This Year, Enron
February 24, 2001
by Gary Aldrich - Volume 2, Issue 9
This article appeared on TownHall.com on Wednesday, February 20, 2002.
Most readers recall I was an FBI Special Agent for 26 years before my complaints about a corrupt White House dramatically altered the course of my life. I now run a foundation dedicated to the support and celebration of whistle blowers - we think these brave souls are really ethical dissenters who find themselves in a corrupted, bloated bureaucracy and should not be attacked for trying to make positive change.
When I was an FBI agent, prior to White House assignment, I worked on "white collar crime" cases. My background and education is in accounting, although I am not a CPA. I worked closely with bank officials, corporate executives, CPAs, accountants, auditors, and others engaged in the science of accounting.
It was not long before my growing experience caused the FBI management to assign bigger and bigger cases to me. The "big-ness" of a white collar crime case in the FBI was partly determined by the number of people involved and their positions in the company. Mostly, the "big" is determined from the dollar amount of the loss. Keep in mind that the FBI has a dollar-threshold that must be met before the agency will agree to handle the case.
In each case we prosecuted, one common thread existed: Greed. Now, the educated and well-informed reader will probably be impatient with me and abandon my piece at this point, but I beg you to bear with me. Donít be irritated with me for stating the obvious - but it must be said in order to bring a proper perspective to the Enron case, and what the mainstream media is currently doing to us. Here is the most important thing I can say about Enron:
In white collar crimes, including Enron, there is nothing new under the sun.
Businesses come and go, and some fail in a rather spectacular way. I would submit that nothing we see today can possibly match the crash of those dot-com companies which collapses began in the year 2000. Review the statistics. There are thousands and thousands of people who are out of jobs and broke financially because of all those business failures. Yes, the media did focus on some of that, but never to the degree that they are focused on Enron.
Ask any employee who worked at any of the high-tech companies what happened when the company gave them stock as employee bonuses. Yes, thatís correct - more than a few of those stocks could not be traded due to a corporate practice called, "handcuffing." Employees could own the stock, but for long periods of time they could not convert or sell the stock.
How do I know this? I have a close relative who was given large blocks of stock in a well known high tech company as "employee benefits," but he could not convert the stock to cash, nor could he trade it. We were so happy for his success then, and at one Christmas gathering we joked about being in the presence of a millionaire. His family was set for life, and his children could attend the college of their choice. He and his wife would be secure, forever. As soon as they could sell the stock. I admit it, I was somewhat envious.
Today, they are lucky to be considered "hundred-aires" and heís lucky to keep his job. But what of his plans for the future which were destroyed? What makes him different from any of the Enron employees who lost everything because they had a portion of their savings wrapped up in 401k plans that were also, "handcuffed?" My relativeís company is still doing business, but the stock went from a high, near ninety dollars, to a low of five, and itís still dropping.
Does the slow death of this major company mean the media is not interested to find out how much the corporate barons there collected before the bottom fell out? And, what about the salaries of those greedy corporate executives? Could there be a memo or two warning that some manner of business tactic was contributing to the overall demise of the company? You can bet your life that there were thousands of "cover your assets" style memorandums written for that very reason - so the writers could cover their rear ends situations where the end was obviously near.
Using a memo for this purpose is as old as the abacus - but that does not make one a whistle blower.
Iíll bet if we look, we will see major cash contributions from my relativeís corporations to politicians on both sides of the political aisle. Would that make the story newsworthy? Will that get them investigated by the FBI?
No, only if the mainstream media is fed the notion that somehow a very successful current administration could be dinged by the embarrassing disclosures. In the case of my close relative, his particular company (that will remain nameless) is not known for its support of conservatives.
I guess the mainstream media will not be interested to know what happened to my close relative and how his financial future has been destroyed by corporate greed.
Greed: a weakness that is as old as the hills, and certainly not invented by anybody from Texas.