What I found interesting about the details of the Lay indictment is that Skilling seems to be the one to be the target of all the most serious charges about what the company actually did. Lay is mostly hit for lying to investors and analysts. But the most strongly worded charge against Lay as I read it relates to the bank fraud (see page 53 of the indictment), which is all on him personally.

Posted by: mats | Jul 11 2004 14:11 utc | 4

Rahul Mahajan’s post at Empire Notes is a useful supplement to Billmon’s.
The extent to which the Clinton administration exerted diplomatic and economic pressure on behalf of Enron abroad is not widely understood. This shoddy history poses a much bigger obstacle to effective Dem. partisan use of the Enron crimes than Ken Lay’s relatively puny contributions to Ann Richards or his presence on the board of a Heinz-funded org.

Posted by: Nell Lancaster | Jul 11 2004 15:29 utc | 6

“Several of Enron’s unindicted co-conspirators – like the VP of the US and the head of the FERC – are still on the public payroll, and apparently still involved in the cover up…”
Disturbing that this malaise is unremarkable to so many. Eisenhower’s military-industrial complex has come of age, to a universal yawn.
In a not entirely unrelated theater, lies told to make war in iraq have killed thousands. At least in Britain, Blair might pay the price, since few can now listen to his ideas without questioning his fundamental judgement… A brilliant mind who made one major mistake- valuing economic ties before principles. Who speaks for the innocent?

Posted by: Ramlad | Jul 11 2004 15:55 utc | 8

4 more wars – good points. I was merely
reacting to the growing reports that
Britain is now one of the richest nations
in Europe. Blair has some reponsibility.
I grew up in the 80s, when the UK was
universally derided for the abysmal 70s…

Posted by: Anonymous | Jul 11 2004 16:26 utc | 10

4MW,
With all due respect, don’t think Tony’s brilliance is much of an issue here. The main point is that he was corraled into a role from which can cannot escape, and so must continue to go along with a program which is most likely not his own.
This is true with most of these players; they get in and they can’t get out. With Blair my suspicion for a long time has been that he is under the yoke of heavy blackmail; serious shit will happen to him and his family is he steps out of line.
In the Kelly case, in which a lead scientist was snuffed for daring to threaten to tell secrets, the look on Blair’s face when he heard the news spoke more than a thousand words. Fear. He knew he could be next if he betrayed anyone or any compromising information.
Bush is in a similar position but he is dumb enough to sorta enjoy it. What better career opportunities did he have? And he, more than Blair, has been conditioned to believe that he can do anything he wants with no fear of serious personal repercussions. But the Dub too has learned fear, as is so artfully demonstrated in the long lingering shots of his face in F-9/11.
The point is that there really is a bigger, hidden-for-now power back there making all this insane shit happen, while we waste a ton of bandwidth chasing after the puppets.
The evidence is out there and available; I’m sure you have seen a lot of it.
Lupin, One big difference is that J. James and gang got away with it for a long time, didn’t they? Wild West. For comparison look at Waco, where a whole community was incinerated for being a bit odd. Big Brother was beginning to flex his muscles.

Posted by: rapt | Jul 11 2004 17:37 utc | 12

Britain is now one of the richest nations
in Europe.
Well, there’s a humungous property bubble that’s been building up there over the past decade or so that probably accounts for much of this putative “wealth”. And who knows when that’s going to go pop as it can’t be infinitely sustainable (lowest available prices in many places are fast becoming out of the reach of those even on middle-class incomes)?
“Richest nation” also requires qualification, because even if that’s so, it’s not equitably spread. Much of the wealth is skewed towards London and the south-east, and the economy of London itself I think is bigger than that of Finland. There’s some quite horrific poverty if you go north, and a lot of towns such as those in the north-east that historically have seen some pretty serious resistance to the depredations of capital now seem to be zombified out of the fight by a mix of Prozac for the women, Ritalin for the kids and crack cocaine or beer for the men.
Not that I’m gloomy or anything.
But to put this post back on topic: according to Forbes Ken Lay is almost certainly going down:
Lay would have had a slightly better chance had he been indicted for first-degree murder, where 9% of the accused in federal courts were freed last year. The odds of acquittal on securities charges are just more than 7%, and they likely fade even further for multiple-count indictments such as the one Lay faces.
O happy day.

Posted by: four more wars | Jul 11 2004 17:50 utc | 14

America has always displayed a sinful indulgence towards its robber barons
Umm . . . not always. It’s ebbed and flowed throughout our history.
The Anarchist Movement was a time when the rich needed their gun thugs to protect them. There was a bombing on Wall Street — the House of Morgan still bears the scars. In a labor march up 5th Avenue, the protestors rang the doorbells of the rich and powerful — who cowered inside their mansions. Now, they’ve all moved to their estates in gated communities.
In the late 60’s, groups like the Weather Underground targeted the wealthy — that’s what the kidnapping of Patty Hearst was all about.
At any rate, since most everyone would like to be rich, we tend to cut them a lot of slack. When most are comfortable, this is especially so — which is why economic pain is the precursor of political upheaval.
Now, if we can just overcome the wall to wall din of the the right wing media . . .

Posted by: ck | Jul 11 2004 18:19 utc | 16

I can’t get that channel Cloned; can you post a synopsis tomorrow? Would love to hear.

Posted by: rapt | Jul 11 2004 19:11 utc | 18

@rapt
Visit the Guardian website when you wake up. I’ll give my take also later.
Bernhard, you’re in Germany. Maybe a “What the Butler saw” thread could be opened tomorrow.
Blair has to be nailed. Like the Messiah he thinks he is.

Posted by: Cloned Poster | Jul 11 2004 20:01 utc | 20

Clueless, I have come to believe that almost ALL official explanations are lies. In the Kelly case, if you followed it, there was a LOT of evidence pointing to murder; we had means and motive, plus a bunch of physical evidence that was destroyed or suppressed.
BTW, I feel threatened when you lump all the “bastards at the top” into a group that needs to be shot on sight. Can we be a bit more discerning in our accusations?

Posted by: rapt | Jul 11 2004 21:13 utc | 22

Panorama is giving Blair a kicking, video available here (click on “video – latest programme” in r/h corner).

Posted by: four more wars | Jul 11 2004 21:57 utc | 24

rapt: well, indeed, with Kelly there were reasons to kill him, and at first people weren’t so sure he committed suicide. I mean, the British papers and tabloids first articles basically had headlines like “mole found dead”, not “suicidal expert”.
And no worry with my other comments. I mean, it’s silly to dump all the CEOs there, though most of them clearly fit. But if people had any judgment, they could quite easily sort the good from the bad and just plain crooked. But people are coward and prefer to go after weaker than them when it comes to blame the culprits, because the powerful are, well, powerful, and can defend themselves, which the weaker can’t. So, we have far-right fascists claiming foreign workers or Jews are the Enemy that threatens the nation and causes the lower and middle classes to suffer.
I can’t help but feel depressed when I think of what would’ve happened to the world if millions of Germans, instead of being suckered for years and even centuries to think the Jews were the bad guys had, instead of killin millions of innocents, gone after a few thousands of wealthy capitalists that basically owned the country and went fat with the war and the depression. What if the German revolution had succeeded in 1919? No Stalin thanks to a less extreme influence? No WWI? No Cold War? Capitalism forced to find an actuyl compromise? No outrageous American “free-market” empire over the whole miserable planet? Or just more of the same? Or even stalinist take-over in the capitalist West, since there’s no way it could win a world war or even a cold war in the 1920/30s against the combined strength of Germany and Russia?
OK, just another silly rant…

Posted by: Clueless Joe | Jul 11 2004 23:30 utc | 26

I understand where Lupin was coming from…after the Newsweek article re. the possibility of postponing the November election and the resulting blogversations on Kos and Atrios tonight I think he may be right on target, no pun intended. We may have already reached a point of no return, in large part due to the apathy I mentioned in my first post way up top. While I’m no advocate of violence I am an advocate of my freedoms and rights as I have grown to expect them. While certain events may have infringed on those expectations, when I witness the machinations of Ashcroft and Ridge and their color coded claims of falling skies, well, it honestly makes me reconsider my policy of not having guns in my home because of the children. I’m now thinking my children deserve and need such protection, and I’m getting the feeling it won’t be protection from Islamic terrorists that is required.

Posted by: route66 | Jul 12 2004 2:18 utc | 28

Folks, I’m not an economist, and I’m not an investor–only a reader of the WSJ, which I think I can follow some of the time, and know I can’t follow a lot of the time. The value, for me, of the WSJ’s reporting (I don’t bother with its editorial pages), is its effort, in principle, to help us follow the gross outlines, and even some of the nuances, of the big hard stories.
At the time the Enron story broke, I was impressed by the WSJ’s diligent pursuit of the story–so diligent that the paper itself became a player of sorts–and even more impressed by the paper’s own recognition that it had been blindsided by Enron, and by a number of other stories at the time as well.
The story caught them by surprise, not just because of the malfeasances involved, but because of the perplexities involved. No one could follow the thing, and indeed no one had really followed it from the start (somewhere back in ’96 or ’97, I gather, at least where Skilling and Fastow are concerned).
To this day, there are two questions that remain mysterious to me–so much so that I don’t know how to ask them without sounding idiotic. Trusting you folks to forbear, I’ll try to share those questions.
The first question is this: what does it mean when we say that “money is lost”? In the crash of ’29 it seems to have meant one thing, in the events of 2001, it seems to have meant another.
It may be that the word “money” means different things at the two moments in time (I find this counter-intuitive, but I have to put it on the table). But even if the word means one and the same thing, the structural calamities marking the Great Crash seem to have been dispersed, mitigated or largely absent in 2001 and after–“seems,” that is, to the outsider that I am. In my own case, I know that the directors of my state pension fund have joined in a suit to recover some money from Enron, but the money lost, whatever that money “is”, represents a small piece of the pension’s portfolio. Other pension funds, I know, are not so fortunate.
The opacity of the whole thing is not just a function of the outsider’s ignorance in this case, because the insiders were ignorant too. Here, I might mention the point that an M&A guy explained to me once: “these financial instruments are invented during the deal”–he was referring to some M&A deals that had lost me completely–“and they are devised by one side largely to confuse the other. Part of my job is to figure this out, and when I get lost, which happens from time to time, I hold it against the party that can’t explain itself clearly”. This was a bit of common-sense much overlooked in the Enron case, according to the WSJ, etc.
Here’s another instance of such insider opacity: another good friend, an honest and able lawyer who works with FERC, told me a year ago that, to his astonishment, the Enron deals in the California crisis that he’d been studying were not, so far as he could tell, actionable. It was his impression at the time (perhaps his mind has changed since) that Enron had done its homework where the letter of the law was concerned. It was another instance, if you will, of blindsiding: my friend’s sympathies were entirely with California–he was really outraged at Enron–but he could not, in all rigor, find them on the wrong side of the law.
Anyway, I don’t know how badly we’ve been hurt–compared, say, to 1929–and I don’t quite see how it could have been prevented, given the craft and agendas of various players, aided, abetted and enabled by other players. I also don’t know what we “lost”: are we poorer, absolutely, in 2004 than we were in 1994? If so, then the confusion (my own) could be cleared up very quickly.
Talking to Kenneth Lay about these things is surely a waste of time. I don’t see how an explanation, by him, of his misdeeds can be very instructive or instructive. He isn’t inventive enough, he’s really a politician.
On the other hand, talking to Andrew Fastow–if one could catch him in a moment of generous candor, in which he really tried to walk us through the deals as they unfolded–might be a lot more fruitful. Unless, of course, he’s only a sociopath, in which case we’d also be wasting our time. Lay plays dumb, and he’s convincing; Fastow plays smart, and he’s convincing too.
One of these Wall Street guys once gave me a simple rule of thumb for deciding whether a man is a criminal or not: did anyone lose money doing business with the guy? If no one lost money, then you shouldn’t suppose a crime. The positive example would be a Ponzi scheme. The negative example–hard to prove, like any negative–would be Michael Milken. As far as he could tell–and he wasn’t close to the situation, so he wasn’t speaking as an expert–Milken didn’t lose money for people. Rather the contrary.
Which leaves me back where I started: do we know what the word “money” means? I’m not asking–and the questions may be the same, but I need to be shown this, or at least reminded of it–do we know the value of a buck, I’m asking do we know the meaning of “money” as it morphs and swells and shrinks in the world of finance?
I don’t expect an answer to any of this–hell, the question may be too dumb to talk about–but I will admit that it colors my reading of something like the day-to-day account of a trial at law. I don’t always feel enlightened by a trial; as good as the verdict and sentence may be, the trial itself is not necessarily instructive.

Posted by: alabama | Jul 12 2004 6:05 utc | 30

I also forgot to mention that these questions were prompted by four more wars and dirtgirl, along with others on this thread. I’m not at the stage where I can track the specific points you make–whence the lack of focus.

Posted by: alabama | Jul 12 2004 6:22 utc | 32

Bravo, sasando.
I had that coming. Got disoriented between the Annex and here. And was reading too much into Lupin’s post and reaction to it.
If, as suggested above, there ends up being very little legal accountability because of the extent to which the system has been gamed, and next to no redress for all the people who lost money, then… well, Lupin’s point is well taken.

Posted by: Anonymous | Jul 12 2004 12:47 utc | 34

CluelessJoe, I haven’t e-mailed Krugman (he’s a busy man, don’t you suppose?), but I’ve spent some time trying to pursue the questions you suggest. No great progress at this time.
Too many variables? In the Great Crash, money disappeared, consumers disappeared, and manufacturing disappeared. In 3001? Non-money disappeared, consumers remained, manufacturing remained (but not always here, of course).
The “job creation” thing is downright spectral. Reading some things, I think we’re not far from 1934. Reading others, I think we’re not far from 1994. So we’ll just have to work away at this one….

Posted by: alabama | Jul 13 2004 18:24 utc | 36