The corporate fraud surrounding the collapse of energy corporation Enron in 2001 has come back into the national spotlight. With the new media attention, now serves as good a time as any to redefine who will be held responsible for corporate fraud.
Wednesday, a sealed indictment against former Enron chairman and chief executive Kenneth Lay was delivered by a grand jury. The indictment, to be opened today, is said to accuse Lay of knowingly misstating profits and company prospects before the company went bust, taking the investments and life savings of private investors down with it.
“I take full responsibility for what happened at Enron,” Lay said in an interview with the New York Times last week. “But, saying that, I know in my mind that I did nothing criminal.”
Enron “cooked the books” so badly that in 2001, the company was forced to “correct” previous earnings reports ranging back to 1997, leading to $1 billion in debts by the third quarter of 2001. This, among other similar announcements, sent the stock into free fall. Investors lost as much as 89 percent of their money within one year, according to a timeline compiled by the Houston Chronicle.
How could such events have occurred while Lay was CEO if he claims no knowledge of how bad the situation was?
The problem, however, is not only the individuals that chaired Enron, but also high-ranking officials in the government who played into their hands.
Vice President Dick Cheney met with a secret energy task force even before the Bush administration took office. Bush’s presidential campaign received $1.14 million from Enron. It is safe to assume that Enron, a large energy supplier, was in on the task force, but since the Supreme Court recently ruled that Cheney will not have to turn over records that would reveal who was actually in on the meeting, it remains uncertain.
Yet, President George W. Bush spoke of “corporate responsibility” when visiting the USF campus in 2001.
It appears obvious that our society, increasingly under the control of large corporations, will have to re-evaluate how to hold corporations and officials responsible for damages they incur on citizens. It is simply unacceptable that citizens’ rights to protection take a backseat to the moneymaking endeavors, be they legitimate or illegal, of corporations.