Enron's Enablers: The Finance Firms That 'Drove the Getaway Car'

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/08/AR2007050801582.html?referrer=email&referrer=email&referrer=email

Enron's Enablers
The Finance Firms That 'Drove the Getaway Car'

By Harold Meyerson
Wednesday, May 9, 2007; A17



"We recognize," federal appellate Judge Jerry Smith wrote in a March opinion tossing out a lawsuit by Enron shareholders against the banks that helped the company cook its books, "that our ruling on legal merit may not coincide, particularly in the minds of aggrieved former Enron shareholders who have lost billions of dollars in a fraud they allege was aided and abetted by the defendants at bar, with notions of justice and fair play."

Nothing like a judicial edict that acknowledges it violates common decency.

Smith and Judge Grady Jolly had just decreed that banks that had aided Enron in concealing its liabilities and inflating its assets were not themselves liable for these acts because it was Enron, not they, that had made the misleading statements....

And thus a $40 billion lawsuit filed on behalf of roughly 50,000 Enron shareholders, many of whose life savings were destroyed by the company's massive fraud, in which it was abetted by numerous pillars of American finance, was dismissed, just four weeks before a trial was to begin.

Citigroup, JP Morgan Chase, Bank of America and others had already settled out of court, and the $7.3 billion from that settlement will be distributed to the plaintiffs later this year. But Merrill Lynch, Barclays and Credit Suisse First Boston were going to trial until the obliging federal judges immunized them.

The matter does not stop there, fortunately. The plaintiffs' attorney, legendary trial lawyer and Wall Street nightmare William Lerach, has appealed the ruling to the Supreme Court, which is likely to hear this or a similar case (or both) in the fall. Of particular significance is whether the Securities and Exchange Commission will ask the Justice Department to file an amicus brief for the plaintiffs. SEC Rule 10b-5 makes it unlawful for any person, "directly or indirectly," "to employ any device, scheme or artifice to defraud" investors. Intervening on shareholders' behalf in this kind of proceeding would seem implicit in the SEC's raison d'etre, but under the leadership of Bush appointee Christopher Cox, the commission has appeared eager to foster on Wall Street the very anything-goes ethic that compelled New Deal leaders to create the SEC in the first place.


meyersonh@washpost.com

the judges:

Smith, Jerry Edwin

Born 1946 in Del Rio, TX

Federal Judicial Service:
Judge, U. S. Court of Appeals for the Fifth Circuit
Nominated by Ronald Reagan on June 2, 1987, to a new seat created by 98 Stat. 333; Confirmed by the Senate on December 19, 1987, and received commission on December 21, 1987.

Education:
Yale University, B.A., 1969

Yale Law School, J.D., 1972

Who was at Yale during this time?


Jolly, E. Grady

Born 1937 in Louisville, MS

Federal Judicial Service:
Judge, U. S. Court of Appeals for the Fifth Circuit
Nominated by Ronald Reagan on July 1, 1982, to a seat vacated by James Plemon Coleman; Confirmed by the Senate on July 27, 1982, and received commission on July 30, 1982.

Education:
University of Mississippi, B.A., 1959

University of Mississippi Law School, LL.B., 1962



where are they now - the Board of Directors, those helping to 'direct' the show?
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of course, former Harvard Mgmt Director (at time of Harvard's investing in Bu$h's Harken Energy) Pug Winokur (Capricorn Holdings) is profitting off of DynCorp mercenary soldiering in Columbia, S.A., and who knows where else ... Ken is 'resting' somewhere (Paraguay?) ... Wendy Gramm, former chair of the US Commodity Futures Trading Commission under Poppy Bu$h, is likely one who brought helpful 'insight' into the Board room. She was administrator for Information and Regulatory Affairs at the Office of Management and Budget from 1985-1988, the Executive Director of the Presidential Task Force on Regulatory Relief and Director of the Federal Trade Commission’s Bureau of Economics. Wife of former Sen. Phil Gramm, she's now founder and chairman of the Regulatory Studies Program at George Mason University's Mercatus Center, a free-market think tank based in Washington D.C. In her role at the Mercatus Center, Gramm generally calls for deregulation of the energy industry (wiki).

Enron's board of directors
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Full list of Enron's key decision makers

Friday February 1, 2002
Guardian Unlimited

Robert Belfer (1, 3)
New York. Chairman, Belco Oil & Gas Corporation.

Norman Blake (3, 4)
Colorado Springs, Colorado. Chairman, president and CEO, Comdisco. Former CEO and secretary general, US Olympic committee.

Ronnie Chan (2, 3)
Hong Kong. Chairman, Hang Lung group.

John Duncan (1*, 4)
Houston, Texas. Former chairman, executive committee of Gulf & Western Industries.

Wendy Gramm (2, 5)
Washington. Director, regulatory studies programme of the Mercatus centre at George Mason University. Former chairwoman, US commodity futures trading commission.

Ken Harrison
Portland, Oregon. Former chairman and CEO, Portland General Electric.

Robert Jaedicke (2*, 4)
Stanford, California. Professor of accounting emeritus and former dean, graduate school of business, Stanford University.

Kenneth Lay (1)
Houston, Texas. Chairman, Enron. Resigned January 24 2002.

Charles Lemaistre(1, 4*)
San Antonio, Texas. President (emeritus), University of Texas. Managing director, Anderson Cancer Center.

John Mendelsohn (2, 5)
Houston, Texas. President, University of Texas. Anderson Cancer Center.

Jerome Meyer (3, 5)
Wilsonville, Oregon. Chairman, Tektronix.

Paulo Ferraz Pereira (2, 3)
Rio de Janeiro, Brazil. Executive vice president, Group Bozano. Former president and chief operating officer, Meridional Financial. Former president and CEO, State Bank of Rio de Janeiro, Brazil.

Frank Savage (3, 4)
Stamford, Connecticut. Chairman, Alliance Capital Management International (a division of Alliance Capital Management).

Jeffrey Skilling (1)
Houston, Texas. President and CEO, Enron. Resigned August 2001.

John Urquhart (3)
Fairfield, Connecticut. Senior adviser to the chairman, Enron. President, John Urquhart Associates. Former senior vice president, Industrial and Power Systems, General Electric.

John Wakeham (2, 5*)
London, England. Former UK secretary of state for energy and member of the House of Lords.

Herbert Winokur (1, 3*)
Greenwich, Connecticut. President, Winokur Holdings. Former senior executive vice president, Penn Central Corporation.

(1) Executive Committee
(2) Audit Committee
(3) Finance Committee
(4) Compensation Committee
(5) Nominating Committee
* Denotes Chairman

http://www.guardian.co.uk/enron/story/0,,643429,00.html