I’m playing with my new iPad. I took a screenshot of my blog. I am a simple people.
Monthly Archives: April 2012
WASHINGTON—The Supreme Court on Monday refused to consider a former Merrill Lynch executive’s bid for a new trial on charges that he committed perjury and obstructed justice in a case about a suspicious 1999 Enron transaction.
Former Merrill asset lease group manager James A. Brown argued that prosecutors failed to turn over evidence that could have helped his defense. Mr. Brown was convicted on several charges in 2004, though an appeals court threw out some of those convictions. Only the perjury and obstruction convictions remain.
Prosecutors said Mr. Brown lied about the details of a deal between Enron and Merrill involving Nigerian electricity barges. Enron allegedly sold Merrill an interest in the barges but promised to buy back that interest later if no other buyer could be found. The government said the deal was a sham that allowed Enron to artificially inflate its earnings.
Mr. Brown said he did nothing wrong.
The criminal trial against several executives involved in the barge transaction was the first to emerge from Enron’s collapse.
The Supreme Court on Monday rejected Mr. Brown’s appeal without comment.
This is just infuriating. I’ll have more to say on this later today.
I found a second Tina Fey bit on Enron:
Playboy is planning a spread called “The Women of Enron”. Come on, these women have lost their jobs, their retirement funds, and now they’ve got to lose all but this much of their pubic hair? Come on, Playboy.
Playgirl magazine is planning a spread called “The Men of Enron”. Editors said Enron seemed like a perfect match for Playgirl which is known for collapsing firms.
The post immediately preceding this one was my 2,000th post on the Enron Blog.
If this singular fact does not prove my love, nothing will.
Propagandist Alex Gibney put together a video that was shown at the memorial service for Christopher Hitchens yesterday, April 20, 2012. It has all the quality of something you’d see on YouTube (or less). Like his Enron music video, the subject is a bit larger than his ability, and his artlessness can’t be disguised.
But good for Gibney, for attempting.
I felt shock and cold dread when I saw this:
The obituary is for a gentleman of the same name who succumbed to cancer. Though I am saddened by any death, that little rip in time when for a second I believed that Jeff Skilling had passed away – and that I had found out on the internet – was unlike anything I’ve felt before. It had the potential to be the worst possible thing to happen in a series of awful things.
Today I am thankful that Jeff Skilling is alive. I am thankful that he is still alive to fight his ridiculous convictions. I am thankful that there is still chance for him to triumph. He certainly deserves it.
Big has some strong words about the Clemens trial:
The Clemens trial is turning out to be interesting in some ways.
First of all, the entire thing is a farce. The alleged steroid use was legal at the time it is alleged to have occurred. So all this taxpayer money is being spent because Clemens is accused of lying to the baboons in Congress. So who really cares if a person lies to idiots who had no business questioning him in the first place? Of course, he shouldn’t lie as a matter of personal honor, but when Congressmen are putting on a show for political reasons, they deserve little respect from anyone who is being questioned by them. I mean, come on, this is baseball! Iran is building nuclear weapons, and Congress has a hearing to question Clemens about something that was not even illegal in the first place?! It is just incredible.
Defense attorney, Rusty Hardin, seems to be playing on this: http://blog.chron.com/clemens/2012/04/clemens-lawyer-challenges-congressional-power/
Note, by the way, that Clemens is being given more time for jury selection than any Enron defendant was given. Both the EBS defendants and Lay/Skilling had to go through the entire jury selection in one day!
Oh don’t even get me started on the pathetic void dire in the EBS and Skilling/Lay cases. It’s Friday, after all, and I don’t want to be in a grumpy mood.
[Crossposted from Ellisonblog, though Enron content is minimal.]
Last weekend, I went to a strip club with some friends. One of the rules is “no photos”. They say that when you walk in. So I sat down and an Enron executive friend texted me and asked what I was doing. I told him I was at a strip bar with some friends. This was our conversation:
I was careful when I took the pictures. It felt like both a violation of the rules and a violation of the girls. But I did it anyway.
The whole incident reminded me of a time a few years ago when Big was talking about the men’s locker room. He said he noticed most of the younger men cover themselves as soon as they come out of the shower but the older guys just walk around au natural. He was curious why this was the case. My first instinct was that it was because the younger guys knew the perils of pervasive cameras. They didn’t want a pic of their schlong to appear on the internet.
It occurs to me that in the past we had Big Brother watching our every move. But now we have millions of little brothers watching our every move. We snap pictures of everything; it is sometimes intriguing to wonder how many photos I’ve appeared in, either on purpose, or in the background and whether someone with enough resources could conceivably put together an accurate timeline, based on these hypothetical and disparate photos, of every move I’ve made for the last year or two. We “check in” on Facebook. We post pictures on Flickr and blathering updates on Twitter. There is something strange about this constant surveillance.
We have done it to ourselves. By giving us the technology, we’ve run with it. I don’t think this is a bad thing. In any case, I’m just as guilty as everyone else. I love Flickr. I post photos every single day, no matter how mundane or artless. My Flickr account is actually for me. It is supposed to be a place to “share photos” but I don’t use it that way, though you can, of course, see them. I use them to remind myself of what I saw that day, or where I was – to be more accountable, and to see for myself where my days go, what my priorities are. The fact that you can see them (or most of them) is just a social dividend.
I try not to take pictures of other people unless I have express permission. But sometimes in a crowd, there is no way to get permission. And besides, I live in a city and cities have people, and without the people in the pictures (something I’m actually quite known for), I am not accurately representing the moment.
I love my Flickr account and my blogs, Facebook, Twitter, the multitudes of photos and videos being recorded every minute of every day. I just think it is ironic that the government has outsourced this surveillance to us. We have become little brother and we are everywhere.
And we’re happy this way.
On April 18, 2005, the first Enron Broadband Services (EBS) trial began. I have written about this trial many times before, for example, here. I think what I need to do today is put it in historical perspective.
John Kroger was the federal prosecutor who wrote the original EBS indictment, as well as five of the incredible eight superseding versions of the indictment. Yes, you read that correctly — the government had such trouble coming up with a description of a “crime” at EBS that they wrote an unbelievable nine version of the indictment! According to Kroger’s own words, he rushed to write the EBS indictments because his huge ego made him want to beat the other prosecutors in getting an indictment “on the boards”. Thus, Kroger is the main villain in the EBS prosecution tale — he is the guy who wasted taxpayer money and tormented the families of innocent men, all to serve his own ego which had been bruised when his girlfriend left him for another attorney.
At the time of the EBS trial, Houston, and the entire country, were at the height of the anti-Enron hysteria. The government, even though they had no factual case, was confident that the EBS trial would be a “slam dunk” for the prosecution because of the solid jury bias against Enron. The government was certain that the convictions they believed they would get at this trial would be a perfect segue to the future trial of Ken Lay and Jeff Skilling. The government had reason to be cocky — polls showed that about 90% of the jury pool believed that any Enron executive who was indicted was automatically guilty and should be convicted immediately. In addition, Ken Rice and Kevin Hannon, EBS’s CEO and COO, had given up their defense and entered into plea deals with the government because they believed that the anti-Enron bias was too great to overcome at trial. So the EBS defendants who were bold enough to actually defend themselves, Joe Hirko, Scott Yeager, Rex Shelby, Kevin Howard, and Michael Krautz, faced incredibly long odds at trial.
However, the shallowness of the government’s case became apparent with their first witness. Shawna Meyer, a journalist major, was the lead prosecution witness — the government tried to use her to explain technology to the jury — she attempted to define terms such as “router”, “server”, “network”, etc. As I read the transcript of her comments, they are just laughable. And all the rest of the government’s witnesses had similar issues — they are like a rogues gallery of the EBS rejects: John Bloomer, a guy who tried to steal EBS technology and was fired; Bill Collins, an unbalanced liar who accomplished nothing at EBS but wanted a raise anyway and who was fired; David Reece, a guy who commented on technology but then admitted he had no actual technology role at EBS and was fired.
And then the defense witnesses spoke out: Larry Ciscon, the Rice University PhD software engineer who created the EBS technology in question and had authored a patent on it; Mark Palmer, the head of application development at EBS who was intimately familiar with the technology; Ellis Giles, the software engineer who actually wrote the software code which the government claimed did not exist; David Leatherwood, the engineer who headed the construction of the physical EBS network and facilities; etc. Even the most biased of jurors surely could see the obvious distinction between the credibility of the prosecution and defense witnesses.
But the coup d’etat for the defense was the defendants themselves — they turned out to be compelling witnesses in their own defense. Rex Shelby went first, a brilliant move by the defense team because it set a good tone for the entire trial. People tell me that Rex was eager to take the stand and that he was relaxed, natural, and totally un-intimidated by lead prosecutor, Ben Campbell, who cross-examined him on the stand. I am told Rex’s performance emboldened the other defendants and set the pattern for their testimony.
The trial lasted until mid-July when the jury returned from their deliberations with zero convictions, a number of acquittals, and many hung counts. I hear through the grapevine that the jury was very close to complete acquittals of the three technology defendants, Hirko, Yeager, and Shelby. So the trial was an unmitigated disaster for the government. So spooked was the government by the EBS experience that the it stipulated before the Lay/Skilling trial that it would not even get into the subject matter of the EBS case at the Lay/Skilling trial!
There are so many stunning moments in the EBS trial that I suspect that we will be hearing a lot about it, and the EBS case in general, over the next couple years. The EBS tale would make a great film. With a movie version of “Atlas Shrugged” about to be released, maybe it is time for a film about real businessmen being hounded by the an incompetent and arrogant government!
Incidentally, today is also the anniversary of the daring bomber raid by Doolittle’s pilots on Tokyo in 1942 during WWII. It is like the anniversary of the Enron Broadband trial in this way:
The Japanese Imperial Army thought they had the war sown up and that Tokyo was untouchable by American aircraft. The Enron Task Force thought convictions against the Enron Broadband defendants would be a “slam dunk”.
Both the Japanese Imperial Army in 1942 and the Enron Task Force in 2005 were wrong.
For the past three years (2009, 2010, 2011) we here at the Cara Ellison Blog have celebrated “Jeff Skilling Day”. This year it comes the day after the Supreme Court has rejected his second appeal, which lends a certain poignancy to the celebration.
On April 17, 2001, in the course of a conference call with analysts, Jeff Skilling called Highfields Capital analyst Richard Grubman an asshole [Official Transcript]. Richard Grubman had been asking Enron for its cash flow statement for six of the last quarters. Enron did not have the cash flow statement because it was still collecting and collating information. If Enron had published a cash flow statement at that time, it would have been incomplete and/or incorrect. And yet Grubman kept pushing, and finally Jeff Skilling lost his cool and called him an asshole.
Richard Grubman was, of course, being an asshole. That fact gets lost in all the clutching of pearls. But today we remember it. We remember that Jeff Skilling was a good CEO who was exhausted with the attacks on his company. We remember that he finally slapped back.
For too long in this culture, we have demonized businesses and the people who create them. But today, April 17, I annually thank business people who bite back against the naysayers, those chosen few who stand up and refuse to be kicked in the balls by analysts and media.
Jeff Skilling did a noble thing on April 17, 2001. Perhaps it wasn’t the politic thing. But it was noble to refuse to be bullied. Grubman was attempting to portray Enron Corporation as a secretive and incompetent company when, in fact, it was not. Ken Lay would encounter Grubman again in several month’s time when the company was collapsing and Grubman attacked. Ken Lay, like Skilling, grew exasperated with the sharky analyst and cut him off, though he didn’t call Grubman an asshole as perhaps he should have.
Jeff Skilling is an innocent man. He is a thoroughly decent, kind, brilliant man who did nothing wrong. Today, April 17, we should all give thanks for his toughness as well.
Scott Cohen at CNBC has an article detailing Jeff Skilling’s next steps, including the possibility of a new trial based on new evidence. It is worth a read.
Mimi Schwartz, co-writer of Sherron Watkins’ absurd memoir of Enron, has piped in her opinion of this morning’s Supreme Court decision to deny Jeff Skilling’s second appeal.
Sometimes, you just gotta pay the piper. I have to say I was a little surprised when the Supreme Court rejected Jeff Skilling’s appeal this morning—this court has been more than generous of late toward corporations, after all—but I think I may have been alone in my ignorance.
The SCOTUS has not been “more than generous” toward corporations and in any case, Jeff Skilling is not a corporation, he is an individual human being – a fact that seems obscured in all this jubilant hyena-calling.
More folks around here
Around where? Your office at Texas Monthly?
echoed the sentiment of one attorney, who said, “I’m sure Jeff thinks it’s a big deal, and [his lawyer] Petrocelli thinks it’s a big deal, but after that, for God’s sakes.”
This anonymous attorney’s sentiments are exactly what is wrong with the entire Enron case. It isn’t about your exhaustion or about how you feel about Enron and the charges levied against Jeff. The central crux is whether or not the man is guilty according to the laws of our nation. And the SCOTUS has declared that he is not. But this sort of sniffing around for the next scandal, and leaving Enron in the dust, is not the sign of a great thinking attorney. It is rather an ominous portend of the legal profession.
In other words, he was found guilty, and the Supreme Court still thinks he’s guilty, and no amount of money is going to change their minds.
Money? Where did that come in? The subject has absolutely nothing to do with money.
As Houston criminal attorney and Enron expert Philip Hilder put it, “They heard the arguments and I don’t think they feel there’s anything more to say.”
Philip Hilder is not curiously not identified as an attorney who formerly represented Skilling, as well as Sherron Watkins, and several other Enron executives.
When I wrote about Skilling back in 2010 I thought he might have a chance before the court.
Um… he won at the Supreme Court? You don’t remember this?
At the time, a play about Enron was a hit on the British stage, and I thought it might become a Broadway hit too. But the play bombed,
Wow, this is the second admission that you’re just wrong all the time – why should we take seriously anything you say since odds are you’re going to be wrong?
and, a year later, no one much seemed to care much about the tenth anniversary of the company’s collapse.
Again, you’re wrong. Do you not recall all the tv specials, the massive numbers of blog posts (not just here on my site) and the glowing reviews the tv people put on to congratulate themselves on the coverage of Enron?
History had repeated itself on a much larger scale by then, with far fewer repercussions: “… I can’t help but picture Skilling in his prison cell, feeling like a modern-day Christian martyr. Sure, Lehman is gone, but no one from Citigroup, JP Morgan, Credit Suisse, Goldman Sachs, Morgan Stanley, UBS, et al., is suffering a penance anything like his for coming up with their own unconscionable financial schemes. Those people got bailouts or bonuses instead and are pretty much back to business as usual. Unlike Enron’s meltdown, this financial crisis has yet to produce any real reforms.”
You’re quoting yourself? After you’ve been wrong so often? This is rich. Also: just because a business fails doesn’t mean there is a howling space where reforms need to go. The fact that is where Mimi went with that statement shows she’s looking at it as an anti-capitalist point of view.
And it’s unlikely that it will, at this point.
Still, Skilling has one more shot at a semi-silver lining. “Now the only thing Mr. Skilling has to look forward to is the resentencing by the district court, which will probably end up lowering his sentence some, but not by a lot,” Hilder says. “He can look forward to some minor relief but that’s the end of it. It’s a done issue.”
Actually the resentencing requires the sentence to be lowered because his honest services convictions were thrown out and unless you’re living in Iran, you can’t serve prison time for violating a law that was bad to begin with.
These snippy little diatribes by Mimi Schwartz have all the depth and seriousness of a Spongebob episode. She’s a ridiculous twat who should not be taken seriously by anyone with an iota of common sense.
The Supreme Court has rejected Jeff Skilling’s second appeal.
The high court today refused to hear his appeal of a lower court’s rejection of his theory that a flaw in his earlier trial meant that the whole thing should have been thrown out.
In 2010, the Supreme Court said one of his convictions was flawed when it sharply curtailed the use of the “honest services” fraud law, and told the 5th U.S. Circuit Court of Appeals in New Orleans to decide whether he deserved a new trial. The lower court said no.
Skilling’s next step is to be resentenced, based on the flawed “honest services” conviction.
CNN has a surprisingly thorough yet simple overview of the case thus far.
I’m suffering from some kind of allergic reaction and my face is swollen up (“puffy” is a word that’s been oh-so-cavelierly tossed about these last few days) and bright red and it stings as if I’d washed my face with habanero soap (which, I assure you, I have not done). Since I am basically unfit for appearing in public without frightening small children, I’m inside, watching-and-deleting my DVR stash.
I was momentarily shaken from the abyss of self-pity caused by Puffy Face Syndrome by an ancient episode of Saturday Night Live. In the Weekend Update segment, Tina Fey goes on and on about Enron:
Since I have nothing else to do, and since filming it and uploading it is a pain, I’ve transcribed the bit as follows:
According to financial reports, the Enron Corporation paid no income taxes in four of the past five years. Because apparently apparently for four of the past five years, Enron had its taxes done by Willie Nelson.
Uh.. I’ve been reading about the story all week and I figured out that Republicans are geniuses, okay, because they keep their scandals so incredibly boring that people will stop paying attention to them, right? Democrat scandals have words like fondle, intern and murder. Right? Republican scandals have words like oversight sub-committee chairman, partially-exempted multi-lateral platforms. Come on! So boring!
Basically the Enron executives ran off with hundreds of millions of dollars and let their employees lose their entire life savings, okay? It’s basic evil guy stuff. Like tying ladies to railroad tracks, or trying to take over the world with a laser beam.
Also, Enron had all these shady foreign subsidiaries to avoid taxes, okay? They had 690 subsidiaries in the Cayman Islands.
[Adopting Jamaican accent]: What you do for a job, mon?
I braid the white girl’s hair by the cruise ships, sell a little weed, den on the weekends I’m CEO of a subsidiary of Enron.
Come on. Now, Enron’s accounting firm, Arthur Andersen, is in trouble because they destroyed several month’s worth of Enron’s documents. Okay, in this day and age, how could you possibly not know that if you shred documents you’re gonna get in trouble, right? It’s like if your girlfriend says, “Hey, let’s go on the Jenny Jones show, I have a surprise for you!” How do you not know that’s bad? It’s not gonna be good! Okay?
Then on Friday, Enron fired Arthur Andersen as their accounting firm. Alright? That’s gotta blow, right? To be fired by a totally bankrupt company? Ugh, it’s like Tom Green divorcing Drew Barrymore. You know Drew is like, “Really, so you’re getting rid of me? That’s amazing.”
So now the government is investigating the whole thing, right? John Ashcroft has recused himself because Enron donated money to his campaign. Same thing with George Bush, Dick Cheney, Joe Lieberman, the Commerce Secretary, Treasury Secretary… Basically, the only person without any ties to the Enron Company is that kid from the Dell Computer commercials, alright? Back to you, Jimmy [Fallon].