Enron Debacle: Review Of Kurt Eichenwalds Conspiracy Of Fools A True Story
Title: Conspiracy Of Fools: A True Story
Author: Kurt Eichenwald
Publisher: Broadway Books (A division of Random House)
As I reached the end of the 675 - pages of Kurt Eichenwald's saga of Enron recounted in Conspiracy of Fools A True Story, I walked away shaking my head in disgust and at the same time shock!
Award winning journalist, Eichenwald, has written for the New York Times for more than seventeen years. Letting the facts tell the story, Conspiracy of Fools, A True Story, is based on the author's more than one thousand hours of interviews he conducted with over a hundred participants. Combing through thousands of confidential corporate and government documents, contemporaneous records, personal diaries, and best recollections of the participants, the author delivers a compelling and superb recounting of just what transpired- all with believable dialogue.
It is difficult to conceive just how was it possible that a prestigious accounting firm, Arthur Anderson & Co, could with just a wink and nod accept the creative accounting shenanigans that were practiced at Enron?
Although, it should be noted that Enron, at the time and prior to the change in the rules of acceptable accounting practices for energy companies, was legally permitted to use "mark to market" accounting, which allows companies to count as current earnings, profits they expect to earn in the future, from energy-related contracts. This was very cleverly used to prop up the balance sheet, keeping the banks and credit raters content.
Can we honestly believe that so called "smart" business people like Ken Lay, Enron's Chairman and CEO and Jeff Skilling, its President, did not know about or were not concerned with the fraudulent activities of their chief financial officer, Andrew Fastow?
Even until the end of his days at Enron, Fastow never did explain in a precise manner the poor financial condition of the company that had been the result of his incompetence and venality.
Furthermore, through the ineptness of Fastow, Enron was not tracking their cash in order to know when they were experiencing shortfalls-an essential requirement to know when and if they could pay their bills.
Apparently, nobody had a clue as to how much daily cash was collateral posted by trading partners and how much was coming in from the business.
What is so mind-boggling is Fastow's paradoxical behavior. He may not have understood basic business principles or Finance 101, however, he was quite clever in swindling from Enron over sixty million dollars with his masterminding of off -the- books personal partnerships, wherein he hid billions of dollars in debt and artificially boosted the company's profits.
As long as the share price of Enron was propped up and be damned at everything else, everyone went along for the ride without digging too deeply and asking too many questions. The old adage, "hear no evil, see no evil."
Eichenwald also brings to light how Enron became involved in all kinds of activities that had little to do with their principal line of energy business. As the author states, under the stewardship of Skilling, Enron was changed into a radically different beast.
This all led to Enron's pursuing of contradictory strategies and a loss of focus, wherein you had at the one end dealings that brought in huge earnings with little cash that were dependent on Enron's credit rating. On the other hand, you had activities devouring huge amount of cash, while producing very little earnings for years that would potentially put their credit ratings at risk.
Furthermore, our CFO, Fastow, did not have the foggiest idea about how to calculate investment returns!
You had a company that lied to its investors, hid losses to make itself look good, and executives who siphoned off company funds, all under the noses of their top officers.
A recipe just waiting for disaster!
In all fairness, I should add that there were several executives, who to some degree, did complain about some of the creative accounting that was going on at Enron.
This is a remarkable and engrossing read that chronicles a multi-billion dollar sham that came to light in 2001.
One question, however, still lingers on in my mind, how many more Enrons are there lurking in the shadows? Will we ever put an end to this shameless behaviour on the part of some public companies? Just ponder the wider effects it has on innocent employees, who not only loose their jobs, but also in many instances, their life savings and pension plans?
Just in passing, Ken Lay has been indicted and faces criminal charges that include security and wire fraud and making false statements. Jeff Skilling, likewise, faces thirty- six charges, including fraud and insider trading. Fastow has pleaded guilty to two counts of wire and securities fraud and is now serving a ten- year sentence without parole. He has agreed to co-operate with the authorities. Stay tuned.
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King County (WA) Library System, the nation's top digital-circulating library has said it will stop buying new release Macmillan e-books once the publishers' two-month embargo begins next month.
In her note, executive director Lisa Rosenblum said King County's decision was ultimately driven by two reasons: one "pragmatic" and the other "principled." ...
As for the pragmatic side, Rosenblum explained that King County has pledged to readers to limit the wait time for any title to around 3 months. "Not allowing us to purchase multiple copies of an e-book for two months artificially lengthens the queue, triggering more of the same title to be purchased than would have occurred if we had been allowed to buy for the first two months," ...
The "principled" argument, Rosenblum says, is to send a message to other publishers that public libraries cannot accept limits on basic access. To do so, she writes, would "profoundly" change the public library.
By any measure in publishing, cartoonist Dav Pilkey is a rock star. The children's author created his characters Captain Underpants (a superhero for grade-schoolers) and Dog Man (a hound-supercop) while an Ohio second-grader, sitting alone in the hall during class as a result of his ADHD.
Now Pilkey is 53, and "Dog Man" — a franchise that has sold millions — is perched atop the New York Times bestsellers list for children's series, while "Captain Underpants" is at No. 8 (both books have sat on the list for years)....
The judges of this year's Booker prize have "explicitly flouted" the rules of the august literary award to choose the first joint winners in almost 30 years: Margaret Atwood and Bernardine Evaristo.
The chair of judges, Peter Florence, emerged after more than five hours with the jury to reveal that the group of five had been unable to pick a single winner from their shortlist of six. Instead, despite being told repeatedly by the prize's literary director, Gaby Wood, that they were not allowed to split the £50,000 award, they chose two novels: Atwood's The Testaments, a follow-up to her dystopian The Handmaid's Tale, and Evaristo's Girl, Woman, Other, which is told in the voices of 12 different characters, mostly black women.
Harold Bloom, the eminent critic and Yale professor whose seminal The Anxiety of Influence and melancholy regard for literature's old masters made him a popular author and standard-bearer of Western civilization amid modern trends, died Monday at age 89.
In response to Jennine Capó Crucet's talk on the Statesboro, Ga., campus Wednesday, where she focused her discussion on white privilege, students gathered at a grill and torched her novel "Make Your Home Among Strangers" — about a first-generation Cuban American woman struggling to navigate a mostly white elite college.
Yesterday, The Nobel committee announced the winners of both the 2018 and 2019 Nobel Prize for Literature. The 2018 prize having been canceled last year due to controversy. Over to Ron Charles at The Washington Post
...Two years ago, the husband of one of the academy's members was accused of multiple counts of sexual assault and eventually convicted of rape. The ensuing scandal tore apart the committee, exposing a history of lax regulation, a deep well of bad judgment and a vein of misogyny. Some members resigned, others refused to participate. The Nobel Foundation, which funds the award, raised serious concerns about the committee's governance. The future of the literature prize seemed imperiled...
And then came Thursday's announcement of the winners of the 2018 and 2019 Nobel Prizes in literature. The big test: an opportunity to show that the committee members could, in fact, carry on Alfred Nobel's vague instructions to select "the most outstanding work in an idealistic direction."
First, the 2018 prize was awarded to Polish author Olga Tokarczuk for what the judges praised as "a narrative imagination that with encyclopedic passion represents the crossing of boundaries as a form of life."
But then the other shoe — or jackboot — dropped, and any celebration of Tokarczuk's work was hijacked by a fresh controversy: The Swedish Academy awarded the 2019 Nobel Prize in literature to Peter Handke. He's a controversial Austrian writer known for his sympathy for the late Yugoslavia leader Slobodan Milosevic, who was accused of genocide. Handke not only attended that butcher's funeral, he delivered a eulogy...
... This is no way to demonstrate good judgment or to regain trust. It's just another tone-deaf stunt by a group of Swedish snobs who command a disproportionate and undeserved wedge of the world's attention.
Update 10/17: Writing an opinion piece in the New York Times
, Bret Stephens argues that "we live in an age that is losing the capacity to distinguish art from ideology and artists from politics."
The Swedish Academy announced this morning two winners of the Nobel Prize for Literature: Peter Handke, the Austrian author, playwright and translator, wins the 2019 prize, and Olga Tokarczuk, the Polish novelist and poet, wins the 2018 prize, which was not bestowed last year because of a scandal involving sexual assault allegations and financial impropriety involving the Academy.
Handke was cited by the Swedish Academy for "an influential work that with linguistic ingenuity has explored the periphery and the specificity of human experience."
Tokarczuk was cited for "a narrative imagination that with encyclopedic passion represents the crossing of boundaries as a form of life."
Controversy over Handke's award immediately broke out. See 10/11 news post for more on this.
The twenty-five Finalists for the 2019 National Book Awards for Fiction, Nonfiction, Poetry, Translated Literature, and Young People's Literature (YPL) were announced today. The five Finalists in each category were selected by a distinguished panel of literary experts, and were advanced from the Longlists announced in September. Between the five categories, there are four writers who have been previously honored by the National Book Awards: Akwaeke Emezi, a 5 Under 35 Honoree in 2018, Toi Derricotte, a Literarian Award recipient in 2016 for her work with Cave Canem, Jason Reynolds, a 2016 YPL Finalist and 2017 YPL Longlister, and Laura Ruby, a 2015 YPL Finalist. Four of the twenty-five Finalists are debuts. ... The Winners will be announced on Wednesday, November 20 at the 70th National Book Awards Ceremony and Benefit Dinner.
The New York Times has just published a powerful article on how governments across the globe are spending a remarkable amount of resources attacking books. Because this is an important article and many BookBrowse readers may be blocked from reading the full piece by the newspaper's paywall, here are four of the most salient paragraphs:
…Regimes are expending so much energy attacking books because their supposed limitations have begun to look like strengths: With online surveillance, digital reading carries with it great risks and semi-permanent footprints; a physical book, however, cannot monitor what you are reading and when, cannot track which words you mark or highlight, does not secretly scan your face, and cannot know when you are sharing it with others….
…During the Cold War that followed, the federal government established a network of 181 libraries and reading rooms in over 80 countries. In 1955, specially-made lightweight copies of Animal Farm were flown from West Germany into Poland by balloon. The unifying principle — despite the terrible hypocrisy of Jim Crow — was that freedom of thought abroad would ultimately favor the spread of tolerant, free liberal democracies…
…The tepid response of the Trump administration to the murder and dismemberment of the Saudi critic Jamal Khashoggi is just the most egregious example of why the global defense of freedom of the press and speech is no longer an American priority. The State Department has made barely a peep about any of this. Perhaps it should come as no surprise coming from a president who is almost comically boastful about his antipathy to reading…
The consequences of America standing by apathetically could be disastrous — particularly if Mr. Trump and his secretary of state, Mike Pompeo, remain in power for another four years. In classic dystopian novels of the near-future — Brave New World, 1984, Fahrenheit 451 — the digital world is ubiquitous. The ghostly absence of books, and the freethinking they seed, is the nightmare. For much of the world, it's not an impossible fate
Penguin Random House Audio has released a free, 30-minute audio reading of The Whistle-Blower Complaint. It was recorded by Saskia Maarleveld, a professional audiobook narrator.