Economy: That Kenny Boy, He Sure Is Good People!
Poor Ken Lay. The media won’t give him a break; Congress is labeling him corrupt; since January he has been unemployed; and, according to his wife, he’s broke.
His wife, as they say in a local Houston Tex-Mex restaurant, is a few tacos short of a buffet platter. And Ken himself is not a wise man; or, as they say in the oil and energy-trading boardroom, he’s not the most flowing pipeline in the field. Boardrooms are funny.
But, by my calculator, the worst thing about Ken Lay is that before he took the Fifth, he was quoted using the phrase, “at the end of the day.”
At the end of the day, the most insidious phrase you will have heard is “at the end of the day.”
At the end of the day, what really matters is that people who say “at the end of the day” are usually trying to justify all the moronic and nefarious activities they have done throughout the day, so that when they get to it, they can say, “I’m doing what really matters, at the end of the day.”
Let us take a look at Enron. Everyone but the executives was financially shortchanged at the end of the day. Actually everyone was being violated all day long, but only came to realize it in December 2001. Even whistleblower Sharon Watkins says Kenny Boy was not able to comprehend what his own company was doing. She stated on Capital Hill that, “He didn’t get it,” and I misquote, that “he’s as dumb as a bag of hammers.”
But are we supposed to believe that Ken Lay, the CEO and Chairman of the Board, is just now finding out what his company was doing by sitting in his thirteen-million-dollar home and reading the Houston Chronicle? He must be as shocked as Arthur Andersen. Was he really so dim that he sold his stock for only a hundred-million dollar net profit (in 2001 alone), when even by his own constant admission, the stock was under-valued? If he had been a rube, wouldn’t he, following his own projections, still own all that stock today?
Yes, he would. And so would Andy Fastow, and Jeffy Skilling. But instead, being fence posts, they sold it back to Enron, who then counted it as a loss.
But let’s be real, in hindsight this was more than foresight. Kenny Boy needed the money to pay (read pay-off) the then-Governor of Texas, and the now-President of the United States. He also had to pay off two-thirds of Congress, Arthur Andersen, and the (not-yet then) Attorney General. Kenny and the other Enron boys had a hefty Austin and D.C. payroll to keep off-balance. They gave money to energy lobby groups and political action groups and even Boy Scout groups on a tour of the White House. And that was money that they could have kept in good, strong Enron stock.
And now Ken Lay is poor. He can only afford to eat boxed macaroni and cheese, with $200 million ketchup. And he has no friends. He sits in his room alone (with his team of $600 per-hour lawyers), and sings karaoke versions of “(Money) Can’t Buy Me Love.” Even the president of the United States, who got a half-million dollars from Kenny Boy and company, says about Mr. Lay, “Met the man a few times. Didn’t discuss his business. I think he contributed to my opponent.” That must hurt.
But money is a drug, and according to Congress it acts like any other slippery slope. For politicians everything is a slippery slope. For the rest of us, everything is not always a slippery slope. Kissing does not always lead to sex. Believe me, I have a mountain of anecdotal evidence from my time as a teenage boy. And I have many friends who have smoked marijuana or who enjoy two glasses of wine with dinner, who are not falling down a slippery slope to heroin and homelessness and crime. Maybe it’s the politicians who just cannot control themselves, which explains why they make it their cause to control us.
The slippery slope here is the one slid down by politicians and deregulation and Enron and its auditors and lawyers, who phrase it something like this: “Policy of ‘Off-Balance’ transactions is as follows: Whereas it is illegal for the company, Enron, to own more than 97 percent of another company, it is not illegal for the company, Enron, to create two ‘paper’ LLCs. And it is not illegal for those two fake companies to co-own a third, and then for that third to co-own a fourth with one of the original two. Once established, moreover, it is approved that Company Four may then sell its outrageously overvalued future worth to a fictitious offshore investment group, and then for that investment group to subsequently put all its money in the company, Enron. Insomuch as the off-balance books may record a serious loss, these books should never be seen, allowing the company, Enron, to make 100 million dollars (so it may buy back stock originally given to Ken Lay for free). Hereto wit, Arthur Andersen will legitimatize aforementioned business scheme so it may happen again, and again. [Note to David Duncan at Andersen: This is to be done with strict adherence to company shredding policies. PS, you’re fired.]
See, poor Ken Lay? Bad things happen to good people. It makes me cringe like I did the other day when I was on the train (DC Metro) and I heard a woman in a tan overcoat telling a story to a co-worker:
woman in tan overcoat: “You know Kenny?”
woman in dark blue overcoat: “Yeah, sure.”
woman in tan overcoat: “Yeah, you know Kenny. Apparently he got so looped last Saturday he drove up on Sharon’s lawn, ran over her mailbox, and flattened her Chinese maple.” (I assumed this was NOT Kenny Boy Lay.)
woman in dark blue overcoat: “Really? Are you mad?”
woman in tan overcoat: “No, not really. He’s good people.”
What? I hate that saying. He’s not good people. He’s a lawn-ruining, mailbox-destroying, imported-tree-killing drunk. Similarly, his namesake, Kenny Boy, is not good people. He and Skilling and Fastow and other company executives are, to use the President’s words, full-blown malicious evildoers who have committed crimes against America and Americans, and who should be prosecuted by a military tribunal.
Sure, send Kenny Boy, Andy Boy and Jeffy Boy to Camp X-Ray, and see if anyone complains that they are not being treated under the guidelines of the Geneva Convention. No one would complain. “Leave them there to rot.” “God love ‘em.” Which, in context, usually means, “God don’t love ‘em,” because most people who use this phrase are hypocrites, God love ‘em.
A few weeks ago, my friend Joe got me laughing, God love ‘em.
“What kind of government do we have if the Attorney General has to be recusant in the Enron case for blatant impropriety?”
“God love ‘em.”
“But doesn’t anyone see the link between Enron’s abuse of its employees’ 401(K) pension plan and the proposal for private investing of Social Security money? Yeah, and why don’t we put Arthur Andersen in charge of it and call it Social Insecurity.”
“God love ‘em.”
“And how did Congress get on such a high horse with Enron. It’s like the pot calling the kettle black. And Global Crossing, the fourth-biggest bankruptcy, and all the so-called profits made from their fake dealings with other bandwidth providers (approved again by Andersen), and who knows what else. I mean step back a second and I think you’ll have to say that all the crazy talk Ralph Nader was spewing about corporate responsibility was not so crazy now, was it? Who and when and where are people going to start talking about that? Huh? What do you say to that?”
“Well, God love ‘em.”
But Joe’s right. Enron(s) come(s) and go(es). And although it’s the biggest bankruptcy in American history, 99.99 percent of Americans are not directly affected. (And for those who are, God love ‘em.)
There’s nothing we can do about it? Or is there? Actually, I have a plan for an even bigger bankruptcy. This plan not only puts roughly five million dollars in your pocket, but also puts, say roughly five million dollars in the pockets of all your friends.
Enron’s mission statement is, “Enron’s business is to create value and opportunity for your business.” My plan is simpler: “My business is to make money for your business which is to make money for my business.” Here goes:
- Each of us started our company. A legal company. You can do it for 50 bucks.
- I will get the ball rolling by investing 50 bucks in my company. My books then show my company value at 50 dollars. Then my company will borrow 50 dollars from the bank using my company value as collateral. Which gives my company 100 dollars.
- Then my company will invest my 100 dollars in my friend Joe’s company as a “capital investment,” to which Joe’s company offers me a share of his company, God love ‘em.
- Joe’s company, with its value at 100 dollars (and no debt) goes to the bank and borrows 100 dollars. He offers as collateral 100 shares of his stock valued at one dollar a share. A clean, simple, legal transaction.
- Then Joe’s company invests its 200 dollars in your company.
- You borrow against the value of your company and then you invest 400 dollars in your best friend’s company. 7,8,9... 400 becomes 800 becomes 1600 becomes 3200 becomes 6400 becomes 12,800… simply carry this out twenty times and you get roughly 100 million dollars.
There are some other attractive features of my proposition:
Expandability: Many businesses can be started at once. I say we shoot for about ten thousand of these rackets going. Each racket is worth roughly 100 million. Total racket: $1,000,000,000,000.00. That’s right, One Trillion Dollars. But the math stays the same, with 200 thousand companies involved: we split the one trillion equally between all 200 thousand companies, each company receiving roughly five million dollars.
Exit strategy: As Chair of the Board of our/your own company, you pay yourself roughly five million dollars in consulting fees. Then, on the same day, all of your companies file bankruptcy—the biggest bankruptcy in American history.
Fallout: Don’t worry about the fallout of your own credit rating. First, you’d have roughly five million legal dollars. And second, as any Enron executive will tell you, if your company goes bankrupt, it does not affect our personal wealth. You simply claim you never saw it coming. You bathe in our roughly five million dollars, travel around the world, own five percent of the Yankees (or eighty percent of the Padres), and you have Ken Lay’s wife go on national TV to say she feels your pain.
Like Kenny Boy and his buddies, we all become poor, broken millionaires. Maybe we’re not the sharpest tools in the shed, but we’re laughing all the way to the bank.
Last Sunday I was reading an article about all the ways that Enron lied, Andersen agreed, and the politicians who got paid to look the other way now claim they were not influenced by money. I flipped the page down only to find a picture of Ken Lay, his brow furrowed with concern. I showed it to my wife.
“Can you believe that guy?” I asked.
“At the end of the day,” she replied, “he’s on a slippery slope, but God love ‘em, he’s good people.”