Paper Summary:

The writer of this paper examines the sudden collapse of Enron. Enron's downfall forced both ordinary citizens and their political representatives to step back and take a long, hard look at precisely what had been happening behind closed doors. This paper explores the history of Enron, which quickly became one of the world's largest private generators and suppliers of power. The corporation's success was based largely on the work of Jeffrey Skilling and Ken Lay, who were experts at cultivating an upstanding public image. This paper describes how the high ranking execs at Enron frequently helped themselves to huge amounts of judiciously manipulated stocks and then sold them for a profit just before the inevitable disaster. The writer details the events that led to Enron's collapse which began in 2001, when Sharon Watkins, a company vice-president noticed something was wrong with the company's accounting system. Enron had clawed its way up the corporate ladder by engaging in what was essentially an exceedingly risky venture. By offering to guarantee future prices in the natural gas market, the corporation was taking on a potentially enormous financial burden. Enron was able to mask its losses by removing them from the company's books. This paper explores how the misconduct of Enron and other corporations such as Anderson and Worldcom, hurts more than just their employees, customers and shareholders, they also hurt the global economy.

From the Paper:

"Enron did all it could to cultivate an upstanding public image. In 1997, the energy supplier was one of a small number of companies each of which donated more than one million dollars to the Nature Conservancy. In regard to the Kyoto Accords that were being negotiated at this time, Enron planned to benefit in two ways. By supporting the Accords, Enron was placing itself on the good side of the environmentalist public, while at the same time endorsing a document that severely limited the use of coal in energy production. Since Enron dealt only in natural gas, coal would have been competition. Though a praiseworthy idea at the time, the company's willingness to bend regulations to its own purposes might have given cause for alarm. Ken Lay and Jeff Skilling were not only innovative, but they were also increasingly creative when it came to figuring out ways to make money, and to expand Enron's horizons."

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