Cloning Enron: Propagating Economic Collapse
THE CLONING OF ENRON:
by Carolyn Baker
“ENRON: The Smartest Guys In The Room”, a film by Bethany McLean and Peter Elkind (http://www.imdb.com/title/tt0413845/) is a jaw-dropping, mind-altering expose of Enron’s scandal-induced demise, guaranteed to astound its viewers—unless they have been informed by the investigative journalism of From The Wilderness and the research of Catherine Austin Fitts’ at www.solari.com .
As one of the fortunate fans of FTW and the Solari model, I gleaned from McLean and Elkind’s movie not new information, but an untarnished lens that removed all lingering illusions that the Enron outrage was unique—a distinctly “bad apple” among a handful of examples of corporate criminality, a so-called isolated incident. Readers of Mike Ruppert and Catherine Austin Fitts are blessed with an economic map, embellished by McLean and Elkind, which confirms, as Fitts writes, that Enron is the ultimate “business model” (http://www.scoop.co.nz/stories/HL0203/S00066.htm) for financing not only the Bush Administration, but the economy of the United States itself.
It is now painfully obvious that the preponderance of U.S. corporations, the federal government and state and local governments have adopted the Enron template for destroying the prosperity of the nation and its citizens. For what purpose? Mike Ruppert answered the question superbly in his 2003 article “Eating The Chosen People” and reiterated it in Crossing The Rubicon:
“The truth is that the abundance enjoyed by the American people for two centuries must be utterly destroyed if the Empire is to survive. Few will be prepared for how far that destruction has already progressed and fewer still will even think of preparing before the disaster arrives.”
In other words, as the title of Ruppert’s article so poignantly suggests, the bankruptcy of companies, the skyrocketing of the federal deficit, the neglect and decay of infrastructure, the disappearance of 401K’s and pension funds, the elimination of health insurance plans, and a host of other American economic nightmares, didn’t just “happen”. They are contrived, planned, and frighteningly intentional. The ruling elite “need” to eat us alive, and they are doing so.
As Ken Lay and Jeff Skilling, Chairman and CEO of Enron go to trial in the coming months, we are likely to see their hands slapped, maybe even see them incarcerated, but it is highly unlikely that anyone will connect the dots to a host of other crimes associated with the Enron debacle such as drug money laundering, billions of dollars missing from the Department of Housing and Urban Development (HUD), and the crime of the century, September 11. (http://www.solari.com/learn/articles_risk.htm).
It is also a virtual certainty that other key accomplices such as J.P. Morgan Chase, Citibank, and Merrill Lynch will not be prosecuted, nor will the trial illumine the pervasive adoption of the Enron template by both the public and private sector of the economy.
In a nutshell, the Enron model goes something like this:
- Nothing is as it seems.
- Anything is possible as a result of the unprecedented deregulation of business during the Bush II Administration and under Executive Orders during the Bush I Administration that facilitated the creation of Black Budgets. (http://www.scoop.co.nz/stories/HL0408/S00277.htm)
- Any and all rules can be manipulated.
- Profits are booked, not in real time or real money, but from “an idea’ using “mark-to-marketing” accounting. This is not unlike writing a check for $100 when one’s checking account is empty assuming that one is going to receive a deposit of $200 in the next few days, and even if the deposit doesn’t arrive then, it will “at some point”. Profits can be whatever one says they are, and one can book them on the “idea” of profits increasing in the future.
- In order to succeed, “creative accounting”, also known as book-cooking, is essential to facilitate the illusion of profits that actually do not exist; therefore, an accounting accomplice such as Arthur Andersen is absolutely necessary. It is additionally helpful to have other accomplices to loan billions to the sinking ship, knowing full well that it is sinking--accomplices like Chase, Citibank, and Merrill Lynch—anyone who will collude, and I would hasten to add that the true meaning of collusion is “the sharing of an illusion.”
- Actual debt and liabilities are hidden.
- CEO’s are paid some 400 times what employees are paid.
- The players know that their house of cards will collapse, but that is no liability. In fact, the sooner collapse happens, the more it serves their financial interests.
- Pension funds and 401K’s are looted and used to finance investments that will bring obscene rates of return for management while employees blithely assume that pension funds will be available when they need them. How does this happen? As Fortune’s Geoffery Colvin concludes:
Private employers, while required to account for their pensions, have played sophisticated games with the numbers -- all within the rules. For example, they can assume the pension fund increased in value when it actually declined. They can assume it will continue increasing in value at a rate that is almost certainly way too high. They can even jack up their reported profits based on that assumed, though nonexistent, increase in pension-fund value. ( http://money.cnn.com/2006/01/13/news/economy/pension_fortune/)
Increasingly, corporations and public sector entities lament that they can no longer afford to pay employee health insurance premiums due to the “skyrocketing costs of health care.” However, a January 21, 2006 article in Insider Magazine is particularly illuminating:
According to confidential sources, UnumProvident the nations largest disability and long term insurer is operating in a state of chaos while executives struggle to cash in their chips. Insider trading by the millions, exactly $144 Million according to the United States Securities and Exchange Commission Insider & Rule 144 transactions reported period February 2004 through January 04, 2006.
Insider Magazines in-depth investigation reveals a monster corporation with a "religious front" to hide away Billions siphoned from investors and policyholders. The Maclellan Foundation definitely has hooks into the Bush White House, IRS, federal courts and the U.S. Department of Labor and it may have received millions from U.S. government sponsored faith based initiatives explained in their " how to get taxpayer money Web site " - http://www.maclellan.net.
Recent corporate moves suggest the company to be quietly liquidating after raising additional capital from investors. Some investors have filed suit for fraud claiming that the company lied to them about soundness of financial statements and claims payments. After years of fending off thousands of lawsuits for bad faith and reckless disregard of medical facts involving denied claims the company recently agreed to reassess 215,000 claims federal and state regulators claim were wrongfully denied.
Is this why health care costs are exorbitant? Is UnumProvident just another “bad apple”? Is economic warfare on Americans really about greed and waste? The facts reveal a very different reality: The Enron model has been cloned innumerable times in virtually every private sector industry and in the public sector as well. To describe pandemic fraud as “greed and waste” is like saying that during Europe’s fourteenth-century Black Death, a few people got sick and died.
Moreover, as noted in the “Eating The Chosen People” article, a 2002 survey conducted by Financial Times revealed that “Top executives and directors of the biggest U.S. business collapses amassed billions in salary and share sales while the stock market was still booming.” (http://www.freerepublic.com/focus/news/724965/posts)
CEO salaries and bonuses have continued to soar since Enron folded, and those amounts currently average 431 times the salaries of other employees (http://www.faireconomy.org/press/2005/EE2005_pr.html).
What the Enron movie did not address was the issue of where the company obtained funds to actually maintain itself. It is one thing to book phony profits, but it is quite another to have a massive cash flow that also does not appear in the company’s accounting system. Catherine Austin Fitts has superbly documented her hypothesis that Enron was actually a slush fund deeply entangled with the Harvard Endowment, Dyncorp - one of the nation’s most powerful defense contractors, and international drug trafficking and money laundering. (http://www.faireconomy.org/press/2005/EE2005_pr.html)
Additionally, all of the Securities and Exchange Commission (SEC) records on Enron’s fraudulent trading were stored in the World Trade Center which was obliterated on September 11, 2001. To my knowledge, Fitts and Ruppert are the only individuals who have begun to connect all these dots. The Enron movie certainly did not.
Not only has the Enron model been replicated ad infinitum, inherent in it is the destruction of every facet of the entity it controls except for the personal profits of those at the top. Like a Category Five hurricane or an omnivorous King Kong, the Enron template purposefully obliterates every obstacle in its path and leaves whatever it touches in shambles. The players walk away with billions while workers and the environment are decimated, a syndrome which Catherine Austin Fitts calls “Tapeworm Economics.”
In the field of psychology, this behavior is called sociopathic, meaning that the Ken Lays and Jeff Skillings of the world have no conscience. The players assume that unless they destroy the “chosen people”, the empire will not survive. And they are right—All empires ultimately collapse, and the United States, as brilliantly documented in Crossing The Rubicon, is currently in the process of doing just that. But while it is true that empires are destined to fall off a cliff, few in human history have been intentionally “pushed” by their own ruling elite.
My research in recent years has proven to me that the most important thing I can do about the big picture is know it and know it well because if I really understand the cloned monster with which I’m dealing on a daily basis, I will not expect it to nurture me, provide for me, take care of me, or meet any of my needs. It is incapable of anything but destruction. On a smaller and local scale, I can join with those I trust and want to share my life with and help restructure our lives according the Solari model of economics that truly serves people and the ecosystems. (http://www.solari.com/opportunity.htm)
As we witness the unfolding of the Jack Abramoff scandal, which will continue throughout 2006 and beyond, we are likely to see a miniature configuration of the scandal’s tentacles and to whom they connect, but the subterranean root structure of corporate fraud and its host of accomplices in government will remain enshrouded in the smoke and mirror antics of Enron clones and massive denial on the part of the American public. Were that horror show unveiled, it would make Jack Abramoff look like an altar boy by comparison.
In the coming months, we are also likely to witness the bankruptcies of General Motors and Ford, followed by Daimler Chrysler. But not to worry, enter Citigroup with which Citibank is affiliated, riding in on its not-so-white horse, sweeping up the entire mess, and making billions off the Big Three’s imminent financial train wreck. (http://money.cnn.com/2006/01/28/news/companies/gmac.reut/index.htm) Given that Citibank is a documented drug money laundering institution (http://www.worldpress.org/Americas/1155.cfm) and given its ties with Enron, H.U.D., and Harvard Endowment, (http://www.scoop.co.nz/stories/HL0202/S00030.htm) the mind reels at the convoluted can of worms that Citigroups’s involvement with the American auto industry might entail—another possible instance of the Enron template gone berserk.
I currently teach in colleges in two different states. Six months ago I received a notice from the retirement system of one college attempting to dispel rumors that the system’s funds had vanished when actually they were “securely intact.” I smiled, fully aware that I was being lied to. Three months ago I received a similar letter from the retirement system of the other state in which I teach, echoing the deceptions of the first letter. As Peak Oil, global warming, and global economic collapse perpetrated by Enron clones bear down on my world and those I love, I expect nothing from the empire except its own demise and incessant attempts to devour me in the process. Meanwhile, I will create for myself and with others, as many options as possible for navigating the empire’s imminent collapse -- facilitated by “the smartest guys in the room.”
Mapping The Real Deal is a column on
Scoop supervised by Catherine Austin Fitts. Ms Fitts is the
President of Solari, Inc. http://www.solari.com/. Ms. Fitts is
the former Assistant Secretary of Housing-Federal Housing
Commissioner during the first Bush Administration, a former
managing director and member of the board of directors of
Dillon Read & Co. Inc. and President of The Hamilton