Ken_lay.jpgThe Smartest Dumbass in the Room

Kenneth Lay died yesterday. Unfortunately, he didn't take a note from Hollywood publicists who recommend their clients tragic news take place on holidays when even the garbage-sniffing paparazzi take the day off.

Kenneth, of course, had nothing to do with the potato chip empire (sparing you a reaction from Mr. Frito). He has everything to do with Enron, the energy trading outfit that was once one of the biggest fliers on NASDAQ only to crash in scandal.

Given the years it has taken to convict Lay and the extra months it would have taken to finally hear how long he'd be blasting tennis balls behing big fences and delay that lucrative career of chi-chi social parties and appearances as a rubber-stamping member of a Board of Directors near you, there are undoubtedly many who have a different interpretation of the "P" part of "R.I.P." - not limited to shareholders, employees, corporate pension plan recipients, you name it.

I'm definitely not going to sit here and defend Ken Lay. However, in a way, he was right - the fall of Enron had less to with Lay's own dubious hubris and knack for repaying ill-gotten corporate loans with even more ill-gotten stock or the completely bogus accounting practices that made chicken doo-doo look like chicken salad. It had everything to do with finally being stupid enough to be caught. If the investing public thinks everything today will be clean and neat because Ken Lay is dead, Jeffrey Skilling is about to go to jail or a couple of streaks were taken off Martha Stewart just because she's a tough woman, they are sadly mistaken.

Not much has changed since the Enron collapse. Yes, authorities pick the odd bogeyman or two and spend millions of dollars getting insignificant sentences at Camp Cupcake. But it's all misguided. And it certainly won't help recoup the millions upon millions of dollars in raped savings and pension nest eggs that us common folk get saddled with (especially after the lawyers and bankruptcy trustees take their pounds of flesh.)

Killing corporate corruption - a black eye to the concept of capitalism that we should all embrace - requires far more than symbolic witch hunts. I don't care if it's Enron, Global Crossing, Nortel Networks......true accountability requires the following plan of attack:

1) A major stock market slaughter somewhere in the middle of what investors remember 1975 and 1929 to be. Quite simply, the investing public is not nearly mad enough to root out the problem. Most corporate accounting statements are not only unreadable but are practically not read to begin with. Since joe shareholder wants nothing to do with that (the recent rise of even more secretive monsters like hedge funds and private equity investment outfits should provide proof), they have to deal with that whom they detrimentally rely on to interpret for them. Which leads to....

2) Investment bankers. Investment dealers. Corporate bankers. Underwriters. Investment Advisors. No more of this "self-regulatory" stuff where they police themselves on funds raised by fining all the fish that can't afford to compete with the big cheeses that dominate these outfits. Put them all under an enforcement body with actual teeth. And no mere fines, license revocations, and/or a few months in a minimum security hotel suite. Treat them on the same level as rapists and murderers. Heck, give the worst offenders the electric chair. While the Ken Lays get the sybolic publicity, a lot of these dirtbags continue to function collecting (?) millions of dollars a year completely unscathed. If some upper level exec in a public company knew that filtering a million bucks here and there would face the risk of six hours of electroshock treatment to his testicles and 15 years with the general population at San Quentin if caught by any of the folks above who finally exerted the "due diligence" that they have been trained to perform, do you think he'd do it? Actually, that's an interesting punishement. Guys in the finance business consider their genitalia to be more sacred than the heavens above, family, and country combined.

And, of course, how can leave out....

3) Accountants and "legal counsel". Just shoot 'em for any degree of aiding and abetting.

Now I realize these kinds of measures are very harsh and have damaging side effects like Michael Moore and Oliver Stone having nothing left to whine about, but that's just the chance we have to take....

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