Enron-o-Rama: From Scandal to Spectacle

Whether you think the story of Enron is a political scandal, a business scandal, both, or neither, that story has just reached a critical turning point. Yes, there’s a slew of congressional hearings starting today, and that’s part of what I’m talking about. But the real sign of where this is all heading comes with the startling appearance of Al Sharpton.

You don’t usually see Sharpton’s picture in the business pages, but there he is in this morning’s New York Times (or the national edition, anyway). “Somebody,” Sharpton announced in the course of a news conference at RJ’s Rib Joint in Houston yesterday, “needs to step forward and call the government to bail out the victims.” The story goes on to note that Jesse Jackson plans to be in Houston today. “I think one thing Ken Lay and President Bush should agree on,” Jackson told the Times, “is that these workers need to be made whole.”

I certainly don’t deny Sharpton and Jackson the right to involve themselves in any public issue they want, and I’m not here to bash either man’s political agenda. But their appearances in Houston strike me as pure opportunism. I can’t imagine how it helps, and in fact it seems most likely to prod along the conversion of a spectacular fallen-business story into a mere circus, not so much Enrongate as Enron-o-rama.

It’s pretty unusual for a business story to get this kind of treatment, and that’s just as well. I’ve argued before that the focus in figuring out what went wrong at Enron—and you’ll notice that almost every reasonable story on the subject makes passing mention of the fact that we still don’t actually know what went wrong—ought to remain on the company and on its auditors. That focus ought to get progressively narrower and more sober. Instead it seems likely that it’s going to get progressively more vague and sensational as Enron’s fall becomes the poorly understood backdrop to a lot of hot sound bites.

What does it really mean to “bail out the victims” of Enron? What does it mean to suggest that its workers should be “made whole”? Should those victims be reimbursed in cash at $90 a share for their slaughtered Enron stock? But if Enron was “a house of cards,” as everyone is fond of saying now, then weren’t those shares actually worthless all along? Or should we appoint a blue-ribbon panel to figure out what ENE was really worth? And while we’re at it, what about the various victims of failed companies whose CEOs don’t have presidential nicknames? If I’m not mistaken, other firms’ shares have collapsed; other firms have laid many thousands of people off; other firms have fallen to pieces amid suspect accounting, delusional business models, or even fraud. In the process, many, many helpless victims have been created. Who gets bailed out? Who gets made whole?

I’m obviously not a defender of Enron or its management, and I think it’s a shame that so many of its workers paid a high price for questionable decisions that were well beyond their control. I’ve written before that corporate leaders who reap the benefits of their successes also ought to be held accountable for their failures and, if it turns out that they’ve broken laws, for their misconduct and their lies. Unfortunately, sorting out a story like Enron’s requires some patience. Half-baked grandstanding—and the inevitable waves of backlash that it will trigger—does not require any patience at all. Early on, we wanted to get to the bottom of what happened at Enron. Now it seems that everyone just wants to get in on Enron-o-rama.