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ENRON- A Study of FAILURES

Who, How, Why!


Arthur Gudikunst, Ph.D. Revised: April, 2003
Professor of Finance
Finance Department
r!ant "olle#e
Introduction:
$he sa#a of the %&R'& "orporation has (een unfoldin# in the media for )ell over a
!ear. *n the span of onl! three !ears, %&R'& has #one from pu(lic and professional
acclaim of the compan! and its senior e+ecutives to scorn, infam! and (ankruptc!. *ts
pu(lic auditin# firm, Arthur Andersen, has (asicall! (een destro!ed, as )ell as pu(licl!
dis#raced. $ens of thousands of emplo!ees and investors have (een emotionall! and
financiall! affected. ,a-or financial services firms in (ankin#, securities (rokera#e and
insurance have (een, and ma! !et (e, dra)n into the le#al (attles re#ardin# )ho is to
(lame for the %&R'& failure.
Overview of ENRON:
$he follo)in# timeline for %&R'& is presented to set the ma-or milestones for the
compan!:
.ul! /0123 4ouston &atural Gas mer#es )ith *nter&orth to form %&R'&, as an interstate
natural #as pipeline compan!. 5enneth 6a! is "%'.
/0103 %&R'& starts tradin# natural #as commodities and commodit! derivative financial
contracts.
/0073 %&R'& (e#ins tradin# electricit! as a commodit! and related financial derivative
contracts. .effre! 8killin# is e+ecutive in char#e of this ne) (usiness venture.
&ov. /0003 %nron'nline is launched as a )e( site for the #lo(al tradin# of ener#!
commodities and derivative contracts. .effre! 8killin# leads this continued transformation
from a natural #as pipeline compan! to a #lo(al marketer and trader of oil, #as and
electric ener#!. 8tock price trades at 972 per share.
20003 8tock price trades at hi#h durin# !ear of 90/ per share.
Fe(. 200/3 .effre! 8killin# takes position as "%', and 5en 6a! remains as "hairman of
the oard. 8tock price is tradin# at hi#h ran#e of 917 per share.
Au#. 200/3 .effre! 8killin# resi#ns as "%', and 5en 6a! returns to position as "%' and
"hairman. %&R'& vice president, 8herron :atkins, )rites anon!mous letter to 5en 6a!
a(out severe pro(lems )ith partnerships kno)n as 6., and Raptor, the accountin# for
those partnerships, the role of the %&R'& "F' in the partnerships, and the possi(le
adverse effect of these partnerships and their accountin# if the information )ere ever
revealed to the investment markets.
.an.3Au#. 200/3 6a! and 8killin# sell 97/ million of %&R'& stock. 'ther corporate
insiders sell 9;/ million of stock. %mplo!ees are restricted from sellin# stock from
70/<k= retirement accounts unless retirin# or leavin# emplo!ment.
8ep. 200/3 8tock price trades around 921 per share, after 0>// terrorist attacks.
'ct. 200/3 %&R'& reports a 9?/1 million loss for the third @uarter, and restates past
financial statements that results in 9/.2 (illion )ritedo)n of %&R'&As stockholder
e@uit!. 6oss and )ritedo)ns result from 8pecial Purpose %ntities <partnerships= created
under the direction of "hief Financial 'fficer <"F'= Andre) Fasto). $he 8ecurities and
%+chan#e "ommission <8%"=, re@uests further e+planation and information on the
reported losses and financial restatements. "F' Andre) Fasto) is relieved of his
position. %&R'&As pro(lems lar#el! related to Ba##ressiveB accountin# related to
reportin# of inde(tedness on (alance sheet, reportin# of profits from asset sales and
reportin# of earnin#s and cashflo) from on3#oin# operations.
&ov. 200/3 8%" up#rades in@uir! into %&R'& to a Bformal investi#ationB. %&R'&
states that its profits over last five !ears have (een BoverstatedB (! 921? million. Pu(lic
auditin# firm, Arthur Andersen, receives re@uest from 8%" for its records on the %&R'&
audits. %&R'& attempts to raise cash (! dela!in# loan repa!ments and seekin# ne)
sources of short term capital. ,er#er attempt )ith D!ne#! "orp. is cancelled.
Dec. 200/3 %&R'& files for "hapter // (ankruptc! protection. "%' of Arthur Andersen
tells "on#ress that %&R'& mi#ht have violated securities la)s.
.an. 20023 .ustice Department (e#ins criminal investi#ation of %&R'&As failure. Reports
are received a(out document destruction at %&R'& and Arthur Andersen after 8%"
investi#ation )as announced. %&R'& stock trades at prices (et)een 90.20 and 90.20 per
share.
Fe(.3Au#. 20023 'n#oin# investi#ations (! 8%", C.8. .ustice Department, C.8. 4ouse of
Representatives, C.8. 8enate, et al. "ompanies such as ,errill 6!nch, "iticorp and ..P.
,or#an "hase are called to testif! a(out their dealin#s )ith %&R'&. Role of %&R'& in
the "alifornia ener#! crisis is investi#ated. %&R'& emplo!ees sustain massive losses in
70/<k= retirement accounts and emplo!ee la!offs continue. Federal #overnment evaluates
need for ne) la)s related to emplo!ee pension accounts, re#ulation and oversi#ht of
pu(lic auditin# firms, and corporate fraud and #overnance issues.
ENRON Failure: Who's to Blame?
At first #lance, it )ould appear that %&R'&As senior e+ecutives, nota(l! 6a!, 8killin#
and Fasto), are the primar! suspects. 4o)ever, the! claim that the! )ere operatin# )ith
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the consent and approval of the %&R'& oard of Directors. $he Auditin# "ommittee of
the oard of Directors continued to rel! on its pu(lic auditin# firm, Arthur Andersen,
)ho continued to )rite favora(le opinion letters that %&R'&As accountin# )as Bade@uate
to provide reasona(le assurance as to the relia(ilit! of financial statementsB for the !ears
/001, /000 and 2000. Arthur Andersen pu(lic auditors )ere usin# the accountin# s!stem
that )as developed (! %&R'& in con-unction )ith the advice and counsel of the
consultin# arm of Arthur Andersen. $he accountin# s!stem )as developed also to
conform to Generall! Accepted Accountin# Principles <GAAP=, as interpreted (! -oint
a#reement of Arthur Anderson auditors and the consultin# unit, %&R'& accountin#
personnel and, to some e+tent, (! the le#al firms passin# favora(le opinions on
accountin# and ta+ treatments of the %&R'& related partnerships <8P%As=.
$hrou#hout %&R'&As histor!, up to the 'cto(er3&ovem(er, 200/, restatement of the
income statement and (alance sheet due to the 6., and Raptor partnerships, all of the
pla!ers indicated a(ove )ere #ivin# each other confirmation and approval for the
accountin# and (usiness practices that suddenl! )ere (ein# undone in 'cto(er. *n the
previous !ear, %&R'& paid over 920 million to Arthur Andersen for their consultin# and
auditin# services. $he la) firms, providin# services and opinions to %&R'&, received
a(out 920 million in fees. As a result, the various %&R'& pla!ers )ere all confident that
the! )ere operatin# in a s!stem )here each )as (ein# covered (! the actions and
confirmations of others in the s!stem. &o(od! did an!thin# )ron#, (ecause the actions
)ere all (lessed (! the other pla!ers in the s!stemD
ut )ho else )as involved in %&R'& de(acleE 6ets us not for#et the various mem(ers
of the financial communit!, i.e., the (anks, credit ratin# a#encies and the securities
(rokera#e firms. Recent hearin#s in the C.8. 8enate e+plored the activities of ..P. ,or#an
"hase and "iti(ank <the (ankin# side of "iti#roup= )ith %&R'&. Apparentl! (oth of
these (anks )ere involved in )hat are called Bprepa!B ener#! transactions. %mplo!ees of
the (anks )ere dealin# )ith %&R'& and %&R'& partnerships to provide cash to
%&R'& for its da!3to3da! financial operations, in )a!s that could (e reported as
Boperatin# activitiesB versus Bde(t financin#B activities. $he (anks )ere findin# )a!s,
supported (! le#al and accountin# opinions, that ena(led %&R'& to en#a#e in practices
that had the effect of hidin# its de(t o(li#ations off3the3(alance sheet, )hile appearin# to
report positive profits and flo) of funds from operations.
,errill 6!nch dealt )ith an %&R'& partnership <the &i#erian ar#e Pro-ect= in a
transaction that allo)ed %&R'& to report a 9/2 million addition to profits -ust (efore the
end of fiscal !ear /000. ,errill 6!nch claimed that the transaction )as a 9; million
purchase of e@uit!, )ith attendant e@uit! risks, (ut even ,errillAs o)n compan!
ne)sletter and e+ecutive e3mails )ere indiscriminant in referrin# to the deal as Be@uit!B
in some documents, and a BloanB in other documents. *n essence, ,errillAs Be@uit! B
investment )as #uaranteed to (e repaid in ? months at a stated /2 F rate of return, in
addition to %&R'& pa!in# a 9222,000 fee )hen the documents )ere si#ned, and
a#reein# to compensate ,errill for all its e+penses of dra)in# up the le#al papers for the
transaction. <As a professor of finance and investments, this BdealB sounds a lot to me like
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a #uaranteed BloanB at a fi+ed rate of interest, and not a real Be@uit!B position )ith price
risk to the investor.=
ut )here )ere the various credit a#encies that )ere supposed to provide independent
advice a(out %&R'&As financial a(ilit! to repa! its inde(tednessE ,ood!As and 8tandard
and PoorAs credit ratin#s indicated that %&R'& )as an Binvestment #radeB credit risk
until )ell into the !ear 200/, althou#h the ratin# )as softenin#. $he massive restatement
of financial statements in 'cto(er, 200/, and further insi#hts into the Boff (alance sheetB
financin# methods of %&R'& led to ratin#s do)n#rades to B-unkB or hi#h risk status of
%&R'& as a creditor. 4o)ever, even the credit ratin# a#encies, )ith their supposed
accountin# and anal!tical e+pertise, failed to full! understand the condition of %&R'&
and to #ive earl! )arnin# of the potential failure to the investin# pu(lic and financial
institutions.
:here )ere the #overnmentAs re#ulator! a#enciesE $he 8ecurities and %+chan#e
"ommission, our federal #overnment oversi#ht of pu(licl! traded companies and the
securities markets, )ere apparentl! cau#ht flat3footed )ith the %&R'& 'cto(er, 200/,
revelations. $he 8tate of "alifornia dere#ulated electric ener#! )ith a plan that
esta(lished the rules for ener#! tradin# and pricin#, (ut the rules )ere apparentl! so
comple+ that there )as an incentive for ener#! producers and tradin# companies to
B#ame the s!stemB in order to make profits (! findin# loopholes in the s!stem. $he
"alifornia ener#! dere#ulation also had some interestin# characteristics, such as, the
ener#! prices to consumers )ere fi+ed in price, (ut the firms transmittin# ener#! to
consumers )ould have to pa! an ener#! price )hich )as dere#ulated and ad-usted to
prevailin# market conditions. "ould the politicians have also (een un)ittin# partners in
the %&R'& failureE
And lets not fail to identif! the role of %&R'& rank3and3file emplo!ees and the #eneral
investin# pu(lic. %&R'& emplo!ees )ere seein# the da!3to3da! compan! operations up
close and personal. $he accountin# department had hundreds of professionall! trained
accountants )orkin# on the reportin# of compan! transactions. ,an! of the accountants
)ere also prior emplo!ees of the auditin# firm, Arthur Andersen, trained to look at the
transactions )ith an BindependentB auditorAs perspective. Finall!, one emplo!ee, 8herron
:atkins, did attempt to (lo) the )histle on suspected accountin# pro(lems, (ut onl! in
an anon!mous communication to the "%' of %&R'&. And )hat )as drivin# the
e+ecutives of %&R'& to do the thin#s that are no) linked to the failure of the compan!E
$he o(vious ans)er )as a desire to satisf! the profit and stock price e+pectations of the
investin# pu(lic, in an effort to fulfill the corporate o(-ective, as stated in the financial
mana#ement te+ts, to Bma+imiGe the value of the firm to the shareholdersB. *n the /000As,
investors in e@uit! securities (ecame enamored )ith the e+pectation of 22330F annual
rates of returns, and re)arded companies )ith fast #ro)in# earnin#s )ith ver! rich stock
prices, (ut also severel! punished compan! stocks )hich failed to meet the B:all
8treetAsB e+pected ne+t period earnin#s num(ers. "an !ou sa! investor B#reedBE As a
result, %&R'& e+ecutives and emplo!ees )ere cau#ht up in the desire to report ever
increasin# earnin#s in order to keep stock prices risin#, and to protect their -o(s and
)ealth in their retirement plans.
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*n summar!, )ho caused the %&R'& failureE Ans)er: a lot of individual and
institutional pla!ersD :hile it ma! (e comfortin# to -ust fi+ (lame on a fe) Brotten
applesB in the compan!, there are a lot more cooks )ho contri(uted to the terri(le ste)
served (! %&R'&. :e )ill see later )ho is Ble#all!B to (lame, once the le#al process
)orks its )a! throu#h the court s!stem.
ENRON Failure: How did it happen?
$he precipitous pu(lic event that reall! led to the %&R'& failure )as most likel! the
announcement of the financial and profit restatements in 'cto(er, 200/. ut this )as -ust
the Btip of the ice(er#B. $he real e+planation lies in the operations and activities of
%&R'& for man! !ears leadin# up to 'cto(er, 200/. Pivotal to this )as the nature of the
chan#e in %&R'&As (usiness activities, from that of a producer and transporter of ener#!,
to a #lo(al marketer and trader of ener#!, )ith production and tradin# of ener#!, ener#!
financial derivatives products, and telecommunications s!stems and other derivative
products tradin#. %&R'& )as even developin# ne) financial products on )eather and
corporate credit enhancement, i.e., financial contracts that )ould make pa!ments (ased
on outcomes of )eather and chan#es in the credit )orthiness of (usinesses. 4o)ever, the
issue of accountin# and auditin# for these ne) activities, and the increasin# use of off3
(alance3sheet partnerships and financin# activities are intricatel! ent)ined )ith the issue
of ho) the failure occurred. And finall!, the corporate, economic and political
environment impact should (e included as contri(utin# factors.
*t is likel! that (ooks and learned tomes )ill (e )ritten on this topic for !ears to come, so
* )ill onl! raise the issues * see as ke! to ho) %&R'& descended so @uickl! into
(ankruptc!.
$he (irth of %&R'& in /012 )as as a compan! that transmitted natural #as to customers
throu#h its ph!sical pipeline s!stem. *t (uilt pipelines )ith lon# ph!sical lifetimes, and
used de(t capital to raise mone! for the construction of the facilities. Government
re#ulation, at the state and federal level, of ener#! companies and prices )as ver!
comprehensive. ut there )as a trend in #overnment and economic polic! to dere#ulate
the industr! and let market forces prevail, )hich )ould also chan#e the risk and re)ard
characteristics of the companies in this industr!. $he move to)ard dere#ulation also
opened up ne) possi(ilities for compan! activities and products. %&R'& em(arked on
the development of financial products and commodities tradin# platforms <%nron'nline=
that moved the compan! to)ard (ecomin# a financial services and information
technolo#! (ased (usiness enterprise. Producin# ener#! and transportin# it to the end
user )as the (orin#, old line of (usiness, )ith limited #ro)th potential and investor
appeal. %&R'&As ne) focus on (ecomin# a #lo(al marketer and trader of ener#! and
other financial products )as the ne) )ave that )ould offer prospects of rapidl! #ro)in#
earnin#s and stock prices for the shareholders.
ut, the ne) operational environment involved the need to finance development of
entirel! ne) (usiness activities, and chan#ed the characteristics of funds flo)in# into and
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out of the compan!. Risks to %&R'& from this ne) corporate strate#! )ould include
varia(ilit! of funds needed to finance the ne) activities, the varia(ilit! of economic
profits caused (! ne) market factors, and comple+it! of implementin# accountin#
s!stems to handle the ne) products>(usinesses. 8o %&R'& needed ne) capital sources
)ith )hich to invest in its ne) corporate direction. $his )ould chan#e in the future the
a(ilit! of the compan! to meet its financial o(li#ations to those providin# the ne) capital.
anks and (ondholders )ould (e providin# loans )ith interest and principal repa!ment
o(li#ations fi+ed (! le#al contract, )ith )ell3defined risks and penalties if repa!ment
)as not made. %@uit! investors (u!in# ne)l! issued shares of %&R'& stock )ere
makin# decisions (ased on future e+pected profits and risks @uite different from that of
an ener#! production and transportation compan!. Future returns to purchasers of these
ne) %&R'& shares )ould (e dependent on the success of the ne) corporate strate#ic
investments.
:ith this (ack#round, 6a! and 8killin#, )ith the advice and consent of the mem(ers of
the oard of Directors <elected, in theor!, (! and for the interests of the stockholders=
proceeded to implement the ne) corporate strate#!. A ne) emplo!ee, Fasto), )as
(rou#ht to the firm from the (ankin# industr! and rose to (ecome the "hief Financial
'fficer. $o#ether, 6a!, 8killin# and Fasto) had the responsi(ilit! to conduct the
financin#, accountin# and operatin# activities of the compan! as it transformed itself in
the corporate future. $he pressure on this mana#ement team )as to (rin# a(out the
transformation of the compan!, to produce #ro)in# profits from old and ne) operations,
and to #ro) the value of the firm, as indicated (! the market price of its common stock.
$he sta#e )as set. %&R'&As (usiness transformation )as firml! set in place in the
middle and late /000As. 4o)ever, ne) markets and ne) products (rin# ne) risks and
ne) competitors. Forecasts of ho) much ne) financin# is needed to fund the ne)
activities ma! prove to (e too lo). ,ore ne) capital must (e raised from e+ternal capital
sources. 6enders )ant assurance that loans can and )ill (e repaid, determined partl! (!
the credit a#enc! ratin#s on the compan!, )hich are (ased on the compan!As reported
financial statements )hich are #iven the seal of approval (! the pu(lic auditors. *nvestors
purchasin# ne) shares of %&R'& stock )ill onl! (e re)arded if the stock price
continues to rise, (ut that lar#el! depends on the compan! continuin# to produce ever
hi#her reported after ta+ accountin# profits.
8o realit! sets in. $he compan! discovers that the ne) investments are not as profita(le
as forecasted or desired. $he financial officer is responsi(le for raisin# continuousl!
increasin# amounts of ne) capital to fund the #ro)in# investments re@uired to fulfill the
ne) corporate strate#!. :all 8treet securities anal!sts e+pect to see #ro)in# assets and
#ro)in# corporate revenues (ein# reflected in the after ta+ reported profits and earnin#s
per share <%P8=. $he mana#ement team must deliver ne) capital to meet needs, must
continue to pa! and meet its past loan repa!ments, and must deliver the (ottom line
income num(ers on the profit statement. 4o) do !ou accomplish this )hen the
underl!in# economics of the (usiness is short of e+pectationsE 'ne ans)er is to ad-ust
the corporate operations to reflect the chan#ed economic environment <potentiall!
disappointin# the shareholders of the compan! and havin# the senior mana#ement team
?
replaced (! the oard of Directors=. $he other ans)er is to find )a!s to raise the ne)
capital )ithout it appearin# adversel! on the firmAs financial statements, and to find
accountin# methodolo#ies that )ill allo) stated profit reports to investors to (e inflated
(e!ond the true level of )hat )ould (e called BeconomicB profits for the firm. $he
information and le#al accusations re#ardin# %&R'& seem to indicate that mana#ement
took the latter course of action.
$he results of the 6a!38killin#3Fasto) leadership decisions em(arked %&R'& on a path
of usin# availa(le accountin# devices to (oth understate the amount of (orro)ed capital
actuall! (ein# used (! the compan!, and to BmanufactureB hi#her after ta+ reported
profits and %P8 to shareholders. $he issue of )hether these )ere le#al or ille#al actions
a)aits the outcome of future court trials, (ut the fact that %&R'& is no) in the le#al
condition of "hapter // (ankruptc!, )ith the massive losses in stock value and
uncertaint! a(out lenders (ein# repaid, is the result of the course of action set in place (!
%&R'&As e+ecutive officers < )ho )ere aided and a(etted to some e+tent (! mem(ers of
the oard of Directors, Arthur Andersen and various outside la) firms=.
$he stor! of 4': this occurred is ver! comple+. * )ill attempt to e+plain several of the
techni@ues used (! %&R'& to under3report the de(t re@uired to keep the compan!
operations runnin# and to overstate the profits of the firm. oth #oals )ere achieved )ith
the creation of 8pecial Purpose %ntities <8P%As or partnerships=. A compan! can enter into
a partnership )ith outside investors and lenders, and not have to consolidate that entit!
into the compan!As financial statements reported to the investin# pu(lic. 8o, %&R'&
esta(lishes a partnership )ith outside e@uit! investors )ho (u! as little as 3 percent of
the partnershipAs total capital, )ith %&R'& investin# the rest of the capital. &e+t, the
partnership (u!s assets from %&R'&, usin# the e@uit! capital from the partners and
loans from a financial institution or (ank.
As a simplified illustration, assume that %&R'& sells electric #eneratin# e@uipment to a
8P% for a price of 920 million. anks lend the 8P% 972 million for the purchase )ith a
fi+ed maturit! and interest rate. %&R'& invests 90.2 million in e@uit! of the 8P% and
sells shares for 97.2 million <over 3 percent of total capital= to outside investors. ecause
the (ank loan is not directl! to %&R'&, (ut to the 8P%, it does not #et reported as a de(t
o(li#ation on the (alance sheet. Further, if the assetHs (ook value on %&R'&Hs (alance
sheet for this e@uipment )as 921 million at the time of the sale to the 8P%, then %&R'&
no) can report in this fiscal !ear a profit on the sale of 9203921I922 million of profits.
%&R'&Hs cash receipt from the 8P% is 920 million minus its e@uit! investment in the
8P% e@uit! <970.2 million net ne) cash to %&R'&=. *f the 8P% successfull! uses the
asset to #enerate future cash inflo)s to repa! the loan to the (ank and have remainin#
profits for the 8P% partners, then %&R'& )ill (ook future profits.
ut )hat happens if the assets are overpriced and do not #enerate sufficient future
revenues to repa! the (ank loanE Does this mean that the (anks mi#ht not #et repaid the
principal of the loanE $he ans)er lies in )hat mi#ht have (een a separate a#reement, oral
or )ritten, that %&R'& promised to the (anks that loaned mone! to the 8P%. $he
a#reement mi#ht look like the follo)in#. %&R'& )ill a#ree to #ive to the 8P% <or
;
directl! to the (anks= additional shares of %&R'& stock in sufficient market value for the
8P% to sell the stock and repa! the (ank loan principal. $his action mi#ht also (e re@uired
in the case )here %&R'& either has a do)n#rade of its o)n credit ratin# (elo)
investment #rade, or )hen the %&R'& stock price falls to a lo)er (oundar! level.
$herefore, )hen the market price reaches 921 per share, %&R'& must #ive the 8P%
enou#h shares of stock to ena(le the 8P% to repa! all of the outstandin# (ank loan
principal. 4o)ever, if %&R'& fails to inform its stockholders a(out these future
o(li#ations, the massive amounts of ne) shares that %&R'& )ould have to issue )ould
cause hi#h e@uit! dilution, immediatel! lo)er the %P8 of the stock, and further put
do)n)ard pressure on the market price of %&R'& stock. 8ince %&R'& (! !ear 2000
had created appro+imatel! 2000 8P%Hs, an! ma-or reversal of the compan!Hs operations
)ould (e catacl!smic.
$he a(ove illustration sho)s ho) %&R'& )as a(le to use the 8P%Hs to enter into de(t
o(li#ations )ith lenders, and still not report the de(t on its o)n financial (alance sheet.
Further, the compan! could use the sales of its assets and operations to the 8P% to
#enerate an immediate profit to add to its current income statement.
&o), in keepin# )ith the classic t!pe of PonGie scheme, !ou start )ith small deals to
(oost profits and hide small amounts of de(t off3(alance sheet. $o #ro) ne+t !earHs
earnin#s, support investment in additional assets and ne) (usinesses and repa! the old
lenders, !ou need to create more and (i##er 8P%Hs in the second !ear, then the third !ear,
etc. As lon# as increasin# stock prices continue, ever!thin# is fine. :hen lenders donHt
#et repaid or stock tri##er points are reached in the loan a#reements, then thin#s start to
unravel @uickl! and in the full #lare of the investors, securit! anal!sts and credit ratin#
a#encies. For %&R'&, activities undertaken over man! !ears came to pu(lic attention in
'cto(er, 200/, and the compan! )as taken into (ankruptc! (! Decem(er of that !ear.
*n addition to the creation of the 8P%Hs, %&R'& seemed to (e e@uall! (us! creatin# the
appearance of corporate profits from other Ja##ressiveK uses of accountin#. 'ne method
of (oostin# reported earnin#s after ta+es to shareholders is to find )a!s to lo)er the
corporate ta+ (ill on reported profits. ecause GAAP and ta+ accountin# rules can (e
@uite different, it mi#ht (e possi(le for a creative compan! to raise reported after3ta+
profits usin# GAAP accountin#, (ut usin# different rules to report Gero profits for
#overnment ta+ purposes. $o the shareholders in the annual report, follo)in# GAAP
rules, the compan! )ould report its hi#her pre3ta+ profits, )hile reportin# the ta+es
pa!a(le at a much lo)er amount. 'ne report su##ests that of %&R'&Hs !ear 2000
earnin#s after3ta+ reported to shareholders, a(out 920? million or 30 F of earnin#s )ere
the result of one3time ta+ savin# strate#ies created (! the ta+ accountants. "learl!,
companies can follo) rules that allo) them to minimiGe ta+es pa!a(le to #overnment.
And, )ith the comple+it! of C8 corporate ta+ codes and the added factor that %&R'&
)as a #lo(al compan! facin# man! different countr! ta+es, (ri#ht ta+ accountants can
contri(ute si#nificantl! to lo)erin# the compan!Hs total ta+ (ill. ! 8eptem(er of 200/,
reports indicate that lo)ered operatin# profits in man! of %&R'&Hs divisions resulted in
pressure on the ta+ department to #enerate up to 9?00 million of ne) ta+ savin#s for
fiscal !ear 200/. Accountants kno) that strate#ies to JavoidK e+cess ta+ pa!ments are
1
le#al, (ut that attempts to JevadeK ta+es (! fraudulent means is ille#al. 4ere a#ain,
%&R'&As internal staff likel! made use of le#al opinions from internal and e+ternal le#al
advisors that their techni@ues )ere BappropriateB.
$hese several e+amples indicate the potential methods (! )hich Ja##ressiveK application
of accountin# can hide de(t off3(alance sheet and create the appearance of increasin#
profits. $he result can have the effect of convincin# investors that the compan! stock is
more valua(le than it mi#ht trul! (e )orth. ut these methods, )hen learned a(out (! the
investin# pu(lic and the creditors, can lead to rapid deterioration of the compan! and the
value of its common stock shares. Reports in the media a(out %&R'& su##est that the
relia(ilit! of the compan! (alance sheet and income statements in the annual reports to
the 8%" and the shareholders over the previous 3 to 7 !ears )ere hi#hl! dependent on the
Ja##ressiveK and creative skills of %&R'&Hs accountin# staff, aided (! the ac@uiescence
of the Arthur Andersen auditors, and the counsel of le#al firms hired (! %&R'&.
ENRON Failure: Wh did it happen?
* think that the ans)er to )h! it happened is relativel! strai#htfor)ard. $he 6a!38killin#3
Fasto) e+ecutive team )as tr!in# to create a (usiness enterprise that )ould deliver
increasin# )ealth for their shareholders. 4o)ever, )hen the cold li#ht of da)n sho)ed
that the JrealK economics of the firm )as less than that desired or necessar! to support a
#ro)in# stock price, it (ecame necessar! for the firm to appl! a##ressive accountin#
methods to achieve the desired effect. $o the e+tent that the ne) (usiness ventures
undertaken re@uired continuousl! increasin# amounts of ne) capital, the e+ecutive team
relied on other creative mechanisms and accountin# to (rin# in ne) de(t capital, (ut to
do it in a )a! that )ould not make the firm look to (e more risk! to the ne) capital
investors. 'nce started do)n a slipper! slope, the need to continue these t!pes of
activities simpl! increased in each succeedin# !ear. $he! )anted to keep their -o(s,
personal )ealth and pu(lic acclaim, )hich meant keepin# %&R'& movin# for)ard (!
an! means. ut )here )ere the ethical checks and (alances that should have (een
reco#niGed (! mana#ementE

:hich (rin#s me to the %&R'& oard of Directors. :here )as the corporate
#overnance process that should have (een e+ercised (! the mem(ers of the oardE
"ertainl! the Audit "ommittee of the oard should have (een more critical of the
auditors and their )ork. ut, )ith the stock price and earnin#s risin#, the! )ere perhaps
lulled into a false sense of securit! a(out %&R'&Hs internal accountin#, and the
favora(le opinion letters si#ned (! Arthur Andersen. $he oard mem(ers en-o!ed their
status at %&R'& and the remuneration paid (! %&R'&. $he! seemed )illin# to accept
information from the 6a!38killin#3Fasto) team at face value, )ithout critical anal!sis.
$he! failed to live up to their role as overseers of mana#ement on (ehalf of the
stockholders )ho elected them to the oard.
%&R'& emplo!ees also facilitated the failure of their o)n compan!, and have suffered
accordin#l!. %&R'& had an inside le#al staff of over /00 la)!ers, and an accountin#
staff of several hundred trained accountants. All seemed to (e operatin# in a )a! that
0
supported the e+ecutive mana#ement team. $here seemed to (e little incentive or
)illin#ness to @uestion the methods (ein# emplo!ed to (oost reported profits and hide
corporate de(t. As emplo!ees )ere (ein# paid #ood salaries, provided )ith full (enefits,
and investin# their pension contri(utions in risin# compan! stock, rockin# the (oat a(out
@uestiona(le activities )ould (e a supreme act of coura#e, )ith hi#h risk penalties. 8o
the! remained supportive, until 8herron :atkins finall! tried to raise a)areness of
potential pro(lems.
%&R'& e+ecutives )ere further aided and supported (! the Arthur Andersen auditors
and scores of outside le#al firms )orkin# for the compan!. %&R'& )as a ver! #ood
client for Arthur Andersen, collectin# over 920 million in revenues in !ear 2000. $he
le#al firms )ere paid a(out 920 million in fees for their services that supported and
-ustified the activities of %&R'&. Remainin# in #ood standin# )ith the e+ecutive team at
%&R'& meant future (usiness for their firms, and perhaps added (onuses for individual
e+ecutives at the auditin# and the le#al firms. %+ecutives pro(a(l! do not look favora(l!
on outside firms )ho #ive contrar! advice to that )hich the e+ecutives desire. 8o
%&R'& ma! not have (een receivin# the ne#ative responses that )ould have cut short
the activities that ultimatel! (rou#ht %&R'& do)n. :hether ille#al activities occurred is
the su(-ect of future investi#ations involvin# the auditin# and le#al firms hired (!
%&R'&.
$he #overnment also (ears some responsi(ilit!. $he federal (ud#et for the 8%" has (een
reduced in past !ears, )hile the num(er and comple+it! of companies to (e overseen (!
the 8%" has increased. Politicians have reversed 8%" enforcement rules throu#h the
le#islative process, as seen in the de(ate over the rule of havin# companies e+pense
options #rants to emplo!ees in the income statement. 6e#islative activities have reduced
re#ulator! oversi#ht of ener#! companies, and replaced old re#ulations )ith ne) sets of
rules and procedures that are onl! tested later in the real )orld, and sometimes found not
to achieve the intended economic conse@uences. * )onHt even raise the issue of campai#n
contri(utions to the politicians (! individuals and corporationsD
And finall!, ho) the %&R'& failure resulted must (e vie)ed in relation to the desires of
investors and financial institutions. *nvestors in the markets created conditions that meant
companies )hich appeared to (e J)innersK sa) rapid stock price increases, )hile Jpoor
performersK had plun#in# stock prices. Pressure on compan! mana#ement )as intense to
continue to (e seen as a J)innerK to drive prices hi#her for their stockholders. Risk
evaluation of stocks seemed to (e secondar! to investors relative to hi#her reported
earnin#s per share. *n addition, the (anks and securit! (rokera#e firms )anted to do
(usiness )ith %&R'& to #enerate profits <and perhaps individual annual (onuses for the
emplo!ees doin# the %&R'& deals= for their o)n shareholders. *t seems evident, (ased
on information concernin# %&R'&Hs 8P% activities, that the financial institutions
(enefited from the relationship, )hile the! took steps to reduce the risks of dealin# )ith
%&R'& throu#h separate side deals and #uarantees that )ere not full! understood (! or
revealed to the investin# pu(lic.
/0
*n summar!, the %&R'& failure has not (een the result of -ust @uestiona(le activities (!
%&R'&Hs e+ecutive mana#ement team. $he cast of contri(utors to the failure and
(ankruptc! are (oth inside and outside the compan!. *tHs the total s!stem that resulted in
failure that needs to (e further understood and investi#ated.
! "roposal for the !cademic #ommunit
*f !ou the reader are still )ith me, * )ill no) endeavor to e+plain m! proposal for a
s!stematic stud! of %&R'&. *n an academic communit!, containin# the J(usiness t!pesK
and the Jli(eral studiesK, the %&R'& stor! need not (e -ust of interest to the J(usinessK
side. Les, the facult! of mana#ement, finance, accountin# and mana#ement information
s!stems can stud! %&R'& for insi#hts and lessons a(out ho) corporate value can (e
destro!ed, and )hat can (e learned to prevent similar situations. ut * see a (rid#e in the
%&R'& stor! )ith links to the li(eral studies in the areas of economics, #overnment,
human ps!cholo#! and le#al studies, at a minimum. ,! proposal is simpl! to esta(lish a
series of defined )orkshops to e+plore all the dimensions of the %&R'& failure, in order
to focus on the relevant issues and understand the s!stem in )hich an %&R'&3t!pe
situation can occur. $he (enefits can (e:
/.= to (rin# the t)o sides of the facult! to#ether to e+plore a common fascinatin# stor!,
2.= to provide a mechanism for sho)in# the students the multi3faceted operation of
(usiness mana#ement and li(eral studies disciplines in our societ!,
3.= as a means to potentiall! reach the )ider mem(ers of the academic and (usiness
communities interested in learnin# more a(out this fascinatin# and distur(in# failure
of a (usiness enterprise.
Possi(le topics for the seminars>research are as follo)s:
/. Accountin# for 8P%Hs and use of off3(alance sheet financin#. Facult! leaders from
Accountin# and Finance departments.
2. Anal!sis of common stock valuation and determination of de(t credit ratin#s after the
%&R'& e+perience. Facult! leaders from Finance department.
3. %valuation of corporate strate#! chan#es at %&R'& and its lessons. Facult! leaders
from ,ana#ement and usiness Polic!.
7. Arthur Andersen: ,ana#ement 8hills or *nvestor GuardiansE Facult! leaders from
Accountin#>Auditin# and Finance departments.
2. %valuation of "orporate Governance failures at %&R'& and possi(le improvements.
Facult! leaders from ,ana#ement and 'r#aniGation $heor!.
?. %+ploration of human factors, emplo!ee responsi(ilit! and individual ethics in
(usiness. Facult! leaders from ,ana#ement and Ps!cholo#! departments.
;. Government re#ulation of (usiness and corporate ta+ policies after the %&R'&
e+perience. Facult! leaders from %conomics and $a+ Accountin# departments.
1. $he role of the le#al s!stem in the post3%&R'& era. Facult! leaders from the 6e#al
8tudies department.
* hope that this endeavor mi#ht pi@ue !our interest and support.
//
R%F%R%&"%8
/$ New %or& 'imes ne)spaper, various dates
2. Washin(ton "ost ne)spaper, various dates
3$ Houston #hronicle ne)spaper, various dates
7. 8ecurities and %+chan#e "ommission, "ivil Action "omplaint &o. 43033007?,
,arch, 2003, 4ouston, $M
2$) "owers Report of the *pecial Investi(atin( #ommittee)+ su(mitted to the oard of
Directors, %&R'& "orporation, Fe(ruar! /, 2002.
/2
%&R'&3 8e(uah 8tudi 5%GAGA6A&
8iapa, a#aimana, ,en#apaD
Arthur Gudikunst, Ph.D. Revisi: April 2003
Profesor 5euan#an
Departemen 5euan#an
r!ant Cniversitas
Pendahuluan:
5isah dari %nron "orporation telah (erlan#sun# di media untuk le(ih dari setahun.
Dalam rentan# )aktu han!a ti#a tahun, %nron telah per#i dari pen#akuan pu(lik dan
profesional perusahaan dan eksekutif senior untuk men#hina, pen#hu-atan dan
ke(an#krutan. Perusahaan audit pu(lik, Arthur Andersen, pada dasarn!a telah hancur,
serta dipermalukan di depan umum. Puluhan ri(u kar!a)an dan investor telah secara
emosional dan finansial terpen#aruh. Perusahaan -asa keuan#an utama di (idan#
per(ankan, (roker sekuritas dan asuransi telah, dan mun#kin (elum, ditarik ke dalam
pertempuran hukum tentan# siapa !an# harus disalahkan atas ke#a#alan %nron.
*khtisar %nron:
erikut timeline untuk %nron disa-ikan untuk men#atur ton##ak utama (a#i perusahaan:
.uli /012 4ouston &atural Gas men!atu den#an *nter&orth untuk mem(entuk %nron,
se(a#ai perusahaan pipa #as alam interstate. 5enneth 6a! adalah "%'.
/0103 %nron mulai perda#an#an komoditas #as alam dan komoditas kontrak derivatif.
/0073 %nron mulai perda#an#an listrik se(a#ai komoditas dan kontrak derivatif keuan#an
terkait. .effre! 8killin# adalah eksekutif !an# (ertan##un# -a)a( atas ini usaha (isnis
(aru.
&ovem(er /0003 %nron'nline diluncurkan se(a#ai situs )e( untuk perda#an#an #lo(al
komoditas ener#i dan kontrak derivatif. .effre! 8killin# memimpin transformasi lan-utan
ini dari se(uah perusahaan pipa #as alam untuk pemasar #lo(al dan peda#an# min!ak,
#as dan ener#i listrik. Perda#an#an har#a saham 9 72 per saham.
2000 perda#an#an har#a saham di tin##i selama tahun 9 0/ per saham.
Fe(ruari 200/ .effre! 8killin# men#am(il posisi se(a#ai "%', dan 5en 6a! tetap se(a#ai
5etua De)an. 4ar#a saham diperda#an#kan pada kisaran tin##i 9 17 per saham.
A#ustus 200/ .effre! 8killin# men#undurkan diri se(a#ai "%', dan 5en 6a! kem(ali ke
posisi se(a#ai "%' dan "hairman. %nron )akil presiden, 8herron :atkins, menulis surat
kalen# ke 5en 6a! tentan# masalah (erat den#an kemitraan !an# dikenal se(a#ai 6.,
dan Raptor, akuntansi (a#i mereka kemitraan, peran %nron "F' di kemitraan, dan efek
/3
sampin# !an# mun#kin dari kemitraan ini dan mereka akuntansi -ika informasi !an#
pernah diun#kapkan ke pasar investasi.
.anuari3A#ustus 200/ 6a! dan 8killin# men-ual 9 7/.000.000 saham %nron. 'ran# dalam
perusahaan lainn!a men-ual 9 ;/.000.000 saham. 5ar!a)an dilaran# men-ual saham dari
rekenin# 70/ <k= pensiun kecuali pensiun atau menin##alkan peker-aan.
8eptem(er 200/ perda#an#an har#a saham sekitar 9 21 per saham, setelah seran#an
teroris 0>//.
'kto(er 200/ %nron melaporkan keru#ian 9 ?/1.000.000 untuk kuartal keti#a, dan
men!atakan kem(ali laporan keuan#an masa lalu !an# men#hasilkan 9 /200000000
pencadan#an dari peme#an# saham ekuitas %nron. 5eru#ian dan )ritedo)n hasil dari
%ntitas ertu-uan 5husus <kemitraan= !an# di(uat di (a)ah arahan "hief Financial
'fficer <"F'= Andre) Fasto). 8ecurities and %+chan#e "ommission <8%"=, meminta
pen-elasan le(ih lan-ut dan informasi tentan# keru#ian !an# dilaporkan dan Penin-auan
kem(ali keuan#an. "F' Andre) Fasto) di(e(askan dari posisin!a. ,asalah %nron
se(a#ian (esar terkait den#an Ba#resifB akuntansi !an# terkait den#an pelaporan utan#
pada neraca, laporan la(a dari pen-ualan aset dan pelaporan pendapatan dan arus kas dari
operasi !an# sedan# (erlan#sun#.
&ovem(er 200/ 8%" up#rade pen!elidikan %nron untuk Bpen!elidikan formalB. %nron
men!atakan (ah)a keuntun#ann!a selama lima tahun terakhir telah Bterlalu tin##iB oleh
9 21?.000.000. Perusahaan audit pu(lik, Arthur Andersen, menerima permintaan dari
8%" untuk catatan pada audit %nron. %nron menco(a untuk mendapatkan uan# tunai
den#an menunda pem(a!aran pin-aman dan mencari sum(er3sum(er (aru modal -an#ka
pendek. ,er#er upa!a den#an D!ne#! "orp di(atalkan.
Desem(er 200/ %nron file untuk perlindun#an ke(an#krutan a( //. "%' Arthur
Andersen men#atakan 5on#res (ah)a %nron mun#kin telah melan##ar undan#3undan#
sekuritas.
.anuari Departemen 5ehakiman 20023 mulai investi#asi kriminal ke#a#alan %nron.
6aporan diterima kehancuran dokumen di %nron dan Arthur Andersen setelah
pen!elidikan 8%" diumumkan. 8aham %nron diperda#an#kan den#an har#a antara 9 0,20
dan 9 0,20 per saham.
Fe(ruari3A#ustus 20023 investi#asi !an# sedan# (erlan#sun# oleh 8%", C8 Departemen
5ehakiman, C8 4ouse of Representatives, 8enat A8, et al. Perusahaan seperti ,errill
6!nch, "iticorp dan .P ,or#an "hase dipan##il untuk (ersaksi tentan# hu(un#an mereka
den#an %nron. Peran %nron dalam krisis ener#i "alifornia diselidiki. 5ar!a)an %nron
mempertahankan keru#ian (esar3(esaran di 70/ <k= rekenin# pensiun dan P45 kar!a)an
terus. Pemerintah federal men#evaluasi ke(utuhan untuk undan#3undan# (aru !an#
terkait den#an akun kar!a)an pensiun, re#ulasi dan pen#a)asan dari perusahaan audit
pu(lik, dan penipuan perusahaan dan isu3isu pemerintahan.
/7
%nron 5e#a#alan: 8iapa !an# ,en!alahkanE
Pada pandan#an pertama, akan terlihat (ah)a eksekutif senior %nron, terutama 6a!,
8killin# dan Fasto), adalah tersan#ka utama. &amun, mereka men#klaim (ah)a mereka
(eroperasi den#an persetu-uan dan persetu-uan dari De)an Direksi %nron. $he Audit
5omite De)an Direksi terus men#andalkan te#as umum audit, Arthur Andersen, !an#
terus menulis surat opini positif (ah)a akuntansi %nron adalah Bcukup untuk
mem(erikan ke!akinan !an# memadai men#enai keandalan laporan keuan#anB untuk
tahun /001, /000 dan 2000. Arthur Andersen auditor pu(lik men##unakan sistem
akuntansi !an# dikem(an#kan oleh %nron (ersama den#an nasihat dan (im(in#an dari
len#an konsultasi dari Arthur Andersen. 8istem akuntansi dikem(an#kan -u#a untuk
men!esuaikan diri den#an prinsip akuntansi !an# (erlaku <GAAP=, se(a#aimana
ditafsirkan oleh kesepakatan (ersama auditor Arthur Anderson dan unit konsultasi,
personil akuntansi %nron dan, sampai (atas tertentu, oleh perusahaan hukum le)at opini
!an# men#untun#kan pada akuntansi dan pera)atan pa-ak kemitraan %nron terkait <8P%=.
8epan-an# se-arah %nron, hin##a 'kto(er3&ovem(er 200/, pen!a-ian kem(ali laporan
la(a ru#i dan neraca karena 6., dan Raptor kemitraan, semua pemain !an# ditun-ukkan
di atas salin# mem(eri konfirmasi lain dan persetu-uan untuk praktek akuntansi dan
(isnis !an# ti(a3ti(a sedan# di(atalkan pada (ulan 'kto(er. Pada tahun se(elumn!a,
%nron mem(a!ar le(ih dari 9 20 -uta untuk Arthur Andersen untuk -asa konsultasi dan
audit mereka. Firma hukum, men!ediakan la!anan dan pendapat kepada %nron,
menerima sekitar 9 20 -uta untuk (ia!a. Aki(atn!a, (er(a#ai pemain %nron semua !akin
(ah)a mereka (eroperasi dalam suatu sistem di mana masin#3masin# sedan# di(ahas
oleh tindakan dan konfirmasi dari oran# lain dalam sistem. $idak ada !an# melakukan
sesuatu !an# salah, karena tindakan semua di(erkati oleh pemain lain dalam sistemD
$api siapa la#i !an# terli(at dalam %nron (encanaE ,ari kita tidak melupakan (er(a#ai
an##ota komunitas keuan#an, !aitu, (ank3(ank, lem(a#a pemerin#kat kredit dan
perusahaan pialan# sekuritas. Den#ar pendapat (aru3(aru ini di 8enat A8 dieksplorasi
ke#iatan .P ,or#an "hase dan "iti(ank <sisi per(ankan "iti#roup= den#an %nron.
Rupan!a kedua (ank terse(ut terli(at dalam apa !an# dise(ut Bpra(a!arB transaksi ener#i.
5ar!a)an (ank (erurusan den#an %nron dan %nron kemitraan untuk men!ediakan uan#
tunai untuk %nron untuk operasi keuan#an sehari3hari, den#an cara !an# (isa dilaporkan
se(a#ai Baktivitas operasiB versus Bpem(ia!aan utan#B ke#iatan. ank3(ank !an#
menemukan cara, didukun# oleh pendapat hukum dan akuntansi, !an# memun#kinkan
%nron untuk terli(at dalam praktek3praktek !an# memiliki efek men!em(un!ikan
ke)a-i(an utan#n!a off3the3neraca, sementara muncul untuk melaporkan la(a positif dan
aliran dana dari operasi.
,errill 6!nch ditan#ani den#an kemitraan %nron <&i#eria ar#e Pro-ect= dalam transaksi
!an# memun#kinkan %nron untuk melaporkan tam(ahan 9 /2 -uta untuk keuntun#an
se(elum akhir tahun fiskal /000. ,errill 6!nch men!atakan (ah)a transaksi adalah
pem(elian 9 ;.000.000 dari ekuitas, den#an risiko !an# men!ertain!a ekuitas, tetapi
(ahkan (uletin perusahaan ,errill sendiri dan e3mail eksekutif !an# indiscriminant
/2
dalam men#acu pada kesepakatan se(a#ai BekuitasB dalam (e(erapa dokumen, dan
Bpin-amanB dalam dokumen lain. Pada intin!a, ,errill BekuitasB investasi di-amin akan
dilunasi dalam ? (ulan pada men!atakan tin#kat /2F pen#em(alian, selain %nron
mem(a!ar (ia!a 9 222.000 ketika dokumen ditandatan#ani, dan setu-u untuk
men#kompensasi ,errill untuk semua pen#eluaran #am(ar kertas3kertas le#al untuk
transaksi. <8e(a#ai seoran# profesor keuan#an dan investasi, ini BdealB terden#ar (an!ak
(a#i sa!a seperti di-amin Bpin-amanB pada tin#kat (un#a tetap, dan tidak n!ata BekuitasB
posisi den#an risiko har#a kepada investor.=
$api di mana (er(a#ai lem(a#a kredit !an# seharusn!a untuk mem(erikan saran
independen tentan# kemampuan keuan#an %nron untuk mem(a!ar hutan#3n!aE ,ood!
dan perin#kat kredit 8tandard and Poor menun-ukkan (ah)a %nron adalah Binvestment
#radeB risiko kredit hin##a memasuki tahun 200/, meskipun )isata)an itu pelunakan.
Pen!a-ian kem(ali laporan keuan#an (esar3(esaran pada (ulan 'kto(er 200/, dan
)a)asan le(ih lan-ut ke metode pem(ia!aan Boff neracaB dari %nron men!e(a(kan
penurunan perin#kat untuk B-unkB atau status risiko tin##i %nron se(a#ai kreditor.
&amun, (ahkan lem(a#a pemerin#kat kredit, den#an akuntansi mereka seharusn!a dan
keahlian analitis, #a#al untuk memahami kondisi %nron dan mem(erikan perin#atan dini
dari ke#a#alan potensial untuk lem(a#a3lem(a#a pu(lik dan keuan#an investasi.
Di mana (adan hukum pemerintahE 8ecurities and %+chan#e "ommission, pen#a)asan
pemerintah federal kami perusahaan pu(lik dan pasar surat (erhar#a, rupan!a tertan#kap
datar kaki den#an %nron 'kto(er 200/, )ah!u. &e#ara a#ian "alifornia dere#ulasi
ener#i listrik den#an rencana !an# ditetapkan aturan untuk perda#an#an ener#i dan har#a,
tetapi aturan !an# tampakn!a (e#itu rumit (ah)a ada insentif (a#i produsen ener#i dan
perusahaan da#an# untuk Bpermainan sistemB untuk mem(uat keuntun#an den#an
menemukan celah dalam sistem. $he "alifornia dere#ulasi ener#i -u#a memiliki (e(erapa
karakteristik !an# menarik, seperti, har#a ener#i untuk konsumen !an# tetap dalam har#a,
tetapi perusahaan3perusahaan transmisi ener#i untuk konsumen harus mem(a!ar har#a
ener#i !an# didere#ulasi dan disesuaikan den#an kondisi pasar !an# (erlaku.
,un#kinkah politisi -u#a telah men-adi mitra tanpa disadari dalam ke#a#alan %nronE
Dan tidak mem(iarkan #a#al untuk men#identifikasi peran %nron perin#kat3dan3file !an#
kar!a)an dan mas!arakat investasi umum. 5ar!a)an %nron !an# melihat operasi sehari3
hari perusahaan dekat dan pri(adi. Departemen akuntansi memiliki ratusan akuntan
profesional terlatih (eker-a pada pelaporan transaksi perusahaan. an!ak akuntan !an#
-u#a kar!a)an terle(ih dahulu dari perusahaan audit, Arthur Andersen, dilatih untuk
melihat transaksi den#an perspektif BindependenB auditor. Akhirn!a, salah satu kar!a)an,
8herron :atkins, apakah menco(a untuk meniup peluit pada masalah akuntansi !an#
dicuri#ai, tetapi han!a dalam komunikasi anonim untuk "%' %nron. Dan apa !an#
mendoron# eksekutif %nron untuk melakukan hal3hal !an# sekaran# terkait den#an
ke#a#alan perusahaanE .a)a(an !an# -elas adalah kein#inan untuk memenuhi
keuntun#an dan har#a saham harapan investasi pu(lik, dalam upa!a untuk memenuhi
tu-uan perusahaan, se(a#aimana tercantum dalam (uku mana-emen keuan#an, untuk
Bmemaksimalkan nilai perusahaan kepada para peme#an# sahamB. Pada tahun /000,
investor pada efek ekuitas men-adi terpikat den#an harapan (un#a tahunan 22330F dari
/?
keuntun#an, dan perusahaan dihar#ai den#an pen#hasilan !an# (erkem(an# pesat den#an
har#a saham !an# san#at ka!a, tetapi -u#a dihukum (erat saham perusahaan !an# #a#al
memenuhi B:all 8treet Bdiharapkan an#ka la(a periode (erikutn!a. Dapatkah Anda
men#atakan investor BkeserakahanBE Aki(atn!a, para eksekutif dan kar!a)an %nron
terperan#kap dalam kein#inan untuk melaporkan semakin menin#kat pendapatan untuk
men-a#a har#a saham naik, dan untuk melindun#i peker-aan dan keka!aan mereka dalam
rencana pensiun mereka.
8in#katn!a, !an# men!e(a(kan ke#a#alan %nronE .a)a(an: (an!ak pemain individual
dan institusionalD ,eskipun mun#kin n!aman untuk han!a memper(aiki kesalahan pada
(e(erapa Bapel (usukB di perusahaan, ada le(ih (an!ak koki !an# (erkontri(usi re(usan
men#erikan dila!ani oleh %nron. 5ami akan lihat nanti siapa !an# Ble#alB untuk
men!alahkan, setelah proses hukum (eker-a den#an cara melalui sistem pen#adilan.
%nron 5e#a#alan: a#aimana hal itu (isa ter-adiE
Acara pu(lik ter-al !an# (enar3(enar men!e(a(kan ke#a#alan %nron kemun#kinan (esar
pen#umuman pen!a-ian kem(ali keuan#an dan keuntun#an pada (ulan 'kto(er 200/.
$api ini han!a Bpuncak #unun# esB. Pen-elasan !an# n!ata terletak pada operasi dan
ke#iatan %nron selama (ertahun3tahun men-elan# 'kto(er 200/. Pentin# untuk ini adalah
sifat dari peru(ahan ke#iatan usaha %nron, dari seoran# produser dan transporter ener#i,
untuk pemasar #lo(al dan peda#an# ener#i, den#an produksi dan perda#an#an ener#i,
ener#i derivatif keuan#an produk, dan sistem telekomunikasi dan lainn!a produk derivatif
perda#an#an. %nron (ahkan men#em(an#kan produk keuan#an (aru pada cuaca dan
penin#katan kredit korporasi, !aitu kontrak keuan#an !an# akan melakukan pem(a!aran
(erdasarkan hasil cuaca dan peru(ahan kela!akan kredit usaha. &amun, isu akuntansi dan
audit untuk ke#iatan (aru, dan menin#katn!a pen##unaan kemitraan off3(alance3sheet
dan pendanaan !an# ter-alin rumit den#an masalah (a#aimana ke#a#alan ter-adi. Dan
akhirn!a, dampak lin#kun#an perusahaan, ekonomi dan politik harus dimasukkan se(a#ai
faktor kontri(usi.
8an#at mun#kin (ah)a (uku dan (ela-ar (uku3(uku akan ditulis tentan# topik ini untuk
tahun !an# akan datan#, -adi sa!a han!a akan men#an#kat isu3isu !an# sa!a lihat se(a#ai
kunci (a#aimana %nron turun (e#itu cepat men-adi (an#krut.
5elahiran %nron pada tahun /012 adalah se(a#ai perusahaan !an# ditransmisikan #as
(umi ke pelan##an melalui sistem pipa fisikn!a. *tu di(an#un pipa den#an masa hidup
fisik !an# pan-an#, dan men##unakan modal utan# untuk men#umpulkan uan# untuk
pem(an#unan fasilitas. Peraturan pemerintah, di tin#kat ne#ara (a#ian dan federal,
perusahaan ener#i dan har#a adalah san#at komprehensif. $api ada kecenderun#an dalam
pemerintahan dan ke(i-akan ekonomi untuk mendere#ulasi industri dan mem(iarkan
kekuatan pasar (erlaku, !an# -u#a akan men#u(ah karakteristik risiko dan im(alan dari
perusahaan di industri ini. er#erak ke arah dere#ulasi -u#a mem(uka kemun#kinan (aru
untuk ke#iatan perusahaan dan produk. %nron memulai pen#em(an#an produk keuan#an
dan platform perda#an#an komoditas <%nron'nline= !an# pindah perusahaan untuk
men-adi se(uah perusahaan (isnis (er(asis -asa keuan#an dan teknolo#i informasi.
/;
,en#hasilkan ener#i dan mem(a)an!a ke pen##una akhir adalah mem(osankan, (aris
!an# lama usaha, den#an potensi pertum(uhan !an# ter(atas dan da!a tarik investor.
Fokus (aru %nron pada men-adi pemasar #lo(al dan peda#an# ener#i dan produk
keuan#an lainn!a adalah #elom(an# (aru !an# akan mena)arkan prospek la(a !an#
(erkem(an# pesat dan har#a saham (a#i peme#an# saham.
$api, lin#kun#an operasional !an# terkait ke(utuhan untuk mem(ia!ai pen#em(an#an
ke#iatan usaha !an# sama sekali (aru, dan men#u(ah karakteristik aliran dana masuk dan
keluar dari perusahaan. Risiko untuk %nron dari strate#i ini perusahaan !an# (aru akan
mencakup varia(ilitas dana !an# di(utuhkan untuk mem(ia!ai ke#iatan (aru, varia(ilitas
keuntun#an ekonomi !an# dise(a(kan oleh faktor pasar !an# (aru, dan kompleksitas dari
penerapan sistem akuntansi untuk menan#ani produk3produk (aru > (isnis. .adi %nron
mem(utuhkan sum(er modal (aru !an# dapat di#unakan untuk (erinvestasi dalam arah
(aru perusahaan. 4al ini akan (eru(ah di masa depan kemampuan perusahaan untuk
memenuhi ke)a-i(an keuan#an kepada mereka !an# men!ediakan modal (aru. ank dan
peme#an# o(li#asi akan mem(erikan pin-aman den#an (un#a dan ke)a-i(an pem(a!aran
an#suran tetap oleh kontrak hukum, den#an risiko !an# terdefinisi den#an (aik dan
hukuman -ika pem(a!aran tidak di(uat. *nvestor ekuitas mem(eli saham !an# (aru
diter(itkan dari saham %nron sedan# mem(uat keputusan (erdasarkan masa depan
diharapkan keuntun#an dan risiko !an# cukup (er(eda dari se(uah perusahaan produksi
ener#i dan transportasi. 5euntun#an masa mendatan# untuk pem(eli saham terse(ut
%nron (aru akan ter#antun# pada ke(erhasilan investasi strate#is perusahaan (aru.
Den#an latar (elakan# ini, 6a! dan 8killin#, den#an saran dan persetu-uan dari an##ota
De)an Direksi <terpilih, dalam teori, oleh dan untuk kepentin#an para peme#an# saham=
melan-utkan untuk menerapkan strate#i perusahaan !an# (aru. 8eoran# pe#a)ai (aru,
Fasto), di(a)a ke perusahaan dari industri per(ankan dan (an#kit untuk men-adi "hief
Financial 'fficer. ersama3sama, 6a!, 8killin# dan Fasto) memiliki tan##un# -a)a(
untuk melaksanakan ke#iatan pem(ia!aan, akuntansi dan operasional perusahaan karena
men#u(ah dirin!a dalam )aktu perusahaan. $ekanan pada tim mana-emen ini adalah
untuk mem(a)a transformasi perusahaan, untuk men#hasilkan keuntun#an !an# tum(uh
dari operasi lama dan (aru, dan untuk menum(uhkan nilai perusahaan, seperti !an#
ditun-ukkan oleh har#a pasar dari saham (iasa.
Pan##un# didirikan. $ransformasi (isnis %nron te#as diatur di tempat di ten#ah dan akhir
/0003an. &amun, pasar (aru dan produk (aru mem(a)a risiko (aru dan pesain# (aru.
Prakiraan (erapa (an!ak pem(ia!aan (aru !an# di(utuhkan untuk mendanai ke#iatan
(aru mun#kin ter(ukti men-adi terlalu rendah. 6e(ih (an!ak modal (aru harus
di(an#kitkan dari sum(er modal eksternal. Pem(eri pin-aman in#in -aminan (ah)a
pin-aman dapat dan akan dilunasi, se(a#ian ditentukan oleh lem(a#a pemerin#kat kredit
pada perusahaan, !an# didasarkan pada perusahaan melaporkan laporan keuan#an !an#
di(eri meterai persetu-uan oleh auditor pu(lik. *nvestor mem(eli saham (aru %nron han!a
akan dihar#ai -ika har#a saham terus menin#kat, tapi itu san#at ter#antun# pada
perusahaan terus men#hasilkan !an# le(ih tin##i dilaporkan setelah la(a akuntansi pa-ak.
.adi dihadapkan pada ken!ataan. Perusahaan menemukan (ah)a investasi (aru tidak
/1
men#untun#kan seperti !an# diperkirakan atau diin#inkan. Petu#as keuan#an
(ertan##un# -a)a( untuk menin#katkan terus menin#katn!a -umlah modal (aru untuk
mendanai investasi tum(uh di)a-i(kan untuk memenuhi strate#i perusahaan !an# (aru.
:all 8treet analis sekuritas men#harapkan untuk melihat aset tum(uh dan (erkem(an#
pendapatan perusahaan !an# tercermin dalam setelah pa-ak melaporkan la(a dan la(a per
saham <%P8=. $im mana-emen harus mem(erikan modal (aru untuk memenuhi
ke(utuhan, harus terus mem(a!ar dan memenuhi pem(a!aran kem(ali pin-aman masa
lalu, dan harus mem(erikan nomor pendapatan (ottom line pada laporan la(a. a#aimana
Anda mencapai hal ini ketika ekonomi !an# mendasari (isnis adalah -auh dari harapanE
8alah satu -a)a(ann!a adalah untuk men!esuaikan operasi perusahaan untuk
mencerminkan lin#kun#an ekonomi !an# (eru(ah <(erpotensi men#ece)akan peme#an#
saham perusahaan dan memiliki tim mana-emen senior di#antikan oleh Direksi=. .a)a(an
lainn!a adalah menemukan cara untuk menin#katkan modal (aru tanpa itu muncul
ne#atif terhadap laporan keuan#an perusahaan, dan untuk menemukan metodolo#i
akuntansi !an# akan memun#kinkan laporan la(a men!atakan kepada investor !an# akan
menin#kat mele(ihi tin#kat se(enarn!a dari apa !an# dise(ut BekonomiB keuntun#an (a#i
perusahaan. *nformasi dan hukum tuduhan men#enai %nron tampakn!a menun-ukkan
(ah)a mana-emen men#am(il kursus kedua tindakan.
4asil keputusan kepemimpinan 6a!38killin#3Fasto) memulai %nron di -alan
men##unakan peran#kat akuntansi !an# tersedia untuk kedua men#ecilkan -umlah modal
!an# dipin-am se(enarn!a di#unakan oleh perusahaan, dan untuk BmemproduksiB le(ih
tin##i setelah pa-ak melaporkan la(a dan %P8 kepada peme#an# saham . ,asalah apakah
ini adalah tindakan hukum atau ile#al menun##u hasil dari u-i co(a lapan#an di masa
depan, tapi fakta (ah)a %nron sekaran# dalam kondisi hukum a( // ke(an#krutan,
den#an keru#ian (esar nilai saham dan ketidakpastian tentan# pem(eri pin-aman !an#
dilunasi, adalah hasil dari tindakan set di tempat oleh pe-a(at eksekutif %nron <!an#
mem(antu dan (ersekon#kol sampai (atas tertentu oleh an##ota Direksi, Arthur Andersen
dan (er(a#ai firma hukum luar=.
5isah "ARA ini ter-adi san#at kompleks. 8a!a akan menco(a untuk men-elaskan
(e(erapa teknik !an# di#unakan oleh %nron untuk di (a)ah3laporan utan# diperlukan
untuk men-a#a operasional perusahaan (er-alan dan mele(ih3le(ihkan keuntun#an
perusahaan. 5edua #ol itu dicapai den#an penciptaan %ntitas khusus tu-uan <8P% atau
kemitraan=. 8e(uah perusahaan dapat masuk ke dalam kemitraan den#an investor luar
dan pem(eri pin-aman, dan tidak perlu men#konsolidasikan entitas ke dalam laporan
keuan#an perusahaan dilaporkan ke mas!arakat investor. .adi, %nron mem(entuk
kemitraan den#an luar investor ekuitas !an# mem(eli sesedikit 3 persen dari total modal
kemitraan, den#an %nron investasi sisa i(ukota. erikutn!a, kemitraan mem(eli aset dari
%nron, den#an men##unakan modal dari mitra dan pin-aman dari lem(a#a keuan#an atau
(ank.
8e(a#ai ilustrasi sederhana, asumsikan (ah)a %nron men-ual peralatan pem(an#kit
listrik untuk 8P% untuk har#a 9 20 -uta. ank memin-amkan 8P% 9 72.000.000 untuk
pem(elian den#an -atuh tempo !an# pasti dan tin#kat suku (un#a. %nron (erinvestasi 9
0.200.000 ekuitas 8P% dan men-ual saham sehar#a 9 7,2 -uta <le(ih dari 3 persen dari
/0
total modal= kepada investor luar. 5arena pin-aman (ank tidak lan#sun# ke %nron, tetapi
untuk 8P%, itu tidak (isa dilaporkan se(a#ai ke)a-i(an utan# pada neraca. 8elan-utn!a,
-ika nilai (uku aset pada neraca %nron untuk peralatan ini adalah 9 21 -uta pada saat
pen-ualan ke 8P%, maka %nron sekaran# dapat melaporkan pada tahun fiskal ini
keuntun#an atas pen-ualan 9 203 9 21 I 9 22 -uta keuntun#an . Penerimaan kas %nron dari
8P% adalah 9 20.000.000 dikuran#i investasi ekuitas pada ekuitas 8P% <9 70.200.000 kas
(ersih (aru untuk %nron=. .ika 8P% (erhasil men##unakan aset untuk men#hasilkan arus
kas masa depan untuk mem(a!ar kem(ali pin-aman ke (ank dan memiliki keuntun#an
!an# tersisa (a#i para mitra 8P%, maka %nron akan mem(ukukan keuntun#an di masa
depan.
$api apa !an# ter-adi -ika aset terse(ut terlalu mahal dan tidak men#hasilkan pendapatan
!an# memadai untuk mem(a!ar kem(ali pin-aman (ankE Apakah ini (erarti (ah)a (ank
tidak mun#kin akan melunasi pokok pin-amanE .a)a(ann!a terletak pada apa !an#
mun#kin telah per-an-ian terpisah, lisan atau tertulis, (ah)a %nron (er-an-i untuk (ank3
(ank !an# memin-amkan uan# kepada 8P%. Per-an-ian terse(ut akan terlihat seperti
(erikut ini. %nron akan setu-u untuk mem(erikan kepada 8P% <atau lan#sun# ke (ank=
saham tam(ahan saham %nron nilai pasar !an# cukup untuk 8P% untuk men-ual saham
dan mem(a!ar kem(ali pokok pin-aman (ank. $indakan ini -u#a mun#kin diperlukan
dalam kasus di mana %nron (aik memiliki penurunan perin#kat kredit sendiri di (a)ah
investment #rade, atau ketika har#a saham %nron -atuh ke tin#kat (atas (a)ah. 5arena
itu, ketika har#a pasar mencapai 9 21 per saham, %nron harus mem(erikan 8P% saham
cukup saham untuk men#aktifkan 8P% untuk melunasi seluruh pokok pin-aman (ank.
&amun, -ika %nron #a#al untuk men#informasikan para peme#an# sahamn!a tentan#
ke)a-i(an3ke)a-i(an ini di masa depan, !an# se-umlah (esar saham (aru !an# %nron
harus men#eluarkan akan men!e(a(kan dilusi ekuitas tin##i, se#era menurunkan %P8
saham, dan selan-utn!a mem(erikan tekanan ke (a)ah pada har#a pasar saham %nron.
8e-ak %nron tahun 2000 telah menciptakan sekitar 2.000 8P%, setiap pem(alikan (esar
dari operasi perusahaan akan dahs!at.
*lustrasi diatas menun-ukkan (a#aimana %nron (isa men##unakan 8P% untuk masuk ke
dalam ke)a-i(an utan# den#an kreditur, dan masih (elum melaporkan utan# pada neraca
keuan#ann!a sendiri. 8elan-utn!a, perusahaan dapat men##unakan pen-ualan aset dan
operasi ke 8P% untuk men#hasilkan keuntun#an lan#sun# untuk menam(ah laporan la(a
ru#i saat ini.
8ekaran#, sesuai den#an -enis klasik skema PonGie, Anda mulai den#an pena)aran kecil
untuk menin#katkan keuntun#an dan men!em(un!ikan se-umlah kecil utan# off3(alance
sheet. Cntuk menum(uhkan pendapatan tahun depan, mendukun# investasi dalam aset
tam(ahan dan (isnis (aru dan mem(a!ar kem(ali pin-aman lama, Anda perlu
menciptakan le(ih (an!ak dan le(ih (esar 8P% pada tahun kedua, maka tahun keti#a, dll
8elama kenaikan har#a saham terus, semuan!a (aik3(aik sa-a. 5etika pem(eri pin-aman
tidak mendapatkan dilunasi atau titik pemicu saham dicapai dalam per-an-ian pin-aman,
maka hal3hal mulai terurai den#an cepat dan dalam silau penuh dari investor, analis
keamanan dan perin#kat kredit lem(a#a. Cntuk %nron, ke#iatan !an# dilakukan selama
(ertahun3tahun datan# ke perhatian pu(lik pada (ulan 'kto(er 200/, dan perusahaan itu
20
di(a)a ke ke(an#krutan pada (ulan Desem(er tahun itu.
8elain penciptaan 8P%, %nron tampakn!a sama3sama si(uk mem(uat penampilan
keuntun#an perusahaan dari !an# lain Ba#resifB pen##unaan akuntansi. 8alah satu metode
menin#katkan la(a !an# dilaporkan setelah pa-ak kepada peme#an# saham adalah untuk
menemukan cara3cara untuk menurunkan ta#ihan pa-ak perusahaan atas keuntun#an !an#
dilaporkan. 5arena GAAP dan aturan akuntansi pa-ak (isa san#at (er(eda, ada
kemun#kinan untuk se(uah perusahaan kreatif untuk menin#katkan dilaporkan setelah
pa-ak keuntun#an men##unakan akuntansi GAAP, tetapi men##unakan aturan !an#
(er(eda untuk melaporkan nol keuntun#an untuk tu-uan pa-ak pemerintah. 5epada
peme#an# saham dalam laporan tahunan, men#ikuti aturan3aturan GAAP, perusahaan
akan melaporkan la(a se(elum pa-ak !an# le(ih tin##i, sementara melaporkan hutan#
pa-ak pada -umlah !an# -auh le(ih rendah. 8atu laporan menun-ukkan (ah)a dari tahun
%nron 2000 la(a setelah pa-ak dilaporkan kepada peme#an# saham, sekitar 9 20?.000.000
atau 30F dari la(a adalah hasil dari satu kali strate#i pen#hematan pa-ak !an# di(uat oleh
akuntan pa-ak. .elas, perusahaan dapat men#ikuti aturan !an# memun#kinkan mereka
untuk meminimalkan pa-ak !an# harus di(a!arkan kepada pemerintah. Dan, den#an
kompleksitas A8 kode pa-ak perusahaan dan faktor menam(ahkan (ah)a %nron adalah
se(uah perusahaan #lo(al !an# dihadapi (an!ak pa-ak ne#ara !an# (er(eda, akuntan
pa-ak cerah dapat mem(erikan kontri(usi !an# si#nifikan untuk menurunkan total ta#ihan
pa-ak perusahaan. Pada (ulan 8eptem(er 200/, laporan menun-ukkan (ah)a la(a usaha
menurunkan di (an!ak divisi %nron men#aki(atkan tekanan pada departemen pa-ak
untuk men#hasilkan sampai 9 ?00 -uta pen#hematan pa-ak (aru untuk tahun fiskal 200/.
Akuntan tahu (ah)a strate#i untuk Bmen#hindariB pem(a!aran pa-ak kele(ihan hukum,
tetapi !an# menco(a untuk Bmen#hindariB pa-ak oleh penipuan (erarti adalah ile#al. Di
sini sekali la#i, staf internal %nron kemun#kinan memanfaatkan pendapat hukum dari
penasehat hukum internal dan eksternal (ah)a teknik mereka BtepatB.
,askapai (e(erapa contoh menun-ukkan metode potensial den#an !an# Ba#resifB
penerapan akuntansi dapat men!em(un!ikan utan# off3(alance sheet dan menciptakan
penampilan menin#katkan keuntun#an. 4asiln!a dapat memiliki efek me!akinkan
investor (ah)a saham perusahaan le(ih (erhar#a daripada mun#kin (enar3(enar la!ak.
$etapi metode ini, ketika (ela-ar tentan# oleh investasi pu(lik dan kreditur, dapat
men!e(a(kan kerusakan !an# cepat dari perusahaan dan nilai saham saham (iasa.
6aporan di media tentan# %nron menun-ukkan (ah)a keandalan neraca perusahaan dan
laporan la(a ru#i dalam laporan tahunan kepada 8%" dan peme#an# saham selama 3
sampai 7 tahun se(elumn!a !an# san#at ter#antun# pada keterampilan Ba#resifB dan
kreatif dari staf akuntansi %nron , di(antu oleh persetu-uan dari auditor Arthur Andersen,
dan nasihat dari perusahaan hukum !an# dise)a oleh %nron.
%nron 5e#a#alan: ,en#apa hal itu (isa ter-adiE
8a!a (erpikir (ah)a -a)a(an men#apa hal itu ter-adi relatif mudah. $im eksekutif 6a!3
8killin#3Fasto) (erusaha untuk menciptakan se(uah perusahaan (isnis !an# akan
mem(erikan penin#katan keka!aan (a#i peme#an# saham mereka. &amun, ketika caha!a
din#in fa-ar menun-ukkan (ah)a Bn!ataB ekonomi perusahaan adalah kuran# dari itu
2/
diin#inkan atau diperlukan untuk mendukun# har#a saham tum(uh, men-adi perlu (a#i
perusahaan untuk menerapkan metode akuntansi !an# a#resif untuk mencapai efek !an#
diin#inkan. 8e-auh (ah)a usaha (isnis (aru !an# dilakukan diperlukan terus
menin#katn!a -umlah modal (aru, tim eksekutif men#andalkan mekanisme kreatif
lainn!a dan akuntansi untuk mem(a)a modal utan# (aru, tapi untuk melakukann!a
den#an cara !an# tidak akan mem(uat tampilan perusahaan untuk men-adi le(ih (erisiko
untuk investor modal (aru. 8etelah mulai menuruni leren# licin, ke(utuhan untuk
melan-utkan -enis ke#iatan han!a menin#kat pada setiap tahun (erikutn!a. ,ereka in#in
mempertahankan peker-aan mereka, keka!aan pri(adi dan pu-ian pu(lik, !an# (erarti
men-a#a %nron (er#erak ma-u den#an cara apapun. $api di mana pemeriksaan etika dan
saldo !an# seharusn!a diakui oleh mana-emenE

Lan# mem(a)a sa!a ke De)an %nron Direksi. Di mana proses tata kelola perusahaan
!an# seharusn!a dilakukan oleh an##ota De)anE $entu 5omite Audit De)an seharusn!a
le(ih kritis terhadap auditor dan peker-aan mereka. $api, den#an har#a saham dan la(a
menin#kat, mereka mun#kin ter(uai ke dalam rasa aman palsu tentan# akuntansi internal
%nron, dan huruf pendapat !an# men#untun#kan ditandatan#ani oleh Arthur Andersen.
Para an##ota De)an menikmati status di %nron dan im(alan !an# di(a!arkan oleh
%nron. ,ereka tampakn!a (ersedia untuk menerima informasi dari tim 6a!38killin#3
Fasto) pada nilai nominal, tanpa analisis kritis. ,ereka #a#al untuk hidup sampai peran
mereka se(a#ai pen#a)as pen#elolaan atas nama peme#an# saham !an# memilih mereka
kepada De)an.
5ar!a)an %nron -u#a memfasilitasi ke#a#alan perusahaan mereka sendiri, dan telah
menderita sesuai. %nron memiliki staf le#al dalam le(ih dari /00 pen#acara, dan seoran#
staf akuntin# (e(erapa ratus akuntan terlatih. 8emua tampakn!a (eroperasi den#an cara
!an# didukun# tim mana-emen eksekutif. $ampakn!a ada sedikit insentif atau kesediaan
untuk mempertan!akan metode !an# di#unakan untuk menin#katkan keuntun#an !an#
dilaporkan dan men!em(un!ikan utan# perusahaan. 8e(a#ai kar!a)an di(a!ar #a-i !an#
(aik, dilen#kapi den#an manfaat penuh, dan investasi iuran pensiun mereka dalam
menin#katn!a saham perusahaan, #o!an# perahu tentan# ke#iatan dipertan!akan akan
men-adi tindakan tertin##i dari ke(eranian, den#an hukuman (erisiko tin##i. .adi mereka
tetap mendukun#, sampai 8herron :atkins akhirn!a menco(a untuk menin#katkan
kesadaran potensi masalah.
%ksekutif %nron !an# le(ih di(antu dan didukun# oleh auditor Arthur Andersen dan
se-umlah perusahaan hukum luar (eker-a untuk perusahaan. %nron adalah klien !an#
san#at (aik untuk Arthur Andersen, men#umpulkan le(ih dari 9 20 -uta pendapatan pada
tahun 2000. Perusahaan3perusahaan hukum di(a!ar sekitar 9 20 -uta dalam (ia!a untuk
la!anan mereka !an# mendukun# dan mem(enarkan ke#iatan %nron. 8isa dalam
performa !an# (aik den#an tim eksekutif di %nron (erarti (isnis masa depan untuk
perusahaan mereka, dan mun#kin ditam(ahkan (onus (a#i para eksekutif individu pada
audit dan perusahaan hukum. %ksekutif mun#kin tidak terlihat (aik pada perusahaan3
perusahaan di luar !an# mem(erikan nasihat (ertentan#an den#an !an# men#in#inkan
eksekutif. .adi %nron mun#kin (elum menerima tan##apan ne#atif !an# akan memoton#
pendek ke#iatan !an# pada akhirn!a mem(a)a %nron turun. Apakah ke#iatan ile#al
22
ter-adi adalah su(-ek pen!elidikan masa depan !an# meli(atkan audit dan perusahaan
hukum !an# dise)a oleh %nron.
Pemerintah -u#a menan##un# (e(erapa tan##un# -a)a(. An##aran federal untuk 8%"
telah (erkuran# dalam (e(erapa tahun terakhir, sementara -umlah dan kompleksitas
perusahaan harus dia)asi oleh 8%" telah menin#kat. Politisi telah mem(alikkan aturan
pene#akan 8%" melalui proses le#islatif, seperti !an# terlihat dalam perde(atan aturan
memiliki pilihan (e(an perusahaan hi(ah kepada kar!a)an dalam laporan la(a
ru#i.6e#islative activities have reduced re#ulator! oversi#ht of ener#! companies, and
replaced old re#ulations )ith ne) sets of rules and procedures that are onl! tested later in
the real )orld, and sometimes found not to achieve the intended economic
conse@uences.* )onHt even raise the issue of campai#n contri(utions to the politicians (!
individuals and corporationsD
And finall!, ho) the %&R'& failure resulted must (e vie)ed in relation to the desires of
investors and financial institutions. *nvestors in the markets created conditions that meant
companies )hich appeared to (e J)innersK sa) rapid stock price increases, )hile Jpoor
performersK had plun#in# stock prices. Pressure on compan! mana#ement )as intense to
continue to (e seen as a J)innerK to drive prices hi#her for their stockholders. Risk
evaluation of stocks seemed to (e secondar! to investors relative to hi#her reported
earnin#s per share. *n addition, the (anks and securit! (rokera#e firms )anted to do
(usiness )ith %&R'& to #enerate profits <and perhaps individual annual (onuses for the
emplo!ees doin# the %&R'& deals= for their o)n shareholders. *t seems evident, (ased
on information concernin# %&R'&Hs 8P% activities, that the financial institutions
(enefited from the relationship, )hile the! took steps to reduce the risks of dealin# )ith
%&R'& throu#h separate side deals and #uarantees that )ere not full! understood (! or
revealed to the investin# pu(lic.
*n summar!, the %&R'& failure has not (een the result of -ust @uestiona(le activities (!
%&R'&Hs e+ecutive mana#ement team. $he cast of contri(utors to the failure and
(ankruptc! are (oth inside and outside the compan!. *tHs the total s!stem that resulted in
failure that needs to (e further understood and investi#ated.
A Proposal for the Academic "ommunit!
*f !ou the reader are still )ith me, * )ill no) endeavor to e+plain m! proposal for a
s!stematic stud! of %&R'&. *n an academic communit!, containin# the J(usiness t!pesK
and the Jli(eral studiesK, the %&R'& stor! need not (e -ust of interest to the J(usinessK
side. Les, the facult! of mana#ement, finance, accountin# and mana#ement information
s!stems can stud! %&R'& for insi#hts and lessons a(out ho) corporate value can (e
destro!ed, and )hat can (e learned to prevent similar situations. ut * see a (rid#e in the
%&R'& stor! )ith links to the li(eral studies in the areas of economics, #overnment,
human ps!cholo#! and le#al studies, at a minimum. ,! proposal is simpl! to esta(lish a
series of defined )orkshops to e+plore all the dimensions of the %&R'& failure, in order
to focus on the relevant issues and understand the s!stem in )hich an %&R'&3t!pe
situation can occur. $he (enefits can (e:
23
/.= to (rin# the t)o sides of the facult! to#ether to e+plore a common fascinatin# stor!,
2.= to provide a mechanism for sho)in# the students the multi3faceted operation of
(usiness mana#ement and li(eral studies disciplines in our societ!,
3.= as a means to potentiall! reach the )ider mem(ers of the academic and (usiness
communities interested in learnin# more a(out this fascinatin# and distur(in# failure of a
(usiness enterprise.
Possi(le topics for the seminars>research are as follo)s:
/. Accountin# for 8P%Hs and use of off3(alance sheet financin#. Facult! leaders from
Accountin# and Finance departments.
2. Anal!sis of common stock valuation and determination of de(t credit ratin#s after the
%&R'& e+perience. Facult! leaders from Finance department.
3. %valuation of corporate strate#! chan#es at %&R'& and its lessons. Facult! leaders
from ,ana#ement and usiness Polic!.
7. Arthur Andersen: ,ana#ement 8hills or *nvestor GuardiansE Facult! leaders from
Accountin#>Auditin# and Finance departments.
2. %valuation of "orporate Governance failures at %&R'& and possi(le improvements.
Facult! leaders from ,ana#ement and 'r#aniGation $heor!.
?. %+ploration of human factors, emplo!ee responsi(ilit! and individual ethics in
(usiness. Facult! leaders from ,ana#ement and Ps!cholo#! departments.
;. Government re#ulation of (usiness and corporate ta+ policies after the %&R'&
e+perience. Facult! leaders from %conomics and $a+ Accountin# departments.
1. $he role of the le#al s!stem in the post3%&R'& era. Facult! leaders from the 6e#al
8tudies department.
* hope that this endeavor mi#ht pi@ue !our interest and support.
R%F%R%&8*
/. &e) Lork $imes ne)spaper, various dates
2. :ashin#ton Post ne)spaper, various dates
3. 4ouston "hronicle ne)spaper, various dates
7. 8ecurities and %+chan#e "ommission, "ivil Action "omplaint &o. 43033007?,
,arch, 2003, 4ouston, $M
2.B Po)ers Report of the 8pecial *nvesti#atin# "ommitteeB, su(mitted to the oard of
Directors, %&R'& "orporation, Fe(ruar! /, 2002.
27