Enron Scandal Texas Political Scandal essay

Download this essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from essay:

The deregulation was forced through by legislators to whom Enron paid out massive contributions..." (Levy, 2005)

The fraud was primarily comprised of "cooking the books to make it look as if the company's finances were consistently rosy, so that share prices would steadily keep rising." (Levy, 2005) More than 30 individuals have received criminal charges since 2001 connected to their dealing with Enron which incidentally "was just one of several companies revealed to have been practicing this sort of fraud..." (Levy, 2005) it is interesting that most of these companies are known to have provided hefty contributions to "politicians of every stripe, but had particularly strong links to the Republicans and to Bush." (Levy, 2005)

IV. Enron is Biggest Political Scandal in History

Robert Bryce states in the work entitled: "Pipe Dreams: Greed, Ego and the Death of Enron" that the Enron failure "was a mind-boggling event..." And that the failure of Enron "...happened so quickly and with such devastating impact that no one could have predicted it." In fact, Enron, went Chapter 11 and is stated by Bryce to have "...done it with Texas-style, in the biggest and gaudiest way possible -- with superlative aplenty." (2004) According to Bryce the Enron failure "is the biggest political scandal in American history." (2005) Bryce states:

"Teapot Dome, a scandal involving payoffs to the Secretary of the Interior Albert Fall by a couple of greedy oilmen -- was memorable, but involved very few people. The Watergate scandal was bigger and more pernicious than Teapot Dome, but it, too, involved relatively few people: Tricky Dick Nixon, a dozen or two of his henchmen, and a few inept plumbers. But Enron was different. By the time of its bankruptcy, Enron owned -- or perhaps was just renting -- politicians in the White House, Congress, state courts, state legislature and bureaucrats at every level." (Bryce, 2005)

V. Enron Scandal is Biggest Scandal to Ever Hit Wall Street

Bryce (2005) states that the Enron scandal is the biggest "...ever to his Wall Street." (2005) the Enron scandal is stated to have "ensnared every major investment bank in New York, including Merrill Lynch, Citigroup, J.P. Morgan Chase, UBS, and dozens of others." (2005) Not only did these banks lend Enron large sums of money as well as performing investment banking for Enron, but as well "their executives invested in Enron's off-the-balance-sheet partnerships. And the same bankers employed a gaggle of analysts, who, given enough investment banking work by Enron, were happy to put out 'strong buys' on the company's stock." (Bryce, 2005)

VI. Enron Scandal Biggest to Ever Hit Accounting

Bryce (2005) also states that the Enron scandal is the biggest "to ever hit accounting, the world's second oldest profession. The once-great accounting firm Arthur Andersen wasn't just in bed with Enron, the venerable firm was providing the energy company with auditing and consulting services, while sharing office space -- free shredding! -- all in exchange for a $52 million per year in fees." (2005) Finally Bryce states that the Enron collapse is "the most egregious example of executive piracy in American corporate history." (2005)

VII. The Results of the Enron Scandal

Bryce (2005) states that the bankruptcy of Enron 'has changed American investors" in that following the loss of in excess of $70 billion in equity value "American stockholders watched companies that have nothing to do with Enron -- names like General Electric, Tyco, and others -- get hammered because of questions about their accounting. The realization suddenly was that "even the bluest of blue-chip companies could disappear, or be made nearly worthless, almost overnight." (Bryce, 2005)

Summary & Conclusion

It is certain that the banking and investment landscape has changed in the United States since the Enron scandal and the huge amount of money that was lost by American stockholders, investors and the employees of Enron. These changes are of the nature that are critically needed and in fact were needed badly prior to Enron's bankruptcy. While it is unfortunate that companies with integrity in their accounting practices have fallen under fire because of Enron's dishonest, the American people have learned a harsh lesson about taking things at face value -- even when the oldest and bluest of…[continue]

Cite This Essay:

"Enron Scandal Texas Political Scandal" (2009, October 06) Retrieved October 21, 2016, from http://www.paperdue.com/essay/enron-scandal-texas-political-18861

"Enron Scandal Texas Political Scandal" 06 October 2009. Web.21 October. 2016. <http://www.paperdue.com/essay/enron-scandal-texas-political-18861>

"Enron Scandal Texas Political Scandal", 06 October 2009, Accessed.21 October. 2016, http://www.paperdue.com/essay/enron-scandal-texas-political-18861

Other Documents Pertaining To This Topic

  • Enron Dubbed as One of

    THE PEOPLE BEHIND THE RISE AND FALL OF ENRON Kenneth Lay being one of the pioneers of Enron from its establishment in 1986, had lead the way of Enron's emergence as one of the leading company in the U.S. And eventually to its collapse and declaration of bankruptcy on December 2001. Kenneth Lay held the position as the CEO and chairman of Enron from 1986 to January 23, 2002. Lay is

  • Enron Was the Seventh Largest

    Enron could engage in their derivative trading strategy with no fear of government intervention because derivative trading was specifically exempted from government regulation. Due in part to a ruling by the Commodity Futures Trading Commission's (CFTC) chairwoman, Wendy Graham, derivatives remained free of regulatory oversight. Ms. Graham, wife of Texas senator Phil Graham, made this ruling 5 weeks before resigning as chairwoman of the CFTC and joining the Enron Board

  • Enron s Organizational Behavior

    Enron Leadership Enron collapsed very quickly in November 2001, and its failure should have been a warning to serious dysfunctions in the entire corporate and financial system, but this did not happen. Its executives admitted that they had falsified its records going back for at least five years, although in reality they had been doing so since the 1980s. When the company filed Chapter 11 bankruptcy it laid off over 20,000

  • Enron Scandal

    Enron Scandal: Who was Responsible and Why? Background of Enron Scandal and Timeline of Events Key Players in Enron Scandal The Enron Scandal was the biggest accounting fraud in U.S., indeed worldwide, business history. The following paper gives a brief history of the events leading up to the scandal, a timeline for the events surrounding the uncovering of the scandal and the events following the public knowledge of the scandal. Key players in

  • Enron & Ethics Enron Ethical

    From all facts and appearances, those Enron executives gave lip service to ethics, then went on their own way, making as much profit as they could while the company teetered on collapse. One final example from Enron's "Code of Ethics" is titled "Twenty-Twenty Hindsight" which carries its own irony without delving into its points. Lay writes on page 10 that if any employees' security activities or transactions "become the subject

  • Enron Sham and Shame the

    The first set of rules required in-house lawyers to report frauds to the organization's highest authorities. The second set provided exceptions to the general rule on legal confidentiality. Both sets were heatedly discussed for decades. Similar scandals since the 70s, which gave rise to similar heated debates, included the National Student Marketing securities fraud, the OPM commercial fraud, the Lincoln Savings & Loan and Allied Savings and Loans scandal

  • Enron Was a Big Energy

    In October 2001 the tables were turned again and Ken Lay returned as chief executive officer with Jeff Skilling having resigned in August. Shortly afterwards in 2002 investigations into corporate crimes and accountancy fraud were initiated on Enron leading to sharp share prices fall and the collapse of the Enron empire. (Brief history of Enron Corporation - the biography of a corporate disaster) The activities of Enron were not restricted

Read Full Essay
Copyright 2016 . All Rights Reserved