The Enron Scandal
The Enron scandal has been slow in unfolding. Many people are reminded of Watergate, as bits and pieces of information slide out publicly, showing that the puzzle is far bigger than previously imagined. The secrets contained and hidden by Enron and their book-keeping associates have hurt the economy hugely, while causing many to suffer great financial losses. There are several main things currently occurring in connection with the scandal.
The fact that Enron, one of the largest energy companies in America, could possibly be going bankrupt, is causing unrest in the people of America. The economy has slowly been taking a dive, and Enron’s bankruptcy was a highly painful blow to the stockmarket as a whole. It has eroded the confidence of Americans, making people very cautious in their investments. If such a large, public company as Enron could be hiding their financial losses so well, who knows which other companies are following suit? This very question is planted in the minds of many Americans and is expected in the result of a further declining economy.
When asked whether the predicted results would truly occur, Ghazali Raheem answered, “September 11 shook the consumer confidence of investors as one sector after another was affected. The government was trying to convince people to invest their money once again in the stock market. But people are wary that large companies are hiding their true financial picture and will not go back to investing in stocks. If people do not invest in companies then these companies will not have a source of finances which in turn affects the growth of certain industries and will cause layoffs in large sectors of the economy.” His thoughts mirror the worries of other would-be investors and current investors. All in all, consumer confidence has been lowered greatly by the scandal.
The idea that managerial staff in the Enron company could withhold such information is enough to blow a person’s mind. Tina Raheem says with absolute confidence that ”top management is entirely to blame”. Lower staff and senior managers were left “out of the loop”, so to speak, and were completely unaware of the slow decline of the company. On top of that, the un-informed staff was asked to invest their 401k retirement plans in Enron. When they did this and Enron’s bankruptcy was uncovered, many people lost their life savings.
As if these losses for Enron staff were not enough, a handful of senior managers knew that the stock was going to plunge. To save their own livelihoods, they quickly pulled out their stocks. In doing this, they were not harmed by the bankruptcy, while the unknowing workers were severely harmed. Not only did this upper staff escape financial disaster, some even managed to profit from the catastrophe.
A further worry of the public concerns the Bush administration. There were close ties binding the administration with Enron’s management, and some believe that Bush and company were told not to do anyhting about California’s energy crisis. This is not solid evidence, but is worrisome enough to be investigated by the GAO.
On top of the upsetting advice Enron may have given the Bush administration is the idea that the administration was funded by Enron. This only tightens ties between the bankrupted company and the Bush administration, leading to more worry and doubt that already shrouds the entirity of the event.
What will become of Enron and how this will effect President Bush, Vice President Cheney, and the rest of the administration is yet to be determined. As of now, the main worry clouding everyone’s mind is how the economy will survive these tremendous blows. With consumers too scared to invest and secrecy cloaking almost everything, no one knows what to think or do. One can only wait and see what is left to happen. Felicity Luebke concludes her interview with the statement that “this is just another example of the rich getting richer on the backs of the poorer.”
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