Subsidizing Enron

Over at Human Events, Timothy Carney argues that the U.S. government was an unindicted accomplice in the Enron fraud case. Here's one example:

The first specific charge in the federal indictment under which Skilling and Lay were convicted last month relates to the "Use of special purpose entities [SPEs]…to manipulate financial results." Specifically, the indictment discusses a bungled power-and-pipeline project in Cuiaba, Brazil -- a deal whereby Enron simultaneously hid large losses while enriching Fastow personally.

While the Cuiaba project was "straining to meet budget targets" in late 1999, the Overseas Private Investment Corporation (OPIC), a federal subsidy agency, extended a $200-million subsidy credit to Enron to help it build a pipeline to the plant.

Did I just blog pieces from In These Times and Human Events back to back? I suppose I did.

Whole thing here.

Comments

[SR]

I worked for a lawfirm which had a case in which OPIC's practices were an important issue in the litigation, and let me tell you, OPIC is an utterly corrupt entity that serves no purpose other than to funnel cheap loans and grants to the politically well-connected. But then, everyone here could probably have guessed that already.

[Warren]

the U.S. government was an unindicted accomplice in the Enron fraud case.

As if that anything to do with the price of tea in China. One word: tobacco.

[P Brooks]

"Use of special purpose entities [SPEs]...to manipulate financial results."

My suspicion, not buttressed by specific knowledge of the case, is that the genesis of "special purpose entities" is the tax code.

[Peter K.]

OPIC is an utterly corrupt entity that serves no purpose other than to funnel cheap loans and grants to the politically well-connected.

Often those who are "successful" in business are politcally well-connected. It's not what they teach you in school.

Enron was billed by the business press as a super-company, a wonder of the free market. Turned out it was run by a couple of crooks.