Enron indictments meant to hide economic failures
By Heather Cottin
The day after Enron's chief executive, Jeff
Skilling, did the "perp walk" for the TV cameras at his Feb. 19
federal indictment, Business Times called the event "the grand
finale of the government's assault on corporate crime."
Skilling could face an $80 million fine and 325 years in
prison. But his expensive lawyers are not worried.
For U.S. capitalism, this is far from its first brush with
widespread scandal. From the railroad barons buying up the land
for a song in the 19th century through to the Teapot Dome
scandal in the 1920s, capitalism's growth here was synonymous
with theft. The difference this time is that instead of a
corollary to rapid growth the theft is an attempt to cover up
decline.
Reuters reported Feb. 19 that lawyers "would not be
surprised if this case ended without any charges against Enron
head Ken Lay," a major contributor to George W. Bush's past
election campaigns. Most other capitalists who profited from
corporate scandals that netted billions of dollars in the past
several years face no indictments, fines or jail time.
During the heyday of the corporate scandals, "even as
investors were losing 70 percent, 90 percent, even all of their
holdings, top officials were getting immensely,
extraordinarily, obscenely wealthy." (Fortune, Sept. 2,
2002)
During the past two administrations, failing firms managed
to loot pension funds and investors of hundreds of billions of
dollars by lies, accounting deceptions, and other forms of
capitalist chicanery. Martha Stewart, who allegedly pocketed a
mere $51,000 from illegal stock tips, and a tiny handful of
unlucky managers and investors face charges or are in jail for
fraud and insider trading. Most of the big perpetrators are
free.
When frauds at Enron and WorldCom, Adelphia, Tyco, Global
Crossing, Quest, Xerox, MicroStrategy, ImClone, AOL-Time
Warner, K-Mart, Citigroup and J. P. Morgan Chase were revealed,
Washington came to the rescue of Wall Street to assure
investors this could never happen again.
Congress passed the Sarbanes-Oxley Act of 2002. But it was
just for show. One senator commented after President Bush
signed it, "Given the tough law, they're basically saying,
'We're not going to use it.'" (Washington Post Nov. 8,
2002)
Washington then took 500 FBI agents off corporate crime
investigations and deployed them in the "War on Terror."
Washington needs the public to believe the perpetrators were
bad apples in an otherwise moral and righteous self-correcting
capitalist system. And Washington is wary of alienating its
corporate cronies. "We're not going to have what I would call a
lynch-mob mentality with respect to any corporate executive,"
said Deputy Attorney General Larry Thompson, head of the
inter-agency Corporate Fraud Task Force.
The twin ploys of indicting a few managers and writing a
couple of "get tough" laws is supposed to reassure investors.
"As far as messages to the corporate community, the indictment
does the trick." (Reuters, Feb. 18)
But that's a lie. All this duplicity is intrinsic to the
capitalist system.
What did Skilling and his partners in crime former chief
accounting officer Richard Causey and chief financial officer
Andy Fastow--who's in prison already--actually do?
They sold nothing for something. They appropriated what
wasn't theirs, or what wasn't there, and sold it for billions
of bucks.
In selling worthless stock, cooking the books, disguising
losses as profits, Skilling and the other thieves not only
defrauded investors and stole the pensions, jobs and security
of their employees, they exemplified the system of
capitalism.
Karl Marx's analysis over a century ago showed that
commodities are the basis of the capitalist system. Their
production and sale, and the surplus value made from the labor
of the workers, create profits for the capitalists.
Now the world, despite globalization, is in a deep economic
crisis. The sale of commodities and services has fallen. In the
United States every corporation, financial institution, almost
every worker, every state and certainly the federal government
are in debt.
Capitalism has entered a period of massive overproduction.
Capitalists have laid off tens of millions of workers
globally--3 million in the United States in the last three
years alone.
Despite their World Trade Organization, Free Trade Area of
the Americas, General Agreement on Tariffs and Trade, despite
their global investment frenzy, despite their control over the
creation of banking and bankruptcy laws--there is nothing the
capitalists can do about saving their own system.
Globalization has only spread the stench of corporate
corruption. Major U.S. firms are embroiled in major frauds and
conspiracies and have been indicted in India, the Middle East,
Africa and Latin America. While Wash ington decries corruption
in other countries, criminal practices dominate U.S.
business.
They dress it up and call it "white collar crime." At over
$400 billion a year, U.S. corporate criminals steal 20 times
what is taken in burglaries, theft and street crime. And they
rarely go to jail. The FBI doesn't even keep track of their
crimes.
The frauds perpetrated by owners and executives at Adelphia,
WorldCom, Quest, Enron and dozens of other firms, investment
houses and banks in the past few years involved a deception
that made investors believe that a company that was losing
money was actually making profits.
The fact that this practice is widespread shows that
capitalist system is in deep trouble. It is this truth that is
obscured by the media circus over Jeff Skilling, Martha
Stewart, and the token executives whose indictments will do
nothing to save the rotting system.
Reprinted from the March 4, 2004, issue of
Workers World newspaper
This article is copyright under a Creative
Commons License.
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