or, any attempt to help the company might have given investigators a lot more to chew on now as they investigated the company�s unavoidable fall.

When the dust settles in the Enron scandal, those guilty of criminal activities�from top to bottom�must pay an even higher price than those loyal employees and trusting investors who lost their nest eggs put aside for their golden years.

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