Essay - Enron Scandal Abstract Everyone Makes Mistakes. However, it Takes a...

Enron Scandal

Abstract

Everyone makes mistakes. However, it takes a coloss*****l amount of error, over a very long period of time, on the part ***** many people, to equate to the $600 million Enron mistake that began ***** come to light in 2001. Like a loosely woven sweater, as ********** and stakeholders began to pull on *****e loose thread, the entire Enron scandal began ***** unravel right before their eyes. A web of betraying investor confidence, use of corporate funds for executive personal slush *****, and a series ***** looking the other way by ent*****ies entrusted in protecting investors against just such a debacle, led ***** down a very short road to their ultimate demise.

Enron Debacle

Introduction:

Everyone makes mistakes. However, it takes a colossal ***** of *****, over a very ***** period ***** time, on the part of many people, to equate to the $***** million Enron mistake ***** ***** to come to light in 2001. ***** a ***** woven sweater, as investigators and ***** began to pull on one loose thread, ***** entire Enron scandal began to unravel right ***** their eyes. A web ***** ***** inves*****r confidence, use of corporate funds for executive personal slush funds, and a ***** of ***** the ***** way by entities ***** in ***** investors ***** just ***** a *****, led Enron down ***** ***** short road to ***** ultimate demise.

Enron History:

The Enron debacle is a tw*****ted tale, *****ten*****s resembling more of a television mini-series, th*****n an example of Americ***** business. To understand what John Olson of Sanders Morris Harris referred to ***** a "financial ho***** ***** cards" (cited in Fowler, 2002, p. 1), it is helpful to begin at the *****ning of ***** organization's history, to see how a natural gas pipeline company expanded to the point ***** utter explosion.

It was ***** than two decades ago when Houston Natural Gas and InterNorth merged to form what would be***** the natural gas pipeline company, *****. Four years into operation, the organization exp*****ed *****ir operations and begain trading natural gas. And, it would be in 1996 ***** Jeff Skill*****g would join the ***** as Enron's President and Chief Operating Office ("Timeline: Enron," 2002). It would be Skilling who would lead the company ***** fur*****r expansion and growth, and ultimately to their destruction.

The Kaiser Aluminum and Chemical Corporation negotiations were ***** of the first indicators of *****s skill at manipulating a situation to fit his end goals. Kaiser wanted to negotiate a 5-year gas contract for ***** aluminum plant in Louisiana, *****ever, Enron did not have gas in that state, nor would other producers willingly lock in at the low rates Kaiser *****. Instead, Skill*****g guaranteed ***** low price off the Texaco priceline. If ***** prices rose, Enron would c***** the difference, but if they lowered, Enron would get the profit. Skilling's negotiation would turn into the establishment of the Gas Bank (Eichenwald, 2005, p. 43-44).

Kenneth Lay became Enron Chairman, in 2000, as Enron shares hit all-time high