Tuesday, October 28, 2008

Stating the Obvious

The Wall Street Journal today repeated a point that I made in Wall Street Versus America, in a Salon article two years ago, and in this blog countless times: that the lessons of Enron have been lost, and that regulators have learned absolutely nothing from the corporate scandals of the early part of this decade.

Today's financial crisis has shown what a real debacle looks like. And it has made clear that executives' duties to public companies have, if anything, been loosened, not reinforced. What is worse, the post-Enron crackdown appears not only to have failed to stop flagrant corporate risk-taking, but to have lulled Washington to sleep.

"Enron was a gnat compared to what's going on," said Sidney Powell, a Texas attorney for former Merrill Lynch & Co. employees. Those employees still are awaiting retrial for participating in a Nigerian power deal with Enron in 1999. "There is blame far and wide here, beginning 20 years before. [Securities & Exchange Commission] failure. Congressional failure. The whole system needs to be retooled."

This is a problem that one sees with the law-defying gnats of Corporate America, such as my favorite corporate fraud poster child Overstock.com, and the burned-out carcasses of Wall Street. It is as if Enron never happened.

The two presidential candidates, while vaguely running against Wall Street, have been slim indeed in the specifics of what they will do to rescue the regulatory apparatus from years of neglect.

© 2008 Gary Weiss. All rights reserved.

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