Talk:Enron
From Wikipedia, the free encyclopedia
 |
This article is part of WikiProject Houston, an attempt to better organize information in articles related to the city of Houston. If you would like to participate, you can edit the article attached to this page, or visit the project page, where you can join the project and/or contribute to the discussion. |
|
|
| B | This article has been rated as B-Class on the Project's quality scale. (If you rated the article please give a short summary at comments to explain the ratings and/or to identify the strengths and weaknesses.) |
||
[edit] Cliff Baxter
One of the Ex-officers of Enron was found dead with a gun shot wound. The initial ruling was suicide. He was very vocal in exposing the questionable accounting practice of Enron. One may think that he would more likely to speak up and testify than to commit suicide. To me, it is more likely to be a murder than a suicide. This is like the OJ Simpson case. The official verdict and what the public believe are totally different.
Anyone hear the latest news on this?
In response to the dead Enron officer, Cliff Baxter, I have nothing to say that it was almost certainly not murder. I, being from Houston, have many extensive connections to Enron, and a relative of mine knew him quite well. According to her, Cliff Baxter was a man of high integrity and pride that could not stand to go through having many of his close Enron friends (as well as himself, in all probability) be under investigation, and chose to take his own life instead of have to go through such pain and stress.
And believe me, even minor employees at Enron have had to go through an unnecessary amount of stress when they weren't even close to having anything to do with any of the Enron scandal.
I added this link to the Enron page: Suicide note of Enron employee J. Clifford Baxter (Chron.com) --Rj
[edit] Collapse
The article calls the Enron collapse "unprecedented." Perhaps it is in some sense, but even then it would be good to link to the most nearly comparable collapses and scandals.
<Eloquence> Needs to be integrated:
- Five years before Enron collapsed in a big accounting scandal, an executive joked at a party about making "a kazillion dollars" through something he humorously dubbed "hypothetical future value accounting," the Houston Chronicle reported Monday.
- Videotaped jokes by some former Enron executives at a January 1997 party bear ironic parallels to events that helped bring down the energy conglomerate, the newspaper said.
- The videotape, of a going-away party for former Enron President Rich Kinder, features nearly half an hour of absurd skits, songs and testimonials by executives and prominent citizens - including President Bush, the newspaper reported. The Chronicle did not identify the source of the videotape.
- At the party, then-Texas Gov. George W. Bush pleaded with Kinder: "Don't leave Texas. You're too good a man." And his father, former President Bush, told Kinder, "You have been fantastic to the Bush family. I don't think anybody did more than you did to support George."
How exactly was the scandal handled do you think? has it been handled badly or have the people involved been given every oppourtunity to try and get themslves out of trouble? What do you think?
[edit] past tense now?
This appears to be three years out of date. Is the company now defunct? Dunc_Harris|☺ 22:11, 24 Sep 2004 (UTC)
- I know someone who still works there... --Rj 21:54, Oct 17, 2004 (UTC)
Supposedly a shell of an entity exists that is attempting to deal off the assets on behalf of creditors. It still uses the ENRON logo. That the entity remains indicates that the sell-off isn't going well. --66.231.41.57 23:55, 26 May 2006 (UTC)
Check this out: http://www.enron.com/corp/
[edit] Page move
I just figured I'd drop in a note to say that I have plans to move this article to Enron, however that page cannot currently be deleted. The problem is apparently temporary, and should be fixed with the next software update. The reasoning behind my intended move is outlined at Wikipedia:Naming conventions (common names). - Vague | Rant 14:36, May 6, 2005 (UTC)
[edit] California price hike
This quote from the review in the introduction seems a little ambiguous: "as the company drove the price of electricity higher by nine times". Does this means the price was increased in nine separate increments or did the price become nine times higher than the original price? Lisiate 22:42, 29 May 2005 (UTC)
[edit] Accenture
I’m wondering about the principals of Accenture, who left Arthur Anderson in 1989. Could it be thought they left because of rumours then circulating, indicating the bubble was about to break? This is important, since it is held by some that these people were actively involved in the manipulations which wrongfully kept Enron afloat,
>>>>>>>>>>>>>>>>> They left Andersen in 1989 because of the Enron collapse in 2001? You're kidding, right?
[edit] What!!
"based in TK's mouth". Who is TK, what is special about their mouth?
[edit] fallout/aftermath
wondering why this was split like that. most of aftermath contains information about lawsuits filed against a big whig, and fallout mostly contains info about lawsuits filed against other big whigs...would make more sense to move all the lawsuits against big whigs to fallout...no???
- Agreed -- these two sections need to be merged -- Sholom 17:22, 25 May 2006 (UTC)
Arthur Andersen section contains the text "Cocaine played a HUGE role in the outcome of this case", but there is no further explanation or reference. Seems inappropriate to me.Trojan0852 21:44, 17 October 2006 (UTC)
Looks like vandalism.
[edit] 1993: Forbes warned about Enron accounting
Perhaps the earliest method Enron used to whip up nonexistent earnings was to adopt "mark-to-market" accounting. Eventually it was applied to all of Enron's businesses. Effectively, this sort of accounting allowing Enron to theorize how much it would earn in the future from any project and then add all those future profits into current earnings. Nothing prevented Enron from inflating estimates of future profits and thus -- after future profits were "marked to market" -- current profits.
When this story appeared, both Enron and securities analysts pooh-poohed it, regulators and shareholders ignored it, and Enron was allowed to continue down its merry road to crime and bankruptcy.
Unfortunately, the Forbes website doesn't allow links to story this old. (Its online archive stops at 1997.) I don't know how to incorporate this into the Wikipedia entry on Enron. It is copyrighted.
HIDDEN RISKS. (ENRON CORP.) By Toni Mack 24 May 1993 Forbes
On Wall Street and in the oil patch, Ken Lay's Enron Corp. has been a smashing success. Here are some things that could go wrong.
ALMOST ALONE AMONG natural gas pipeline executives, Enron Corp. Chairman Kenneth Lay saw opportunity in the mid-1980s bloodbath of gas deregulation. As the safe world of protected gas markets collapsed, Lay borrowed heavily to acquire and merge four pipelines, thus creating Houston-based Enron in 1985.
And then gas prices tumbled. For a few harrowing years Enron was barely able to throw off enough cash to service its debt.
Today 51-year-old Ken Lay looks like a genius. Enron (revenues, $6.3 billion) sells or transports a fifth of the nation's gas supply; its nine gas-fired generating plants around the globe rank it the world's third-largest independent power producer. Earnings surged 20% last year to $306 million, or $2.58 a share. Another 20% rise is expected this year.
Wall Street loves Enron. Since the start of the year, the stock has jumped 34%, to an alltime high of 63 1/2 in March. Even at a recent 55 7/8, the stock is a rich three times book value and 18 times expected 1993 earnings. The S&P 500 sells for 16 times estimated 1993 earnings.
But overlooked in this euphoria are some big risks Lay is taking as he pushes Enron's profits up so fast.
Lay and his protege, Enron Gas Services Group Chairman Jeffrey Skilling, have adopted some very aggressive accounting practices. In 1991 Enron became the first and only non-financial public company to adopt mark-to-market accounting principles. For Enron, this means it books the discounted present value of future profits from fixed-price gas contracts as soon as the contracts are signed. It works like this:
Suppose Enron has two five-year contracts--one to sell a certain amount of gas to a utility, another to buy the same amount of gas from a producer. Netting one against the other yields a gross profit to Enron of $2.2 million. Enron then deducts shipping costs and reserves for unforeseen costs. That leaves profits of $930,000 over the life of the contracts, or $729,000 at present value after discounting at 8.7%.
This is presumably what an outside buyer would pay for that pair of contracts. So as soon as the contracts are signed, Enron takes all $729,000 into profits immediately. Under conventional historical accounting rules, Enron would spread the profits over the life of the contracts, taking into income just $186,000 per year. Enron Gas Services' Skilling says roughly half of the company's $122 million profit last year came from marking contracts to market in this manner.
What's wrong with this mark-to-market accounting? Nothing--as long as nothing major happens to impair the value of the contracts. But if something unpleasant does happen, then Enron would be forced to book losses as it wrote down the contracts.
Several factors could force such a writedown. Enron has literally billions of dollars at stake in contracts that depend on the company's suppliers, customers and financial partners living up to their obligations. What if a significant number of these other parties can't?
"That's the risk that is the issue," says Skilling. To protect the company, he says he requires contract counter-parties to have at least triple-B credit ratings or similar credit backing. And just in case, Skilling has established a $49 million reserve for unexpected losses.
Is that enough for a $2.7 billion (revenues) gas marketing operation? Good question.
There are other risks. Enron signs contracts extending as long as 20 years. Political winds, though, are hard to predict even a few years out.
Take Clinton's proposed energy tax. What if the tax on gas were to land on middlemen like Enron? Not passing along the tax could seriously hurt Enron. Yet when FORBES asked Lay whether Enron's sales contracts allow Enron to pass along such a tax, he replied that only "some" contain such protection. Enron now says "most" do.
A third risk involves Enron's ability to keep signing more and more new contracts year after year. Explains Jake Ulrich, senior vice president of Enron's biggest rival, $2.5 billion (sales) Natural Gas Clearinghouse: "If you accelerate your income, then you have to keep doing more and more deals to show the same or rising income."
Retorts Enron President Richard Kinder: "We think we can maintain a 20% or better growth rate {in gas services} each year."
So far Wall Street is putting its collective faith in Lay. As Donaldson, Lufkin & Jenrette analyst Curt Launer puts it: "You have to give them {Enron} the benefit of the doubt."
Maybe so. But given Enron's high price-to-earnings multiple, Ken Lay has no room to disappoint.
[edit] Trial
Hello? The trial started and nobody is going to say anything until it is over? Trust in wikinews, eh? Holon67 16:06, 4 February 2006 (UTC)
- I removed the gibberish "jkkjkj" from the "accounting section. anonymous March 8 2006 1411 PM
I have deleted a paragraph that suggested that the cases against Lay and Skilling as 'difficult' because the 'difficulty' is now irrelevant after their convictions for sundry offenses. Speculation on the results of any legal case is quite risky for its slight value.--66.231.41.57 23:58, 26 May 2006 (UTC)
[edit] Missing info
From watching the 2005 documentary, I miss several things:
- The California rolling blackouts and how Enron traders shut down centrals and exported energy to artificially rise demand.
- The cost of the crisis for Gray Davis.
- The connections with both George Bushes.
- An explanation of accounting tricks like mark-to-market
- Lou Ling Pai
- Document shredding
- "Ask why" as the slogan.
- The accolades given by major banks. I only remember Citibank and Deutsche Bank
Could someone knowledgeable add mentions?
-As it looks right now, the whole article is three pages long. Vandalism maybe?
Separately, there are major parts of the Enron story that haven't been discussed in this article at all. Where is the discussion of the Indian deal? There is barely any discussion of the Fastow partnerships. Sherrin Watkins's name never appears in the main text. There is no discussion of the California energy crisis or the lockup on the 401(k)s. The article devotes space to relatively trivial matters and never touches on many more important things. Uucp 02:37, 21 June 2006 (UTC)
[edit] Growth of Enron
The growth of Enron should included deregulation of industries, and then rewards to the lawmakers that sought this deregulation. An example might be Wendy Lee Gram former head of the Commodity Futures Trading Commission (CFTC) ruling to exempted Enron from federal regulation on some of their commodities trading. She was named to the Enron's board, five weeks after stepping down from the CFTC.
Sources: http://www.pbs.org/wgbh/pages/frontline/president/players/gramm.html http://en.wikipedia.org/wiki/Wendy_Lee_Gramm
Under the section, "Growth of Enron", there are factual errors (founded in 1730 by Kobe Bryant, etc..)
That's called vandalism...--ᎠᏢ462090Contribs 23:59, 2 May 2006 (UTC)
[edit] California
Shouldn't this article say something about the California electricity crisis, one of Enron's biggest manipulations? Also mention the suicide of J. Clifford Baxter? (Not just have unexplained links to them at the end.) User:Bfinn|Ben Finn]] 15:43, 13 May 2006 (UTC)
[edit] Later insider trading
Toward the end of this section, it's stated that Lay sold $70 million worth of Enron stock, at the time when it was below a dollar a share. That suggests 1)that that chunk alone was once worth about $6 billion, and 2)that he was a pretty dumb crook. Can someone fix this timeline? Sfahey 02:28, 26 May 2006 (UTC)
-
- The timeline is confused because it mentions the <$1 figure before it talks about Lays's unloading. I'd guess he sold out in the 10-20/share range. I'll sort of remedy it. "Wildcatter"
[edit] Whoa, badgers!
I've semi protected the page on a random previous version. - brenneman {L} 14:19, 26 May 2006 (UTC)
- Yea, it might be a good idea not to just revert wildly next time, everyone. After someone has done three + 1 reversion (at that's if we call this a good faith ) than just make a report and let the "wrong" version stand a few minutes. Otherwise it fills up the history needlessly.
brenneman {L} 14:30, 26 May 2006 (UTC) - Thanks brenneman. Who should we report to? It's not very easy to find this information on wikipedia... Answered my own question - WP:AN3--Dilaudid 11:33, 27 May 2006 (UTC)
The wording here is quite informal: "If the Enron traders were indeed participating in insider trading during the 1980s, they apparently did not learn their lesson from nearly being caught by David Woytek and John Beard. To the auditors, it seemed that Enron would become caught up in the race for higher profits and would pursue them even if it meant using illegal practices." I'm just a user so I do not want to edit it, also sorry but I do not know the policy for suggesting things.
[edit] zeitgeist?
entered the zeitgeist? is it just me or is that profoundly wrong? popular vernacular, or english language, or something, but not zeitgeist surely? also, if i spelled zeitgeist wrong then sorry, i am too lazy to look it up again. WookMuff 23:48, 27 May 2006 (UTC)
-
- I'd say it is close, but I don't think something can "enter" the zeitgeist. Also I don't think it should be linked. Sfahey 01:04, 29 May 2006 (UTC)
-
-
- Agreed. My understanding of zeitgeist is it is more the popular mood of people, rather than the consciousness (i.e. Free Love in the 60's etc). So unless the contributor is trying to say that this conduct has been accepted as popular practice in coroporations, I think it is misplaced. I'll try and reword it better. --Nickj69 09:39, 31 May 2006 (UTC)
-
[edit] What post "Gulf War" contracts did Enron seek?
What post "Gulf War" contracts did Enron seek? What contracts were granted?
As referenced in the Wikipedia article as of 11:00 EST 07/05/2006 http://en.wikipedia.org/wiki/Kenneth_Lay "Lay maintained business and political ties to Republican government officials, hiring (for example) James Baker and Robert Mosbacher as they left the Cabinet of President George H. W. Bush (both men lobbied for Enron contracts in the wake of the First Gulf War)."
[edit] Conspiracy
I found a interesting article. Anyone agrees that it could contribute to the article?--Striver 03:31, 13 July 2006 (UTC)
[edit] Internorth History
I deleted the history of Internorth from the Growth section because it is not really pertinent to an article about Enron, and the article is already long and dense with information. Enron began with the merger between Houston Natural Gas and Internorth in 1985. An article about Internorth should be created if people are interested in that information.
[edit] Enron traded more than 0 different products??
"Enron traded more than 0 different products including the following." from the article. Zero products? someone who knows the number please correct it asap. --Idleguy 06:01, 5 September 2006 (UTC)
[edit] Problems
This strikes me as one fo the worst articles on wikipedia. I'd like to start wholesale revisions and I thought I'd discuss a little first. The most obvious problem is the "insider trading" section. The phrase insider trading has a specific legal meaning that is not the same as "anything bad inside a company," which that section seems to describe. The 1908's oil trading affair, the special purpose entities, and the debt have nothing to do with insider trading. Secondly, there is very little in the article about what specifically was worng with the company when it collapsed: "...its reported financial condition was sustained mostly by institutionalized, systematic, and creatively planned accounting fraud" seems a bit of a stretch. It was, after all, the 7th largest US company, legitiamately, before it collapsed. Anyone making that claim should be able to name specifically what was wrong. Is anyone going to freak out if I start major edits? 71.106.22.247 23:09, 23 October 2006 (UTC)
[edit] Stock
At the time of its collapse, what was Enron's stock like? On a graph, did it just go straight down? And, what was its stock ticker?--Weatherman1126 (talk) 00:49, 31 October 2006 (UTC)
[edit] Decline and insider trading section
I added neutrality or factual accuracy tags on the Decline and the Insider Trading sections. (I have no complaints about the second half of "Decline".)
These sections state that Enron was regularly committing crimes over a decade before its final collapse, and that this was well-known. Also, some language criticizes the company: "they apparently did not learn their lesson...." and "Enron would become caught up in the race for higher profits and would pursue them even if it meant using illegal practices." This makes perfect sense with hindsight, but I don't think it accurately represents Enron's state and image long before it blew up. After all, the article states that "Fortune named Enron "America's Most Innovative Company" for six consecutive years", i.e. it was previously seen as an important, legitimate company.
Pcu123456789 00:29, 15 November 2006 (UTC)
[edit] enron entry
I believe the first sentence in the Enron entry(Enron Corporation was an American energy company based in prostitution ans blwjobs Houston, Texas) needs serious editing
Rusty Ford —The preceding unsigned comment was added by 67.166.110.102 (talk) 12:52, 12 December 2006 (UTC).
