Newspaper Article

If you think these guys are bad ..., Yes, Enron's Lay and Skilling are crooks, but they're not the worst corporate criminals in American history

JOHN STEELE GORDON. John Steele Gordon is a columnist for American Heritage magazine and the author of "The Business of America."illustration by joe rocco

2006

Overview

These were just plain crooks, bent only on their own profit and the company be damned. The Enron ship of crooks was, unbeknownst to the public (or the Securities and Exchange Commission and assorted other regulatory bodies, of course), a sinking one. And [Ken Lay], [Jeffrey Skilling] and their accomplices, while certainly trying to save themselves, were also trying to save the company with ever more inventive schemes to reverse its declining fortunes. [Samuel Insull]'s corporate architecture was a pyramid of holding companies, each level controlling the one below it with only a majority of stock, much of it financed with borrowed money. As long as prosperity continued, all was well as dividends flowed up the chain and paid the interest on the bonds, which Insull had marketed as a safe, secure investment, suitable for widows and orphans, not to mention his employees and customers. He was indicted for mail fraud, embezzlement and conspiracy. But the government used Insull's books as evidence against him, and the jury could find nothing wrong with them. The first trial took seven weeks. The jury acquitted Insull in five minutes flat, but waited two hours for propriety's sake before announcing the verdict. There were two more trials and two more acquittals before the government stopped harassing a broken man who was guilty only of bad business judgment.

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