Cruver was an inside witness to the greatest act of economic terrorism ever. Enron had hired nothing but the best and the brightest. They bragged about letting go 15% of the workforce every six months; those who could not measure up to the intense standards of competitiveness set by their colleagues and supervisors. Of course, this pressure has been suggested by some to be one of the root causes for the mendacity and rapaciousness that pervaded the Enron culture.It also provides another example of the shallowness of image. There was a huge gulf between Enron's stated corporate values and their actions. "Rarely has the difference between sermon and conduct been so dramatic. The contrast between Enron's moral mantra and the behavior of some Enron executives is bone-chilling. Indeed, the Enron saga teaches us the limitations of corporate codes of ethics: how empty and ineffectual they can be. . . . Among Enron's stated core values were respect, integrity, communication and excellence." In reality, the collapse revealed corporate greed and misbehavior at its worst. To make matters worse, accountants whose job it is to provide the certification of rectitude of financial documents provided the tools used by executives to steal. The famous business schools should look long and hard at the methods by which they delivered morally bankrupt MBAs almost totally lacking in any moral fiber.
No one should have been surprised. It all started in the mid-eighties. Several Enron executives played fast and loose with the truth, and the result was an oil trading scandal. Ken Lay kept the executives on his staff. Talk abut a message to the employees. From then on, the only thing that mattered was getting the huge bonuses that depended on meeting certain targets. It didn't matter that the people hired to build the plants were completely inexperienced, or that Enron executives [ticked:] off citizens and governments where they were building plants. It was all about making a lot of money for themselves.
Ironically, the nickname for the corporation was the "Death Star," and jokes about the "crooked" E symbol were rampant long before the collapse. The company created an arrogant culture that refused to hear any bad news and those who dared to suggest that things were not going well were transferred or removed. One executive had filed papers noting substantial cracks in a pipeline in Panama a year before gas leaks caused an explosion that killed more than thirty people. For his trouble, he was transferred to another project.
Several of the executives went on to other jobs. For example, Tom White, then Vice-Chairman of Enron Energy Services, is now Secretary of the Army under George W. Bush. Scary thought. Enron was consistently ranked as one of the top companies and studied in business schools. What a shame no one was around to remind us the emperor was naked.
Cruver's narrative is clear and suspenseful even though we know the outcome. He takes complicated financial instruments like derivatives and explains them in such a way that even a dumb lay person (pun intended) can understand them.
