Austin Suicide Rants About Enron/Arthur Andersen In Goodbye Letter

Many of us, particularly here in Texas, were appalled to wake up to the news that a plane had flown into the FBI building in Austin. Within hours, CNN connected the dots: it was a suicide, the man who had flown into the building was targeting the IRS (not the FBI), and he had set fire to his house before he boarded his small plane.

The suicide letter can be found here. I was amused (yes, amused by a suicide letter) to read a passage about Enron and Arthur Andersen:

He then goes on to explain that Section 1706 basically screwed him over. But I wonder how he got it in his head that Arthur Andersen had anything at all to do with that exception. AA was an auditing firm who, no doubt, did some lobbying, but AA would not directly benefit from that section. Indeed it seems to benefit individuals, not companies. In any case, the guy was seriously upset with AA for its perceived support of this section of the tax code.

Sidebar: CNN censored the word “shit” in the letter; as in “they don’t give a shit about…” I feel like that is incomplete reportage, and it condescends to its readers.

In any case, it seems strange to me that Enron and Arthur Andersen, which existed to do good – and did do good – is seen as the boogeyman not only for politicians, but for a lone wack who flew a plane into a building.

Bethany McLean to Speak – Again – About Enron

It’s only been ten years, but what the hell, why not give the same old speech again. Bethany McLean, the breadwinner of the McLean-Berkowitz union, will be giving a lecture titled “Media as Watchdog: Exposing Corporate Scandal,” on March 4 at Whitman University in Walla Walla, Washington.

Federal Crimes and the Destruction of Law

A friend passed this along to me today and I thought in light of the Enron cases, it is a good read.

Federal Crimes and the Destruction of Law

Domino’s Pizza Ad Addresses Puffery

I admit, it’s a little strange that I’m writing about pizza, particularly such awful pizza, on a blog about Enron. But a new ad by Dominos actually has a legal component which relates to Enron. In the ad, Domino’s “head chef” is standing in front of the John Minor Wisdom Court House in New Orleans — that’s the 5th Circuit Court of Appeals where Jeff Skilling’s appeal and many others from the Enron cases were heard, including Broadband, Nigerian Barges, and NatWest Three. The “head chef” says that they (Domino’s) challenged the Papa John’s slogan in court, and Papa John’s stated that their slogan was “puffery.”

A definition of Puffery is given (“an exaggerated statement based on opinion, not fact.”)

This (finally) connects to Enron because the issue of puffery was brought up in the case of Ken Rice, Joe Hirko, and Jeff Skilling. During Jeff’s appeal at the 5th Circuit, his attorney, Dan Petrocelli argued that some of the “false statements” the prosecution alleges that Skilling made amount to no more than puffery. Puffery is not a crime. Prosecutors also made the allegation against Ken Rice at the 2000 analyst conference on January 20, 2000. Ken Rice made approximately 45 statements during his presentation and four were considered controversial. None of them rose beyond puffery – which might be why the prosecution agreed to let him plead guilty to something unrelated to those statements.

In any case, I thought the ad was a nice, simple way to illustrate puffery. In Enron’s defense, there was not a software company alive in the late 1990s or early 2000s that did not use puffery. They would have had no market if they’d talked down their products, or merely blathered about the technical specifications.

EBS = Google + 10 Years

Google is expanding it’s network:

Google said Wednesday that it will start testing a new broadband network that will deliver speeds of more than 100 times faster than traditional broadband.

The Internet search giant is aiming to link up with states and municipalities to build and test a fiber-optic network that will offer download speeds of about 1 gigabit per second, according to a blog post on the company’s Web site. Google said that speed would be fast enough to download a high-definition, full-length feature film in less than five minutes.

The article annoys me too much to quote entirely. It’s basically the Broadband Operating System/Enron Intelligent Network. Actually, if you look at some of the old EBS documents, you see that EBS preceded many of Google’s “inventions” by at least a decade. The idea of cloud computing and services via network are pure EBS inventions. Google Documents, for instance, was described in great detail in EBS documents, but, of course, not as “Google Documents”.

On the one hand, I am full of pride for the EBS engineers: their work has been vindicated. But I also hate that they are not the ones getting the deserved credit for their work.

Bittersweet.

Cara Ellison And Rex Shelby Discuss Enron Book

Today In Enron History

Today – literally today – February 8, 2010 jury selection and trial was set for former Merrill Lynch executive Daniel Bayly for ridiculous charges related to the Nigerian Barge case. However, on October 27, 2009, the Government filed an unopposed motion to continue the trial date and other deadlines, requesting a May 10, 2010 trial date.

Then, last month, the Government suddenly dropped the case. This seems like such good news. The Enron cases have been a complete bust for the DOJ, and it is likely they didn’t want more egg on their faces. So kudos for them for recognizing that and doing the right thing.

But then they turned around announced they would still try Bayly’s co-defendant, William Furst. This is maddening. William Furst is not guilty of anything at all. The Nigerian Barge deal was a completely kosher deal, and he was not involved any wrong-doing. My heart goes out to William Furst.

Compounding the travesty, there are some similarities to Rex Shelby’s case. Prosecutors seem to have no idea what they’re trying either with the Nigerian Barges or the Broadband case. After ten years, they pursue the defendants until they give up and plead guilty, or they are ultimately defeated. They seem to like the show.

Rex Shelby Heads Back To 5th Circuit

Well, damn, damn, damn! I have discovered that Judge Vanessa Gilmore denied Rex Shelby’s motion to dismiss the few remaining charges against him. The order simply says “DENIED”, without explanation. In essence, this is a non-decision by Gilmore — it means she has decided to simply punt the issue to the 5th Circuit Court of Appeals to let them decide. More wasted time and taxpayer money, and more hardship for Rex Shelby as he appeals, yet again, to the 5th Circuit — I don’t see how he can bear this.

For those who have not followed this blog, let me recap Rex Shelby’s situation a bit. Rex ended up at Enron Broadband because his software company was acquired by Enron. He was not at Enron very long. The first public stock he ever owned in his life, and the first trades he ever made, are the ones the federal prosecutors of the Enron Task Force used to heap scores of criminal counts on him. He went to trial back in 2005. Most of the counts against him have been acquitted by jury or court! The jury hung on the few remaining counts (meaning, zero convictions). A rational DOJ would have dropped the remaining counts back in 2005, but because this is ENRON, the DOJ continued to press.

The recent decision by the Supreme Court on co-defendant Scott Yeager’s case clearly shows that Rex’s remaining counts should be dismissed on double jeopardy grounds, as the DOJ was forced by the Supreme Court to do for Yeager. Rex Shelby joined with the Texas Association of Criminal Defense Lawyers (TACDL) in writing an amicus brief, under his own name, in support of Yeager’s appeal. The chief justices actually adopted Rex’s position in their decision supporting the dismissal of Yeager’s remaining counts. So Rex Shelby helped Yeager win his appeal, but Rex himself still remains in jeopardy!

Now, somebody please explain this insanity to me. Could anything be more clear in the world than that it is time to dismiss Rex Shelby’s remaining counts. He is a decade removed from the events in the shameful government indictment, he has been to trial, he has had most of the charges against him acquitted, and his position on double jeopardy has been written into the language of a Supreme Court decision which has been applied successfully to a co-defendant in the Enron Broadband case!

What more must this man do to receive justice!

DOJ Seeking Mentally Retarded Lawyers

I wish I was joking. And this really would explain so much. But no. Here is the job posting.

The Civil Rights Division encourages qualified applicants with targeted disabilities to apply. Targeted disabilities are deafness, blindness, missing extremities, partial or complete paralysis, convulsive disorder, mental retardation, mental illness, severe distortion of limbs and/or spine.

The other maladies sound just awful. “Severe distortion of limbs or spine”? Whoa.

Anyway, I was unsure whether or not to post this on the Enron blog as a way to explain, perhaps, how John Kroger ended up at the DOJ, but that would be gratuitous. Oh hell, I’ll go for it:

This post completely explains the Enron Task Force.

The mentally retarded, the mentally ill… basically if you are in no way fit to be a lawyer, the DOJ wants you.

[Crossposted, from the Ellison Blog]

Ken Lay Banking Trial Transcript

KenLayBankingTrial

Andy Fastow Interview Notes – 9/20/2001

InterviewWithAndy Fastow – 9/20/2001

What I Know About Enron

This was a graph I made in response to some moron last year. I thought it was funny enough to repost.

Sherron Watkins To Speak At Lynchburg College

Former Enron executive and insider trader, Sherron Watkins, is speaking at Lynchburg College in Lynchburg, Virginia at 7:30 p.m. Feb. 9 in the Memorial Ballroom, Hall Campus Center.

Watkins will discuss “The Lessons of Enron: The Importance of Ethical Leadership.”

It is not known whether she will discuss her admitted federal crimes.