Sunday, March 13, 2005

Quarrels Among Knaves

I just finished watching ‘60 Minutes’ interview Ken Lay, and I found myself with mixed feelings about the matter. It was like one of those movies which has no hero, no one to admire. I was presented with the unethical behavior of Enron executives, and the sometimes hypocritical positions of the U.S. Government, through the production of a news group not only proven a liar many times over, and also known to pursue stories purely out of spite, but also still in denial of its guilt and overdue reform. Kind of like hearing the Crips talk about reforming our school districts.

Start with the easy target. ‘60 Minutes’ can’t help but project an attitude of condescension for anyone outside the East Coast Liberal cocoon. It doesn’t seem to have dawned on the fellows in the ‘Tiffany Network’s Ivory Tower #2, that their list of unacceptables is now defined by more than three-quarters of the electorate. Mike Wallace has made a pact - one of cluelessness, and less with the Devil, than with Elmer Fudd. They simply do not carry the credibility they think they have.

Along the way, I caught the futile yet predictable attempts to imply a link between Enron and George W. Bush, but I also noticed that ‘60 Minutes’ completely failed to understand the true nature of the Enron scandal - yes, Enron had its crooks, but the real stink came from the fact that Fastow made a deal with the Andersen auditors to cover up Fraud. That was different, enough to be part of the push for what became the 2002 Sarbannes-Oxley Act. I noticed ‘60 Minutes’ hasn’t said much about SOX, probably because it involves accountability and checking facts, things rather foreign to the CBS network.

Things brings me to the focus of the story, and this article - Ken Lay. I have a sneaking suspicion that Ken Lay wasn’t especially dishonest, certainly he wasn’t aware of the goings on by his CFO. But Lay was not, at all, what a Chief Executive Officer should be. Of course, it never struck me, that CBS understood the role and duties of a proper CEO.

In most companies, ‘CEO’ is a glorified title for the guy who actually makes the company happen, who busts his butt and takes more risk than anyone else in the firm. Unfortunately, when you get to a certain corporate level, that all changes. Basically, the major corporation is run by a Board of Directors, which is a committee which usually takes its cues from the Stockholders. And it’s not surprising for a Board to make the stock price and dividends the top priority. With that in mind, how many CEOs do you know enough about, to be sure they’re beng honest?

Fortunately, the tide is turning a bit. I mentioned SOX, which is Government’s somewhat clumsy attempt to set things right. It also happens that Lay is an object lesson; get a CEO who doesn’t look too closely, or worse, gets the idea that a few tricks by the traders is actually good for business, can drive the whole shebang into the ground. Worthless stock gets the attention of shareholders, too. Ken Lay was hired to manage executive operations. Schools give out degrees for economic and business theory, but they don’t hand out guarantees of success. Resumes are nothing but the past, and too many of them brag to excess, also hiding blunders and limitations. Ken Lay accepted the dollars, but not the full responsibility for directing Enron. That, in essence, was tonight’s story.

I have another thought about tonight’s ‘60 Minutes’ show. They also interviewed George Lucas about the next ‘Star Wars’ movie. The interview was a real puff piece, and it occurs to me, it would be just about in character for CBS to have given Jar Jar Binks the fact-checking job for the Ken Lay story.

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