Good op ed piece.

 -----Original Message-----
From: 	Sole III, Carlos  
Sent:	Friday, November 30, 2001 10:39 AM
To:	Mann, Kay
Subject:	FW: Criminal Indictments

This will make you mad again.

 -----Original Message-----
From: 	Sole III, Carlos  
Sent:	Friday, November 30, 2001 10:31 AM
To:	'phil_patman@yahoo.com'; Harris, Bruce
Subject:	Criminal Indictments

I'm still sorting through all of the WSJ articles, but if you read this one, I think it's clear that Lay, Skilling, Fastow, Arthur Andersen and others will have criminal prosecutions and disgourgements.  It is very rare that the WSJ with its conservative bent and with a Republican President writes this type of Op-Ed.  Nevertheless, the article already sets the predicate of Lay's defense that he did not fully comprehend what was going on and, thus, lacked the mens rea for the crimes that Skilling and Fastow will be charged with.

REVIEW & OUTLOOK (Editorial)
Investigating Enron

11/30/2001
The Wall Street Journal
A14
(Copyright (c) 2001, Dow Jones & Company, Inc.)

You can cut the Schadenfreude with a machete these days as Enron careens toward failure. Like any fast-rising, innovative business, the energy trader made enemies, some with a fair grievance and some not. We hope the inevitable (and necessary) investigations keep in mind the difference. 
Enron was a forthright advocate of competition, as every obituary of the past few days has noted. Some see the firm's collapse as discrediting the market economics it championed, though the opposite is closer to the truth.
It strikes us that Enron was partly a victim of its own success. Its revenues quadrupled in a year, thanks to the fillip that California's troubles provided to the wholesale power market. But profits were up much less -- i.e., Enron was earning thinner margins in the energy-trading business it pioneered. The new industry quickly became too competitive and transparent to afford any windfalls, just as deregulation admirers would have predicted. 
Enron does not own U.S. power plants and generally did not seem to make outsized profits on power for resale in, say, California. But that didn't stop California's eccentric attorney general, Bill Lockyer, from blaming Enron CEO Ken Lay for that state's electricity mismanagement. Last summer he told a Wall Street Journal reporter that, "I would love to personally escort Lay to an 8x10 cell that he could share with a tattooed dude who says, `Hi my name is Spike, honey.'" Consider that an unfair grievance. 
Accounting matters are more troubling. The struggle for a century has been to make sure corporate managers don't pursue their own agendas at the expense of owners. The emergence of special partnerships, controlled and owned by Enron's own senior officers, with which the company did some of its murkiest deals, would cause even libertarians to wonder what's been going on. Clearly Mr. Lay didn't fully understand what former Enron CEO Jeffrey Skilling was up to, and shareholders weren't told either. 
At the same time, Enron officers had a large amount of personal wealth tied up in Enron stock, which has fallen from $90 to 61 cents. So the mere existence of these partnership deals does not automatically indicate corrupt intent. Only a detailed investigation can resolve whether these deals were honestly motivated, and whether Enron's (and Arthur Andersen's) interpretation of accounting rules was defensible. In any case, trial lawyers will descend to squeeze every penny out of Enron's troubles for themselves (and for shareholders or employees who held Enron stock in their 401(k)s). 
As for the investigations, we hope they won't be influenced one way or another by long connections between Mr. Lay and President Bush. Even the hint of special treatment would be a political disaster, especially for an Administration that promised to clean up after Bill Clinton. 
While tradition has been not to make criminal matters out of accounting scandals, exceptions have arisen recently. Federal prosecutors in New York have gone after Walter Forbes, who sold his company to Cendant, giving rise to what before Enron was the nation's most costly stock meltdown due to bad accounting. San Francisco prosecutors recently extracted guilty pleas from executives of Aurora Foods over their treatment of trade promotion expenses for their portfolio of "orphan" brands as capital expenditures. 
Enron is an opportunity for the Bush team to show it can police similar financial chicanery, if some is found. Sorting the capitalists from the crooks is one way of protecting capitalism.