It’s been nearly five years since Enron collapsed, nearly three years since the publication of the definitive Enron book, The smartest guys in the room, and a year since the eponymous documentary hit theaters – yet Enron is still very much with us. Consider the massive media attention accorded to two events in mid-July: the death of disgraced (and convicted) Enron CEO Kenneth Lay and the extradition of the so-called NatWest three, a trio of British bankers who are now facing trial in Houston.
Generally, scandals go through a pretty rapid cycle. In a matter of months, the event follows an arc going from unfolding drama to popular culture phenomenon to yesterday’s news. The media wrings what value it can from the scandal – Enron, WorldCom, Refco, options backdating – and then moves on. After all, ‘closure’ is a staple of American pop psychology. And for all those involved in Enron – investors and executives, industry partners and analysts, politicians and regulators, board members and bankers – closure of that miserable chapter couldn’t come fast enough.
But Enron is the scandal that refuses to end. It was so immense, so corrupting and so deeply entangling that it has taken several years to sort out the legal implications, not to mention the psychological, cultural and political ones. Lay may have disappeared from the news in the fall of 2001, but his death came only weeks after his conviction – a process drawn out because he and co-defendant Jeffrey Skilling spent large sums of their ill-gotten gains on expensive defense lawyers. More broadly, there’s a degree to which all of us – not just those who were caught up in Enron’s many evil tentacles – live in a world of Enron’s creation.
Like survivors of a natural disaster or a war, capitalist systems and institutions are still wandering around in something akin to a state of shock. Sure, the markets have largely recovered, but they labor under Enron-imposed handicaps. It’s common to hear Wall Streeters fret about New York losing its status as a global financial capital due to the regulations imposed by the Sarbanes-Oxley Act, whose passage was a direct response to Enron. Now, bespoke-clad bankers in the City of London fear the toxic Enron fallout. The UK government’s failure to stop the extradition of David Bermingham, Giles Darby and Gary Mulgrew, who have been charged with engaging in corrupt dealings with former Enron CFO Andrew Fastow, means ‘the UK’s role as a leading financial capital market could be jeopardized,’ according to Richard Lambert, director general of UK industry body the CBI.
Of course, the bankers haven’t been treated like common criminals. They were released on bond, and while the judge ordered them not to leave the US, he spared them the cruel and unusual punishment of being forced to spend July and August in steamy Houston. The trial is slated to begin this month.
Daniel Gross writes the ‘Moneybox’ column for Slate.
