A Personal Note
I fell while on vacation in December and suffered a compound fracture of my left wrist. Another surgery and uncertain rehab lie in the months ahead. But I am glad to type right-handed, if considerably slower, to continue preparing energy news that can impact your bottom line. My thanks to Stamats management and to editor Dennis Carpenter for their understanding and sympathy for this aging klutz. Please watch where you step.
Enron Deal Stinks
Largest bankruptcy in U.S. history has gotten attention in Washington. Although it owned energy resources, pipelines and generating plants, Enron was essentially an energy broker, buying and selling energy futures contracts, gambling on future prices and market conditions. There were insufficient hard assets to fall back on. Three House committees and two Senate committees plus the Justice and Labor Departments and the Securities and Exchange Commission all announced investigations. Focus is on regulatory failures that allowed Enron executives to defraud investors and workers, plus pension funds across the country, by overstating earnings and understating debts by up to four times. Enron’s demise will scarcely threaten the national economy, but it could be problematic with millions of people depending on energy investments for retirement plans. Six large energy companies competing with Enron issued statements intended to bolster investor confidence and to help assure their financial statements were reliable. Some have adjusted their balance sheets.
So far, no criminal indictments have been announced. Fixing audit rules and protecting pensions may be politically daunting. Stock valuations of other energy firms have declined while the democrats point at the Bush people and they chase the Taliban. Washington lawyer, Lanny J. Davis, said, “The solutions are as obvious as they are unlikely to be met. The rule of thumb must be transparency, in word as well as deed. Of course, this advice to tell the truth has been rejected time and again. Criminals who cook the books should be prosecuted, sent to jail and be required to disgorge all [fraudulent] profits rather than receiving a slap on the wrist and reminder that crime can pay.” If you agree, perhaps you could contact your elected federal representatives.