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These two sentences from

These two sentences from today's New York Times provide the telling summary of Enron's seemingly damning internal review.

Lawyers not involved in any [Enron-related] lawsuits said the report appeared to support an argument that Enron's directors did not recklessly or willfully participate in fraud. That is the conclusion the board, which appointed the investigators, might want a bankruptcy court to reach in deciding whether to leave the company under its control instead of naming a special trustee ...
This other article in the Times, by Kurt Eichenwald, paints a slightly different picture of the report, describing it as an effective road map to a number of indictments. But the key point here is not how damning the report is, but who it was damning of. The report squarely places the blame on key executives, not the board, even though such a distinction may be difficult to sustain given what we now know of the board's close involvement with Enron's inner-workings.

Also worth noting is the membership of Enron's investigating committee. Two of the members, William Powers Jr. and Raymond S. Troubh are new members of the Enron Board. They signed on after the current crisis was already underway. But the third, Herbert S. Winokur Jr., has been on the Board since at least 1986.

I'm wondering if Winokur's utility was as something on the order of an expert witness. So, for instance, when the authors of the report said that the board had "failed . . . in its oversight duties," perhaps Winokur was able to detail all the screw-ups he and fellow board members had been responsible for? It sounds like he could be really helpful with that.

I'm unclear on this. But maybe some TPM reader who's down with corporate management practices could help me out with this one?

If youd like your

If you'd like your Talking Points delivered live to your office TV, you're in luck. Talking Points will be pundit-in-residence from 1 PM to 6 PM EST Monday on MSNBC. You know the drill, one on the right, one on the left -- there to provide commentary as needed on Enron, the budget, and whatever else comes up during the afternoon news churn.

Im always amazed at

I'm always amazed at how these things work. Ken Lay was dead set on testifying tomorrow and setting the record straight. But this morning his lawyer Earl J. Silbert, watched the Sunday shows and saw that Reps and Senators really take a dim view of his client. And he "instructed Mr. Lay to withdraw his prior acceptance" of the congressional invitation.

Obviously, Ken Lay is just bustin' at the seams to get in that chair and clear things up. But the hyper-cautious Silbert won't let him. Lay is like the hothead spoiling for a fight whose friends keep holding him back, even as he flails his arms trying to get into the melee.

Lay must be giving Silbert an earful tonight: Don't hold me back! Don't hold me back! Lemme at 'em!

Another interesting factoid. As

Another interesting factoid.

As we noted earlier, Comdisco is another Fortune 500 company that managed to go into bankruptcy with a lot of stockholders' cash, but had execs and insiders who made out just fine.

Comdisco's CEO is Norman P. Blake, a 'turnaround' expert who took over the company early last year.

Blake is also on the board of Enron.

It turns out there's another similarity between Enron and Comdisco. They were both on the list of the sixteen corporations in line to get $100 million or more in rebates from the federal government if the House GOP stimulus bill went through.

Enron which was #7 on the Fortune 500, came in at #9 on the windfall list, in line for $254 million. Comdisco, which was #433 on the Fortune 500, came in at #13 on the windfall list and was in line for a check for $144 million.

If only they could have held on for the pay-off.

S-i-g-h.

Get set for the

Get set for the exciting Talking Points Memo relaunch, coming later this month. More details soon.

Company goes belly up.

Company goes belly up. Investors take a bath. Bigwigs had been cashing out for months and managed just fine.

Sound familiar? Enron?

No. But close. We're talking about Comdisco Inc., which went into bankruptcy last July.

Comdisco's CEO Norman P. Blake, Jr. sits on the Enron Board.

(For more details, see Crain's Chicago Business, July 23, 2001, p.6)

Just after George W.

Just after George W. Bush became president, many journalists were uttering a lament that transcended politics, ideology or government. President Bush was just going to be so boring.

Well, I mean, it's hard to match 1998 with the Lewinsky scandal, impeachment, the Balkan wars, and everything else. But President Bush is really giving Bubba a run for his money.

What do we have? The War on Terrorism, the return of structural deficits, and now a scandal that is spreading out through the administration like a splash of ink seeping into the fibers of a paper towel.

This article says the Justice Department has ordered the White House and the rest of the executive branch to preserve all documents that "relate in any way to Enron's financial condition and/or business interests."

It's worth noting that the order goes back to January 1st 1999 -- half way back into the second Clinton administration. No doubt the White House will note that. Unfortunately, for them, it doesn't matter.

This is the kind of announcement that gives press officers and political operatives cold sweats. Does this mean the Bush administration did anything wrong? Of course not. But it does mean that the Bush White House is now part of a criminal investigation. And it becomes very, very difficult for anyone at the White House to say this isn't a political scandal. Fair, or not.

Does Karl Rove and

Does Karl Rove and the White House media operation need some better liaison with the adobe-jockeys over at the Department of Energy? Seems like it to me. This pic on the right isn't some knock-off from cheneysucks.com. It's from the Department of Energy website!

A Vito Corleone-imitating picture of Dick Cheney with his head eerily incorporated into an oil derrick? This is on-message?

And I thought the Dems were the ones trying to portray Cheney as an ominous goon doing the bidding of the big oil producers. Maybe this is more complicated than I thought?

P.S. Special thanks to TPM reader MF for the catch.

We dont do reader

We don't do reader comments on TPM. But here we'll make an exception since this whole issue of pension fund management is such a complicated one.

Dear TPM: Your comments on Alliance Capital go beyond the realm of facts and into speculations that are unfair and not true. You ask if Alliance was buying Enron stock for the account of Florida and other clients while simultaneously selling for its own account. This is demonstrably not true, as Alliance, a money management firm, does not own stocks for its own account.

Having said that, buying Enron shares in October goes under the heading of an honest mistake. To really understand the impact of Enron on Florida or any other Alliance Capital client, you would need to know the performance of the portfolio they were managing. While Enron obviously hurt their performance, its the return of the whole portfolio that matters.

Your comments this morning are much closer to the mark.

-- Anonymous TPM Reader
(Who Works in the Money Management Field)

These are some good points. But as I say below, I still think Alliance has some real explaining to do. One point particularly seems worth making. For a company like Alliance it seems to me that there's an easy to make distinction between one of 'their' mutual funds (which are obviously made up of clients money) and pension funds like Florida's which they advise on what to buy and sell.

One other point, a number of readers have argued that it could never be rational for Alliance to have a client blow money on Enron late in the game because Alliance's reputation and profitability is completely tied up with their reputation for making their clients money, not losing it. True enough. But humans don't always work in such a mechanistic or logical way. More about this point soon.

A few readers have

A few readers have said I was terribly unfair to Jeb Bush for implying that he had some role in getting the Florida state pension fund to buy Enron stock as it slid into oblivion last Fall.

This surprised me because I didn't say that, or even imply it.

Here's what I said ...

One of the three trustees of the Florida pension fund is Governor Jeb Bush. But there is as yet no evidence that he acted as anything more than a passive overseer. The actual decision-making was coming from the private company managing the state's money.
That sounds pretty straightforward to me. How 'bout you? In fact, my reason for mentioning Bush was to make the point that though he was a fiduciary of the fund, and thus had some legal responsibility for its management, he didn't seem to have actually made any of the decisions about which stocks were bought.

In any case, some thought I was trying to accuse him or perhaps accomplish the same through innuendo (perhaps because of the ordering of the paragraphs?). So let me say for the record that I wasn't. I've seen no evidence that Bush took any role in choosing which stocks were purchased.

A few readers have also said I'm being unfair to Alliance Capital. To them my response is quite different. We don't know Alliance did anything more than make a bad call in getting Florida to load up on Enron as the company was being exposed as a money-loser and a book-cooker. But as far as I'm concerned they have a lot of explaining to do.

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