Integrity Matters
August 13, 2003

Former Enron execs aren't free yet

Newspaper cover Question: (E-060)

Dear Jim:

What next? The Dallas Morning News announces that "Two Top Enron Executives Escape Indictment." Jeffrey Skilling continues to spend time with his family, and Ken Lay is now working at a business start-up. These are the two men who oversaw the highflying Enron Corporation and they are denying accountability for the billions squandered. To make matters even worse, the Justice Department pronounces itself "very satisfied" with the work of its Enron Task Force. This task force has secured indictments of 19 former executives. Is this a justice system with integrity?


Take heart, it is not over for Skilling and Lay -- at least not yet. Apart from headlines, the investigation continues. Many students of the law who are observers of the Enron mess think criminal charges may yet be filed against one or both of these individuals, and relatively soon. If the very slow pace of the investigation frustrates you, you are not alone. About 30 agents of the Federal Bureau of Investigation have assisted the eight or nine federal prosecutors who make up the task force of the Justice Department. They have been working on this case since January 2002. These kinds of investigations are complicated and take time.

Progress is being made: Andrew Fastow, Enron's former chief financial officer, faces 99 counts ranging from obstruction of justice to money laundering. Also, as a result of this investigative process, Enron's auditor, Arthur Andersen, was found guilty of obstruction of justice in a June 2002 jury trial.

There are reports that Lay, 61, loomed large in Houston philanthropic circles and was a top contributor to President Bush's 2000 campaign. Both Skilling and Lay maintain that they knew nothing about the fraud of Enron.

If there was fraud, and there is little evidence to deny gross mismanagement, perhaps criminal intent, by those leading Enron, and still they say that they knew nothing about it, then their board should have fired them for incompetence. If they did have knowledge and are lying, then the justice system can address appropriate penalties. If the leaders knew, and the members of the board knew, and no one blew the whistle, then our federal prisons system may consider building lots more cells.

So very much of what makes our country "tick" revolves around uncomplicated behaviors: We make promises and we keep them. We go the extra mile when necessary and we support one another in hard times. We enjoy success and we avoid excess. We value employees and serve customers. Leaders own the defeats and failures and pass along to others the credit for victories.

When these unwritten rules of management and labor integrity are broken, our system of checks and balances will rise up to make things right. Integrity-centered responsibility reminds each and every participant in the free market system that we must maintain the proper balance between legitimate self-interest and social responsibility.

Destructive and self-serving greed must be regulated.

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