Integrity Matters
February 9, 2005

Enron's leadership will pay for behavior

Question: (E-170)

Dear Jim:

The disgraced Enron leadership was involved in sinister plots to steal money from Californians. How criminal and sick were those individuals who allowed fraudulent schemes to drive up prices by falsifying electrical transmission schedules, forcing unnecessary and risky rolling blackouts?


Enron leaders, so it appears, used information to dupe the public, even those in government. The firm's leaders lied, cheated and stole to increase power prices and fatten profits, creating incredible bonuses for top executives. Some newly reveled memos confirm that those in power at Enron knew what they were doing.

Certainly, this is bad news. The good news is that something is being done about it. Our justice system is addressing the issues, and those responsible are being prosecuted. Now that these illegal behaviors can be traced to the desks (and the email) of Jeffrey Skilling, John Lavorato and Tim Belden, it follows that penalties will be assessed in dollars, jail time and ruined reputations. A time of reckoning has come for many who would manipulate laws and regulations for self-serving purposes. The scoundrels are being rounded up and prosecuted, finally.

To learn even more about the Enron debacle, read the Smartest Guys in the Room: "The Amazing Rise and Scandalous Fall of Enron" by Bethany McLean and Peter Elkind. The Enron collapse, they write, is "fundamentally a human drama - of people drunk on their own success, people so ambitious, so certain of their own brilliance, so fueled by greed and hubris that they believed they could fool the world."

Though other business scandals would follow, none has had the shattering effect of Enron's bankruptcy, which caused Americans to lose faith in a system that rewarded top insiders with millions while small investors - including many employees - lost everything.

According to the authors, "Wall Street knew about Enron's shenanigans and chose to look the other way. Just as Watergate was the defining political story of our time, Enron is the biggest business story of our time."

These wheeler-dealers' egos and arrogance took control of their judgment. Greed replaced conscience and seemingly any sense of fair play. But justice will prevail. In our hearts we know that integrity-centered leadership is the only reliable foundation for long-term success.

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