¶ … Enron Debacle When the mighty giant, Enron, fell, it fell hard and resulted in the largest bankruptcy in American history. Worldwide focus then fell upon all who might have a possible answer for this event. Intense focus fell first upon Enron executives, and then, as the event evolved into what appears to be one of the most massive cases of corporate corruption ever known, others were brought into the spotlight.

According to a statement published on the Andersen website, the primary corporate auditors of Enron, the organization was founded in 1913, when "Arthur Andersen recruited the brightest students into his classes. Then, he turned them into 'thoroughly trained accountants' who were able to go beyond the obvious in their work by using unique methodologies to improve financial performance." It is, perhaps, those "unique methodologies" that took an unexpected turn at some point in the company's long and previously respected history, and then emerged as something uniquely ungoverned, unprincipled, and unconscionable. After the Securities and Exchange Commission began its in-depth investigation of Enron, focus then also fell upon Andersen.

While the full scope of the fraud has yet to be discovered, House Energy and Commerce Chairman W.J. "Billy" Tauzin (R-La.), summed the situation up in a simply worded statement given to the Washington Post. "Not only were there corrupt practices, not only was there a hiding of the fact that debt was being put off the balance sheets and profits were reported that didn't exist, but we found more than that. I think we're finding what may clearly be securities fraud, attempts - not to hedge or put debt out of the company,...

"We will implode in a wave of accounting scandals," she warned, unless the company changed its ways (Associated Press).
In spite of his statement denying knowledge of the questionable practices, records that include minutes indicate Lay was present at board meetings where some of the partnerships were approved. At one meeting, a waiver of Enron's conflict of interest policy was discussed in order to allow former chief financial officer Andrew Fastow to run the partnerships.

As the partnerships began attracting the attention of various regulators, Lay defended them, and at roughly the same time that he received the "implosion" warning from Watkins, Lay gave the following statement to Business Week: "There are no accounting issues, no trading issues, no reserve issues, no previously unknown problem issues. The company is probably in the strongest and best shape that it has ever been in (Guardian Unlimited)." On August 24, 2001, however, Business Week asked the following question of former CEO Jeffrey K. Skilling, who abruptly resigned from Enron without reason after only six months as CEO: "What about reports that there was some unhappiness on your part about Chairman Ken Lay being too involved in the business again?" It remains a clear possibility, therefore, that Kenneth…