Cronyism at it's finest.
How to set up a house of cards and run all the way to the bank.
Even Republicans say the tactics used are similiar to the Saving and Loans scandals of the 80's.
(We didn't catch them then.....they were all excused or pardoned and WE paid for the bail-out while the head honchos kept all the money in their accounts).
Are we going to let them get away with it again.....this time under Executive priviledge?
("How DARE you want to see my books?? Shred Martha...shred!")

From the Center of Public Integrity:

Members of Congress, who have been investigating the Enron debacle, made it clear yesterday that what they are seeing now appears to fall within the realm of a criminal conspiracy.

"We're finding what may clearly be securities fraud," Representative Billy Tauzin, Republican of Louisiana and chairman of the House Energy and Commerce Committee, said on NBC's "Meet the Press."

Most criminal fraud prosecutions must show that participants had some financial motive to participate in an illegal scheme, and in this instance, former prosecutors said, there are plenty of examples of such benefits. Enron insiders received millions of dollars in undisclosed compensation from their dealings with the partnerships; Mr. Fastow alone, whose spokesman has declined comment, received at least $30 million from his partnership dealings.

An array of other insiders received huge sums in a deal offered to them by Mr. Fastow and another executive, Michael J. Kopper, who declined to be interviewed by the committee. Two participants in the deal earned about $1 million in profits in just two months from an investment of $5,800 each, the report said.

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I JUST HAVE TO INTERJECT HERE.........SINCE WHEN WAS "INVESTING" REALLY THIS GOOD??
Lindy

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"The magnitude of these returns raise serious questions as to why Fastow and Kopper offered these investments to the other employees," the report said.

Ultimately, if the report proves correct that profits were improperly manipulated, the range of charges that would be under consideration are the standard mix for corporate frauds, according to former federal prosecutors. They include, at their base, securities fraud from the filing of false information regarding corporate profits with the Securities and Exchange Commission. Those, in turn, lead to charges of mail fraud and wire fraud relating to the transmission of that information, both to the S.E.C. and to the investing public.

Despite the dozens of people involved in the transactions, the report describes an atmosphere of compartmentalized information, where few people understood the full scope of anything that was going on.

Employees had little understanding of their roles and responsibilities in the transactions; in one particularly stunning passage, the report describes how an executive who negotiated a deal with Enron on behalf of one of the partnerships believed that, instead, she was acting on behalf of the energy company.

But, for investigators, the most damning information relates to the repeated instances in which the company engaged in transactions that served no purpose other than to inflate the earnings Enron reported to investors and the public.

Indeed, the portrait painted by the report is one of a corporation where facts were fungible, capable of being massaged and manipulated to create whatever outcome most benefited the executives involved. It describes, for example, transactions with backdated documentation, done for the apparent purpose of taking advantage of a high price in a stock that was at foundation of the deal. By the time the deal was actually done, the price of the stock had fallen dramatically, but Enron was able to book millions more in profit by simply pretending that the transaction had taken place weeks before it did.

Repeatedly, the report said, there were transactions in which Enron sold an asset to a partnership near the end of an accounting period, only to buy them back later after profits had been booked. The partnership involved in those transactions never lost money on any deal, the report said, even when the value of the asset being bought and sold had declined. Indeed, the report said, there are suggestions that Enron guaranteed the partnerships involved against loss.

Ultimately, certain transactions were simply bogus, the report concluded. For example, the most complex series of transactions involve a group of four partnerships known as Raptor I-IV. Purportedly, the transactions were designed to allow Enron to hedge certain investments it made ‹ transactions in which the risk of an investment is shared with another party for the purpose of minimizing potential losses. But in truth, the report said, the Raptor transactions were simply a complex group of partnerships controlled by Enron, used as a secret dumpsite where troubled Enron businesses ‹ and the poor financials that accompanied them ‹ could be hidden.

Even worse, the report concluded, is the potential that, since Enron was essentially on both sides of each deal, the transactions were merely an illusion.

"The fundamental flaw in these transactions is not that the price was too low, the report said. "Instead, as a matter of economic substance, it is not clear that anything was really being bought or sold."

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)