If you haven’t seen the documentary “Enron: The Smartest Guys in the Room,” you are missing out on one of the best pieces of video journalism out there. It is also an enlightening treatise on what is called the largest business scandal in the history of the United States. Not only is this movie about how the Houston-based energy company schemed and defrauded investors and his own employees, but it is also about how other Wall Street and banking institutions hopped on board this greed train.
When I watched this movie again (praise God for Netflix) the other night, I saw it through the eyes of the current sub-prime mortgage fraud and banks behaving badly.
Helping Enron commit fraud and in particular, rob California of electricity power and cause the state to ring up $30 billion in unforseen costs back in 2000 and 2001 were the following: Merril Lynch (three traders were convicted of fraud); Chase and JP Morgan (banks that went along with Enron’s outrageous money-making schemes). There was giant accounting firm Arthur Andersen, which was convicted of obstruction of justice in 2001 but whose conviction was overturned by the Supreme Court in 2005. Still, the once proud firm went from 28,000 employees to a handful and lost all its clients, never recovering from its involvment with Enron as its chief auditing firm.
If the friends of George Bush (i.e. Ken Lay, who was convicted but died a few months before going to prison) didn’t have so much pull, could this debacle have been stopped?
The same question is being asked since 2007 with regard to the mortgage brokerage firms that allowed bad home loans to go through without checking on borrowers income or in some cases, lying on applications.The motivation then, and now, was companies were making money, so who cares!
When will we ever learn in this country?