Business Law 100, Enron Failure

. Enron senior management gets a failing grade on the truth and disclosure and a passing grade on arrogance and greed. For Fifteen years Enron was a paper tiger with few questions ever asked concerning its earnings profitability or business practices. The deceit and deception by Enron management seems to be the environment of a divisive marketing campaign that Kenneth Lay, Jeffery Skilling and Andrew Fastow hide while touting Enron. In reality Enron was one of the greatest Ponzi schemes to date, all hat and no horse. The management was superb at financial fraud and unparalleled at persuading the public and investors that they were respectable and legitimate. The money they stole bought a lot of respect and they spent freely on image and luxury in proving Enron was for real
The internal working relationship between corporations or business within Enron would not have been any different than what we saw from the outside looking in. Could there have been changes to the interrelationship of businesses within Enron? Sure, would change made a difference? Maybe not, this is the fundamental issue of why Enron was created in the first place. We must look at the initial key elements of Enron’s beginning, as well as its management, and not be dissuaded from looking at the how and why those individuals ran Enron’s business the way they did. By looking at the relationship of Enron’s internal businesses without first looking at management and others with fiduciary responsibility would be putting the carriage before the horse we would be forgetting that the actual creation or structure of Enron’s business entities were put in place by the management responsible for running Enron and were the real reasons for its failure. We would be remiss for not looking at the impact Kenneth Lay, Jeffery Skilling and Andrew Fastow had on the interactions of the businesses Enron owned and ran. It was their financial manipulation of the businesses within Enron for corporate as well as