How Enron Became the Most Scandalous Blockbuster in the Us History

And the Oscar goes to...

How Enron became the most scandalous blockbuster in the US history

There is nothing I can do about it: the whole Enron scandal, all the shocking events and unexpected facts about it look like a thrilling, enormously expensive Hollywood movie.

The scenario is a blast: there are genuine heroes, dark villains, and honest detectives, trying to find any clues to figure out who is the one to blame here. There are also several shocking scenes with dirty Washington politicians and congressmen, buying new cupboards to hide their skeletons. And the most important thing to make a movie successful: money; tones, mountains of money.

The Biggest Bankruptcy Ever

Six Senate Committees, two Committees of the House of Representatives, State Security Committee, Ministry of Labor, Attorney General's Office - that's what it took to investigate the whole 'Enron' case.

Enron, which was #7 on the list of the biggest world corporations, was found bankrupt as for 2 November 2001. The loss of positions in the rankings as much as huge debt shattered the trust of the investors and creditors. The price per share dropped from $90.56 in August to $0.26 in November 2000, which equaled the price of a postal stamp.

This was not only about the unbelievable debt of $638 billion. The matter is that in October 2000 the bills of the company were aired. As it turned out Enron hid all of these huge losses in its subsidiary companies (Enron had about 3000 of those), one third of which were offshore. It helped to avoid taxation and distract the attention of the government. Enron managers didn't even try to hide it all properly. All of the fake subsidiary companies usually have very solid names and imagery. 'Enron' was pretty cynical in that respect naming them 'Star Trek' or 'Galaxy 9'.

However, all of the violations, losses and astronomical debts of the company was only the top of the iceberg. Creditors were not the only ones shamelessly robbed by Enron. The company's artistic manipulation with financial statements reflected on its employees and shareholders to a much larger extent.

Everything happens for a reason

There are many reasons of the Enron collapse. Some them are the conflict of interest between the two roles in this blockbuster played by Arthur Andersen, an auditor and a consultant of Enron; the lack of interest shown by members of the Enron board of directors to the off-books financial entities with which Enron did business; and the lack of truthfulness by management about the state of the company and its operations. In some ways, the corporate culture of Enron was the paramount reason of the collapse. The senior executives wanted Enron had to be the best at everything it did and that they had to protect their reputations and their compensation as the most successful executives in the U.S. When some of their business and trading ventures began to perform poorly, they tried