Word: enronization
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...workers. Its stock, which peaked at $64.50 three years ago, stopped trading last Tuesday at 83[cents], having all but wiped out employee retirement accounts. The plunge in WorldCom shares has cost investors upwards of $175 billion--nearly three times what was lost in the implosion of Enron. WorldCom is not yet financially bankrupt, but it's clear that it--like a fat slice of corporate America--has been ethically bankrupt for years. We're only now getting a look at the red ink on the moral balance sheets, and new revelations of malfeasance in one company after another...
...apples and oranges," insists Communications Director Dan Bartlett comparing the accounting practices at WorldCom and Enron and those that led to a 1990 SEC investigation and restatement of Harken's earnings. The distinction, say administration officials, is not only that Harken's restatement was in millions, not billions, but also that the company was merely caught being aggressive, not fraudulent. Many corporate executives currently under the bright lights are saying a version of the same thing...
...stinging new Congressional report, obtained by TIME, mocks claims of ignorance by Enron board members like former CEO Ken Lay and Wendy Gramm, the wife of Texas Senator Phil Gramm...
...federal regulator during the previous Bush Administration, Wendy Gramm promoted a lucrative regulatory exemption that benefited Enron, and then became a director of the company months later, in 1993. She also served on Enron's crucial audit committee as the board "knowingly allowed Enron to engage in high-risk accounting." Another of the report's conclusions is that Enron directors were aware of everything from extensive off-the-books deals to conflicts of interest and excessive compensation for senior executives - and did little or nothing about the alleged transgressions...
...Chairman Carl Levin of the Senate's Permanent Subcommittee on Investigations (which issued the study) also blasts directors for "failing to acknowledge" their share of the blame for Enron's collapse. A lawyer for the board called the report "very unfair," but it will be welcome news to shareholders seeking billions of dollars in compensation from Enron; they could get a legal boost from the 60-page document. The bipartisan study also raises the likelihood that one-time Enron board members will come under renewed pressure to resign directorships at other major corporations like Lockheed Martin and Qualcomm. Wendy Gramm...