Category Archives: PERSUASION

Defined as a “process aimed at changing a person’s (or group’s) attitude or behavior toward some event, idea, object, or other person(s), by using written or spoken words  . . . Under our PERSUASION theme, we explore aspects of persuasion in film.

Enron Trials: Mueller and Weissman in a Frenzied Witch Hunt

General Michael Flynn, former National Security Advisor to President Donald Trump, has every reason to be sweating bullets at present. After pleading guilty to lying to the FBI about Russian contacts, General Flynn is at the mercy of Special Counsel Robert Mueller and his team of investigators. In addition to Flynn, three other henchmen of President Trump’s are in hot water relating to the investigation over Russian interference in the 2016 Presidential Election:

  • Paul Manafort, Campaign Chairman
  • Ricky Gates, General Flynn’s assistant
  • George Papadopoulos, Campaign Foreign Policy Advisor

Andrew Fastow, the former CFO of Enron shown in this month’s movie, might strongly empathize with these men for he was once in their same distressing situation. At the time of Enron’s catastrophe, Robert Mueller was Director of the FBI, and led the investigation of all things unscrupulous about Enron. Mueller hired a top prosecutor named Andrew Weissmann, whose hardball tactics had earned him the moniker of “pit bull” (Guttman, 2017).

By indicting Andrew Fastow’s wife, Lea, Weissmann not only got Enron’s CFO to talk, but to sing. Quote Harvard professor and renowned lawyer, Alan Dershowitz (Roberts, 2004).

Andrew Fastow is being taught not only to sing but also to compose. To keep his wife out of prison, Fastow will now give the prosecutors whatever testimony they want against his bosses.

Robert Mueller took the leash off this “pitbull” and Weissman went wild with his Enron Task Force. Over 30 Enron employees were under a multifaceted investigation that included other organizations that had done business with Enron. The accounting firm Arthur Andersen & Co, Enron’s auditors, underwent an astounding collapse as approximately 90,000 employees, 99% of them innocent, were practically abandoned (“Reversed and remanded”, 2005).¹ The Enron Task Force also went after Merrill Lynch and CIBC for their transactions with Enron. Weissman encouraged the strategy of throwing multiple charges at the Enron defendants in hopes that a few would stick (Flegenheimer, 2017).

‘It’s pretty clear that Weissmann created a culture in which they presumed that the people they were investigating were guilty,’ said Tom Kirkendall, a Houston defense lawyer who represented clients on Enron-related cases.

Every Enron employee, who had, or was thought to have insight about the company’s dealings, secured a lawyer for protection from the frenzied witch hunt that descended upon Houston. These people witnessed abuse and intimidation that left them more than disenchanted with America’s Justice Department. Now that the statute of limitations has past, and the Enron Task Force is disbanded, these former employees of Enron are presenting their side of the story on a website.  I found this information to be valid, startling, and deeply disturbing.

Mike S. McConnell, formerly Enron’s Head of Global Marketing, shared his upfront experience with the aggressiveness of Enron’s prosecutors and the Justice Department. While McConnell escaped the grasps of the Enron Task Force, his friend Kevin Howard, former CFO of Enron’s Broadband Service, unfortunately did not–despite doing nothing wrong. Below is an excerpt of McConnell’s book, Just Because You Can Doesn’t Mean You Should (McConnell, 2007, pp 88-90), and it includes Mike Krautz, another former executive at Enron’s Broadband unit. [Referring to the first trial for Kevin Howard and Mike Krautz]

Although they [Justice Department] had not been able to get a single guilty verdict in the first trial, they were off trying again. The prosecution changed its strategy and made the case more about character and the so-called ‘bad’ people of Enron rather an illegal transaction. I testified in the trial. I felt compelled to do so. It was a very scary thing to do. I had spent five years off the radar screen of the entire process, but I was going to intentionally walk back in and put some focus on me. I lost a lot of sleep over this decision, but I knew I was doing the right thing…. After several days of being on call to testify, the day finally arrived to go down and do it….

Jeffrey Skilling, former Enron CEO
Jeffrey Skilling, former Enron CEO

The case was still moving very slowly, and we had to wait for several hours in a small conference room before finally going in at 4 p.m. Just before we entered the little waiting room for the court, Ken Lay and Jeff Skilling walked by as they returned from lunch to their trial, which was right next door!…After a quick conversation with all in their family, they both thanked me for testifying for Kevin because they were angry that he had been dragged into this mess. . . . I wasn’t on the stand very long and was able to make the points I really wanted to make. It certainly wasn’t easy to do, though. The prosecutor interrupted me at every question, literally. He was extremely arrogant, and the judge actually overruled him every time. I learned just how ugly the process actually is. It’s not about justice at all but about winning at any cost. In fact, as I was waiting my turn on the witness stand, two FBI agents approached me and acted as if we were old friends. They actually offered me advice. I saw this for what it was – an attempt to get inside my head and make me believe they were watching me.

I was in Austin on May 30 when Kevin Howard’s verdict came in and he was convicted on all five counts. Earlier in the year he got a hung jury and thus was ‘not guilty’ on 20 counts. Mike Krautz, the accountant with him, was acquitted; thank God for that. I didn’t know him very well, but everyone liked him and believed he was a tragic victim of the witch hunt. Kevin is a wonderful man and faced going to jail for most of the rest of his life. This was a travesty, a total travesty. This shouldn’t happen in America. Juries should not be able to make such a big mistake. They shouldn’t put someone in jail because he made some money and used to work at Enron. Chris [McConnell’s wife] then reminded me that juries are just people and that 60 million people watch American Idol. There are more votes cast for a reality show contestant than for President of the United States. My reaction was that it’s difficult to be proud to be an American under these circumstances. It just isn’t right.

The emails had begun. Terry, Kevin’s assistant and my old assistant Cathy were crying while typing what they were feeling and thinking. I sent Kevin an email, telling him how sorry I was and, incredibly, I got an e-mail back from him. He consoled me and told me to hang in there and to keep the faith in God…. Again, Kevin emphasized to keep faith in God and this was part of his plan; we just didn’t understand his long-term plan. How could he feel that way? The decision devastated me, but the person who was going to jail was at peace with it, at least for the moment.

Kevin told me he planned to file an appeal, but there was a major problem: he had no money and was deep in debt. The trial had wiped him out and he was on the verge of being unable to pay his bills or even keep his family in their house – never mind paying another appellate lawyer. As Kevin dealt with these realities, the first of two miracles happened. Jeff McMahon [former Enron CFO who had replaced Andrew Fastow as the company was going downhill]…started a fund for people to contribute money to help Kevin and his family. The fund was set up to allow $10,000. per individual contribution. The donations came pouring in. Each time I received an update from Jeff, I would actually giggle aloud, so many people were stepping up. Chris and I contributed as well after some serious discussions about how much we could give. It was the biggest single donation we had ever made, outside of church. It meant we would not take a vacation this year, among other cutbacks, but it was the right thing to do. The kids understood as best they could, but I know it was difficult for them. And, we soon found out we were not the only ones to stretch our limits: the fund ultimately surpassed $240,000. Think about that. People contributed $240,000. to help a man who had been convicted of a felony. What an inspirational life lesson and testament to the character of Kevin. Thank God for Jeff and his commitment and for everyone else who stepped up to help. Kevin was able to hire the right appellate lawyer, who actually cut his fee in half because he believed the conviction as a travesty of justice…

On the legal front, good news was developing. Kevin’s appeal had gained momentum and the prosecution supported a sentencing delay. This was a positive sign about the outcome of his appeal, and it would get even better. The judge vacated all of the five convictions. Dropped convictions! That simply does not happen. All that we had said and believed about the guilty verdicts having been a travesty was bearing out. All our prayers for real justice were paying off….

(Note: Jeff McMahon was not charged with any crimes, yet paid $300,000. to settle civil allegations, and to put the Enron matter behind him once and for all.)

Robert Mueller
Robert Mueller (REUTERS/Joshua Roberts)

Now, this Mueller-Weissman duo is back together. Instead of a corporation and its executives, their target is one single man: President Donald Trump. Their investigation is whether he and his campaign colluded with Russia in the 2016 presidential election. It got ugly with a FBI pre-dawn raid on Paul Manafort’s house in July 2017. Alan Dershowitz chimed in once more,

Manafort now is the first domino, and what Mueller wants to do is see him as the first domino, the second domino, the third domino, ultimately trying to get to the big domino, which is President Trump . . . If Manafort has nothing to offer to assist Mueller’s larger investigation, then he’s going to twist in the wind.

President Trump is fighting back via Twitter highlighting anti-Trump bias in the midst of Mueller’s investigations. This is not unfounded as an FBI agent was recently suspended from Mueller’s team over anti-Trump texts. Donald Trump, though surrounded by a team of lawyers, is not afraid to take the fight to Mueller and Weissmann in the bull ring. The only thing a bully understands is another bully.

Frankly, I can’t think of two people who deserve each other more than Andrew Weissmann and Donald Trump,” Daniel Codgell, A Houston attorney who battled Weissman over the sprawling Enron fraud case told The New York Times (Guttmann, 2017).

A great number of Americans hate President Trump with an unprecedented vengeance. The source of this nationwide loathing has to go beyond Trump’s sordid reputation as a misogynist, and his notoriety for being arrogant, incompetent, egotistical, and ignorant. Truth be told, Donald Trump is not unlike past Presidents in these undesirable qualities. What appears to elevate Trump above the others in America’s contempt is that he is an outsider. While this is precisely the reason roughly half of America, by Electoral College, voted him into the Oval Office, it appears to make the other half feel most uncomfortable in a world that has been dominated by the Establishment.

Both Republicans and Democrats make up the Establishment, and they strive to appear to represent all of America when in reality they are in it to enrich themselves and to keep their political parties in power. Our current documentary, Enron: Smartest Guys in the Room, portrays President George W. Bush as being in cahoots with Enron’s CEO Kenneth Lay. I have no doubt that the Bush administration could have conveniently turned the other head to Enron’s vices. However, I do wish the documentary makers had also included the Clinton Administration’s significant associations with Enron. In an article titled, “Enron Movie Misses Hillary’s Role in the Scandal,” American author Jack Cashill details the Clinton Administration’s active support of Enron’s reckless investments overseas, all in the name of making money (2005).

When it comes to enabling Enron, it appears that neither the Clinton nor the Bush Administration can take the moral high ground. The San Francisco Chronicle reported in 2002,

Enron’s tentacles ran so deep into Washington’s political establishment that 71 sitting senators and nearly half of the current House of Representatives received Enron money during the last decade, including some who are now investigating the company’s bankruptcy.

To cover their bases, Kenneth Lay and Enron contributed to both parties, and all levels of government.

The company also was generous with state and local candidates from both major political parties. Its tentacles were wrapped around high-profile figures in several administrations. (The Hartford Courant.)

Half of America was fed up with the swamp of political elites, their diffusion of responsibility, and their growing distance from the majority of America , hence the upsurgence of Donald Trump. The political Establishment, knocked off its pedestal, is doing everything it can to regain power. Robert Mueller, a Republican, and Andrew Weissmann, a donor to President Obama’s campaigns, are united to take down President Donald Trump. Andrew Weissmann is no doubt strategizing on how to use the pawn that General Michael Flynn represents to declare “checkmate.” Andrew Fastow, now out of jail and voluntarily researching legal documents and giving talks on corporate fraud, is likely empathizing from a helpless position.

Footnote

¹ Quotes below from an article published in the Economist regarding the role of Arthur Andersen & Co in the Enron case (“Reversed and remanded”, 2005),

The 89-year-old firm was convicted in June 2002 by a Houston jury of obstructing justice by shredding tons of documents and destroying e-mails related to its client, Enron, just before the energy-trading giant abruptly went bankrupt the previous autumn when questions were raised about its financial statements. . . .

On May 31, 2005, the US Supreme Court, in a unanimous decision overturned the firm’s conviction. . . .

Nevertheless, there are two important lessons to be drawn from Andersen’s legal travails. First, prosecutors in the case overreached in persuading the judge to dilute the jury instructions. The Supreme Court rightly wants all convictions to meet the same standard: defendants should be found guilty only if the jury believes that they knew they were committing a crime. In white-collar cases, this can be difficult to prove, but not impossible. Prosecutors must aim to meet this standard in the upcoming trials of Enron executives and others. Second, prosecutors should reserve the criminal prosecution of service firms such as accountants, banks and insurance firms, which depend on government licenses to stay in business, to only the most egregious cases. After all, the SEC and other agencies already have a powerful sanction in civil lawsuits. Even in Andersen’s case, it would have been better to confine any criminal charges to individuals, rather than to destroy the livelihood of thousands of innocent employees.

REFERENCES

Cashill, J. (2005). Enron movie misses Hillary’s role in scandal. World Net Daily. Retrieved from http://www.wnd.com/2005/05/30397/

Flegenheimer, M. (2017). Andrew Weissmann, Mueller’s Legal Pit Bull. The New York Times. Retrieved from https://www.nytimes.com/2017/10/31/us/politics/andrew-weissmann-mueller.html

Guttman, N. (2017). Meet Andrew Weissman, Mueller’s ‘Pit Bull’ Lawyer. The Forward. Retrieved from https://forward.com/fast-forward/386697/meet-andrew-weissman-muellers-pit-bull-lawyer

McConnell, M. (2007). Just because you can doesn’t mean you should. Lincoln, Neb.: iUniverse.

Reversed and remanded: The Supreme Court’s quashing of the accounting firm’s conviction sends an important signal. (2005). The Economist. Retrieved from http://www.economist.com/node/4033351

Roberts, P. (2004). Fake crimes. Lew Rockwell. Retrieved from https://www.lewrockwell.com/2004/02/paul-craig-roberts/martha-stewart-tried-for-fake-crimes/

Injustice at Enron’s Bankruptcy and AA&Co Demise: The roles of Michael Chertoff and Sherron Watkins

The collapse of Enron and the conviction of its accounting firm, Arthur Andersen, mark a critical juncture in American business and political life. Not only the accounting profession but corporate America as a whole—and those charged with regulating it—must now confront what has been learned, what is at stake, and what can and should be done to restore public confidence in the integrity of the markets.
—Bigger than Enron, Frontline 2002

Do we even remember the rise and fall of the Enron Corporation very clearly? After all, a new generation has emerged since the company’s December 2, 2001 bankruptcy. And, noting the date, did some simply discard that news, since we were then, and are still, adjusting to the devastation resulting from the bombing of the World Trade Center towers?

Enron trademark
Enron trademark, positioned in front of Enron’s Houston Headquarters

We can compare the two events in time, but maybe very little else to compare otherwise. Of course, the collapse of Enron was earth-shaking to many people around the world who had invested in the company and had faith in its positive pronouncements; and it was earth-shaking to others who had benefited from its philanthropic largesse. However, were lives lost?  Were there lasting injuries? Unfortunately, we must answer “Yes” to both.

Further, in both incidents, the fallout in America was a loss of faith in our fellow man. Before these events, many citizens carried an image in their minds of US defenses as impenetrable, and of US regulatory and justice systems dependably watching over to ensure safety and fairness. All of these systems failed. If we can take anything away from these catastrophes that benefits us, it is a better understanding that all of our organizations are complex collections of people, some good and some bad, some responsible and some not, some diligent in their jobs and some not . . .

In Arthur Andersen & Company, Enron’s auditors, our country once had an incredibly important asset that was destroyed unjustly by the stroke of the pen of one man, who was then the Assistant Attorney General at the Justice Department (Shlaes, 2014):

The indictment was served by Michael Chertoff, who was subsequently appointed Secretary of Homeland Security by President George W. Bush. The jury found Arthur Andersen guilty on June 15. Since federal regulations do not allow convicted felons to audit public companies, Andersen surrendered its license on August 31, effectively putting the firm out of business in the United States.

Later, upon appeal to the Supreme Court regarding the lawfulness of the action against them,  Arthur Andersen’s conviction was overturned in a unanimous decision (“Arthur Andersen LLP v. United States”, 2017) .

They were charged under 18 U.S.C. § 1512(b)(2)(A) and (B), which made it a crime to ‘knowingly … corruptly persuad[e] another person … with intent to … cause’ that person to ‘withhold’ documents from, or ‘alter’ documents for use in, an ‘official proceeding.’

Chertoff went after the cover-up: Andersen had shredded documents without reporting, and Chertoff contended that was a crime.

However, even though Chertoff’s accusation against the firm had no basis in law, it was too late to reconstruct the business that was built by thousands of employees over the years and around the world, and who had been performing honorably according to the words of their founding leader. This leader, Arthur Andersen, had taught them all upon their employment to “Think Straight, Talk Straight” as they did their work, but some were likely not thinking straight in the Enron case. Over the years, arrogance and greed had taken hold among some in leadership, similar to the story at Enron.

Michael Chertoff, said to develop a one-sided view of corporate America
Michael Chertoff, said to have developed a one-sided view of corporate America

Andersen, one of the Big Five accounting firms at the time, provided auditing services to almost 20 percent of the publicly traded companies in the US (Eichenwald, 2002). At the hands of a single individual in the US Justice Department and a few at Arthur Andersen who managed the Enron account, a travesty of justice cost 26,000 responsible, active US employees their livelihoods and their pensions, many who had served clients lawfully and well for their entire careers. This, not to mention the disruption and extra work created for the Securities and Exchange Commission, and the loss of productivity in all of those client firms whose employees had invested time over the years to enabling the Andersen audit relationship. Further, the Andersen offices in major cities around the world folded too, bringing the affected number of employees worldwide to 85,000, losing important local resource connections for our nation, not to mention the loss of faith in the US as a country by those nationals.

From an account in The New York Times (Eichenwald, 2002),

The indictment itself offers few specifics. It says that the obstruction of justice began on Oct. 10, without describing what documents were destroyed at that point, or by whom.

The only event described in the indictment that seems related to that date is the firm’s decision the day before to hire an outside law firm ‘to handle future Enron-related litigation.’

As is the case with the employees at Arthur Andersen & Co, we cannot characterize all Enron employees as just a bunch of crooks, nor can we say that the US government now or ever has comprised people who as a group of employees possess different characteristics from other groups of people who work for a living. We always have some who are more competent than others and some whose interests are either more or less aligned with organizational or societal interests.

sherron watkins
Enron executive Sherron Watkins is sworn in on Capitol Hill , Feb. 14, 2002, prior to testifying before a House Subcommittee hearing (AP Photo/Ron Edmonds)

In fact, while Michael Chertoff represents government action at its worst, Sherron Watkins, former VP at Enron, represents the best of corporate employees. Strange as it seems, it was Watkins who discovered the accounting issues and brought attention to the irregularities at her company, not the auditors or other watchdogs whose job it was to uncover such fraudulent activities. Sherron Watkins was one of those “smartest guys in the room,” yet an ethical person who risked her job to expose Enron’s misdeeds. It is also interesting to note that prior to her employment at Enron, Watkins had worked for a number of years at Arthur Andersen.  An article in The Guardian presents her CV as follows (Curwen, 2003):

Auditor, Arthur Andersen, in Houston and New York, 1982-90; portfolio manager, MG Trade Finance Corp, New York, 1990-93; joined Enron, 1993; moved to Enron International, 1997; became vice-president, 1998; joined Enron Broadband Services, 2000; returned to work for Andrew Fastow, discovered $700m losses hidden in Raptor partnerships and revealed her findings to Ken Lay, summer 2001; resigned from Enron, 2002.

Alumni from Andersen had also become Enron’s president and chief operating officer as well as its chief accounting officer (McRoberts, 2002). From an article in praise of Arthur Andersen employees (Shlaes, 2014),

Enron execs lied, to themselves, to their internal committees, to the world. Andersen fired the partner who handled Enron, opened itself to investigation, and prepared itself to pay giant fines. As a signal of the firm’s awareness of the scale of the trouble, Andersen approached another gold-seal name, Paul Volcker himself, to clean up. The idea was to save the firm. After all, more than twice as many people worked at Andersen in the US as did at Enron. Most Andersen employees had nothing to do with Enron. Many did not even work in the tax or audit divisions.

Are there ever just two sides in a complex organization?

With the understanding that large  organizations are complex, therefore likely to involve even more than two sides in an event, what can we observe about the portrayal of the Enron collapse in this movie? What does Enron: The Smartest Guys in the Room (Gibney & Kliot, 2005) communicate through the course of the film?

Thinking about this question, I am drawn immediately to our prior articles on documentary films, those films that claim to represent real (not fictional) activities and events, and to contain no professional actors and no scripted drama (Shapiro & Godmilow, 1997). We also remember that motivations for making a film are very different for different people, and that therefore, along with these different motivations comes different individual biases and associated perspectives.

Along with that observation is the realization that any judgment about the validity of a case comes with an understanding that at least  two  sides were considered. For example, we expect that if a jury is to make a just decision, the group must hear evidence both for and against the accused. How else can a verdict be justified?

How well does this movie present more than one side of the event? Techniques of persuasion may include arguments of others in order to convince people of the truth of an alternative perspective, but this doesn’t always happen. If only one side is presented in a case, the technique has propaganda at its core.

REFERENCES

Arthur Andersen LLP v. United States. (2017, Aug 4).  Wikipedia. Retrieved from https://en.wikipedia.org/wiki/Arthur_Andersen_LLP_v._United_States

Bigger than Enron. (2002). Frontline. Retrieved from http://www.pbs.org/wgbh/pages/frontline/shows/regulation/

Curwen, L. (2003, Jun 21). Interview: Sherron Watkins, Enron whistleblower. The Guardian. Retrieved from https://www.theguardian.com/business/2003/jun/21/corporatefraud.enron

Eichenwald, K. (2002, Mar 15). Enron’s many strands: The investigation; Andersen charged with obstruction in Enron inquiry. The New York Times. Retrieved from http://www.nytimes.com/2002/03/15/business/enron-s-many-strands-investigation-andersen-charged-with-obstruction-enron.html

Gibney, A., & Kliot, J. (2005). Enron: The Smartest Guys in the Room. USA: Magnolia Pictures.

McRoberts, F. (2002, Sep 4). Repeat offender gets stiff justice. Chicago Tribune. Retrieved from http://www.chicagotribune.com/news/chi-0209040368sep04-story.html

Shapiro, A., & Godmilow, J. (1997). Jill Godmilow in conversation with Ann-Louise Shapiro. History and Theory, Vol 36, No. 4. Retrieved from https://www3.nd.edu/~jgodmilo/reality.html

Shlaes, A. (2014, Sep 11). Andersen teaches the prosecutors a lesson. National Review. Retrieved from http://www.nationalreview.com/article/387731/andersen-teaches-prosecutors-lesson-amity-shlaes

 

The Art of Enron

Most people can bear adversity; but if you wish to know what a man really is give him power. This is the supreme test.—Robert G. Ingersoll

Unless you happened to work at Vermont’s Ben and Jerry’s in 1985 when the 5 to 1 rule¹ was in effect, America’s corporations, unwittingly or not, promoted a type of culture that is “dog eat dog.” Under such merit-based systems, ambitious employees clock in long hours and rely on a variety of skills to climb the competitive corporate ladder to the highest tier of company leadership, where the best fruits of labor can be enjoyed.

Enron executives took this culture model and its fruits to an unprecedented level. For them, the culture wasn’t confined to activities in Enron’s trading floors and accounting offices; for this precious few, it became a way of life in which nothing was ever enough.

According to Frey & Rosin (2002), founder and Chairman Ken Lay’s lust for real estate manifested in four houses in Aspen. CEO Jeff Skilling’s thrill-seeking tendencies had him hiking the Rockies, scaling glaciers in Patagonia, off-roading in Australia, among other “bone rattling adventures.” Other top executives of Enron spoiled themselves with strip clubs, cars, boats, and horses². This precious few indulged on a level attainable to the rest of us only in our fantasies.

Enron’s top tier was made up of, quite simply, boys and their toys. Wealth comes with opportunities, and among them is the power to influence. With their extravagant lifestyles, Enron’s executives instilled an over-the-top culture rife with an obsession for making money. This resulted in cut-throat competition among employees.

Enron art collection promoted healthy company image

Andrew Fastow, former Enron CFO
Andrew Fastow, former Enron CFO

Over the course, concepts of quality and substance were abandoned in order to perpetuate the illusion that Enron was a healthy company if not the healthiest. Its CFO, Andrew Fastow, was right in line with keeping up appearances; in addition to nimble financial gymnastics, he encouraged an art collection representative of the perceived vision of Enron: contemporary, avant-garde, cutting edge, and superior.

Thus an art committee was established with a budget of $20 million. It comprised five members who were assigned the mission to travel the world and look for art that would position Enron at the top of worldwide collections.  Each member of the committee brought significant expertise to the table, or at least a strong passion for all things art.

Said Barry Walker, a well-respected curator at the Museum of Fine Arts in Houston,

They wanted an important collection. They were striving to be cutting edge and to represent the Enron culture–which at the time sounded like a good thing.

Lea Weingarten Fastow, wife of former Enron CFO Andrew Fastow, became head of the art committee. Lea’s interesting family background included her mother, Miriam Hagar Weingarten, who represented Israel in the 1958 Miss Universe Contest and subsequently won for Best Speech. This same Miriam was the first female in the Israeli military forces to cross the Suez Canal into Egypt, an accomplishment made possible by disguising herself as a male. (At the time, it was against the law  for Israeli women to go to the front lines of combat.) Later married to a wealthy Texan named Jack Weingarten, Miriam gave birth to two girls, one being Lea.

Lea had a happy childhood of plenty, yet as a  9-year-old she was greatly upset when her parents divorced. She moved on to pursue a college education at Tufts University, where she met Andrew Fastow. After graduating from Tufts, Andrew and Lea each earned degrees from the Kellogg School of Management at Northwestern. Thereafter, Andrew accepted a job offer from Enron–on the condition that Lea be offered a position as well.

wooden sculpture
Wooden Sculpture

While Andrew’s career took off, Lea paused hers to be a full-time mother to two sons. The couple shared a zeal for collecting art, which eventually brought Lea back into the fold at Enron and chairing its art committee. Her role involved traveling all over the world, looking for art with millions of dollars at her disposal. Privy to Enron’s less-than-honest ways, Lea engaged in fraud herself. Upon Enron’s scandalous collapse, Lea pleaded guilty to tax evasion, and spent one year in jail.

Upon her release, Lea temporarily pursued nursing before ultimately utilizing her expertise to start an art consulting business that is her vocation today.  Lea’s husband was out of jail after  six years and spends his time giving talks on corporate fraud and doing research for a law firm.

Other Art Committee Members

Jeff Shankman was among Enron’s top traders making a fortune. However, there was only so much Jeff could learn about natural gas, so he became well-versed in a subject that highly interested him–art history; hence, he gained a spot on the Enron Art Committee. Jeff’s contributions to the committee must have gone unnoticed for he was left out of the distributions of astronomical bonuses to traders while Enron was crumbling. Bitter about this, Jeff testified against Enron in several lawsuits and shared that Enron’s unofficial motto was, “Get as much as you can.”

Post-Enron, Mr. Shankman endured financial difficulties from unsuccessful business ventures that included a hedge fund and a cement business. All the while, Jeff’s dedication to art endured as he served as Trustee of the Contemporary Art Museum in Houston. He purchased a painting from a New York gallery and later deemed it a forgery. He blackmailed the gallery, which responded with a lawsuit.

Few people possess the wealth to survive lawsuits flying back and forth, and Mr. Shankman was one of them.  He declared bankruptcy. One would think Mr. Shankman learned a thing or two from Enron’s debacle. Alas, he hid assets, and lied under oath about certain pieces of art valued at just under 1 million dollars. He testified that he transferred all art in his name to an entity called “1818 Art Partners Fund.” The truth was he maintained control of the art. His punishment was six months in jail and a fine.

Rifkin, former Director of Atlanta High Museum on the Enron Art Committee

Dr. Ned Rifkin, former Director of the Menil Collection and Atlanta's High Museum of Art
Dr. Ned Rifkin, former Director of Houston’s Menil Collection and Atlanta’s High Museum of Art

Dr. Ned Rifkin was one of two art professionals on the committee (the other being the above-mentioned Barry Walker). Rifkin, former Director of Atlanta’s High Museum and Houston’s Menil Collection, among other positions, is perhaps most well-known for the successful Rings Exhibit during the 1996 Summer Olympics.

Rifkin’s one and only run in with the law was a ticket for letting his dog run unleashed on Two Mile Hollow Beach in the Hamptons, New York, for which he dutifully paid the fine (McMorrow, 2015). Rifkin currently teaches Cinema Studies at Purchase College of the State University of New York (SUNY).

Mike S. McConnell, former Head of Global Marketing at Enron, shared the other art committee members’ enthusiasm for art. It may be because of his integrity that he emerged from the Enron catastrophe unscathed. For inspiration, he credits a collection of affirmations, or quotes, that he puts in his pocket daily. In addition to the Enron Art Committee, McConnell founded Enron’s Vision and Values Committee.  Quote McConnell,

At Enron, if we had held fast to our four values of respect, integrity, communication and excellence, we would still be a strong, innovative company today. I was a founding member of the Vision and Values Committee, and our goal was to indoctrinate those values and get everyone excited about living those principles at work. And, I would do it again today.

Unfortunately, making money was more important to many of McConnell’s co-workers than living by the company’s stated values. McConnell shares his enriching insight in a wonderful book entitled, Just Because You Can Doesn’t Mean You Should / Keys to a Successful Life. It is highly recommended reading, and several copies will be purchased for graduation gifts in the future for friends and family. The world would be a better place if everyone could read and live by the words of Mike S. McConnell.

Soft Light Switch
Soft Light Switch

Only $4 million had been spent by the art committee members when the mission was aborted. Below are a few items from the collection that had been purchased at the time of Enron’s epic collapse:

  • Soft Light Switch for $590,000. Not to insult a piece of art, but how this price of this piece was justified is beyond me.
  • Bower $766,000 wooden sculpture. It was eventually sold to Smithsonian for a price that broke even.
  • Jack Pierson’s sculpture, “Stardust.”

Had this committee succeeded, Enron might have had quite a valuable contemporary art collection. It was not to be. As from Aesop in his fable, “Much wants more and loses all.”

Glossary

Dog eat dog
marked by destructive or ruthless competition

Footnotes:
  1. Ben and Jerry’s company model was unique in that the CEO’s salary was tied to the salaries of employees, where the highest-paid employee made no more than five times the lowest-paid one. The company was forced to abandon this model in 1994 when it proved too challenging to recruit a CEO to replace the retiring Ben Cohen (Dreifus, 1994).
  2. So impressive was a horse owned by an Enron executive that it played a role in Linda McCartney’s funeral in New York (Frey & Rosin, 2002).

REFERENCES

Cohen, R. (2006). The Enron family philanthropies. Non Profit News | Nonprofit Quarterly. Retrieved from https://nonprofitquarterly.org/2006/06/21/the-enron-family-philanthropies/

Dreifus, C. (1994, Dec 18). Passing the scoop; Ben & Jerry. The New York Times. Retrieved from http://www.nytimes.com/1994/12/18/magazine/passing-the-scoop-ben-jerry.html

Ex-Enron executive indicted on bankruptcy charges. (2013). FBI. Retrieved from https://archives.fbi.gov/archives/houston/press-releases/2013/ex-enron-executive-indicted-on-bankruptcy-charges

Frey, J., & Rosin, H.  (2002, Feb 25). Enron’s green acres. Washington Post. Retrieved from http://faculty.msb.edu/bodurthj/teaching/ENRON/Enron’s%20Green%20Acres.htm

Ingersoll, R. (1883, Apr 1). The exchange table, True greatness exemplified in Abraham Lincoln. Quote Investigator. Retrieved from https://quoteinvestigator.com/2016/04/14/adversity/#note-13450-4

Johnson, P. (2001). Menil Collection director Ned Rifkin resigns. Houston Chronicle. Retrieved from http://www.chron.com/entertainment/article/Menil-Collection-director-Ned-Rifkin-resigns-2056938.php

McMorrow, T. (2015, Jul 16). Off leash and facing fines. The East Hampton Star.  Retrieved from http://easthamptonstar.com/Police/2015716/Leash-and-Facing-Fines

Murphy, B. (2002, Jul 29). Enron’s $20 million art spree assailed. Houston Chronicle. Retrieved from http://www.chron.com/business/enron/article/Enron-s-20-million-art-spree-assailed-2107326.php

12 Angry Men vs “The Trial of the Century”

So impactful was Reginald Rose’s Twelve Angry Men that it ignited Supreme Court Justice Sonia Sotomayor’s passion for law (Semple, 2010; Vergel, 2010). Multiply adapted from Rose’s 1954 teleplay, director Sidney Lumet’s film version was released in 1957 and is recognized today by IMDb as one of the top ten films of all time. It even received the laudable honor of being parodied by “The Simpsons” in 1994, which is akin to winning the most prestigious of awards (FlimSpringfield, 2016).

Continue reading 12 Angry Men vs “The Trial of the Century”

Henry Fonda, Angry Juror #8: Idealism in its Finest Hour

Sidney Lumet’s film 12 Angry Men is a patriotic movie that portrays America’s legal system in an honorable light. Juror #8, played by Henry Fonda, represents the idealistic citizen who is uncompromising in his stance to do the right thing against insurmountable odds.

Yet, according to Weiser (2016),

The hallowed jury trial is a right enshrined in the Constitution and immortalized in American culture. But these days, said Daniel C. Richman, a professor at Columbia Law School, ‘12 Angry Men is more a cultural concept than a regular happening.’

Continue reading Henry Fonda, Angry Juror #8: Idealism in its Finest Hour

Dr. Martin Luther: Persuader–and Not Simply a Humble German Monk

Filmed in Wiesbaden, West Germany, this month’s movie, Martin Luther (Pichel, 1953), received Oscar nominations in 1954 for Best Cinematography, Black and White, and Best Art Direction-Set Decoration, Black and White.

As one of the producers of this movie, the Lutheran Church in America’s presence suggests a protestant bias, although we expect an unbiased historical accounting from its statement as part of the credits at the beginning of the movie,

This dramatization of a decisive moment in human history is the result of careful research of facts and conditions in the 16th century as reported by historians of many faiths.

Martin Luther, Augustinian priest
Dr. Martin Luther, Augustinian Priest

Often described as “a humble German monk,” Dr. Martin Luther (1483 – 1546) was also a gifted scholar, having attained the highest level of university education. He served as Professor of Theology at the University of Wittenberg for his entire career, and as a Catholic Augustinian Priest until his excommunication by Pope Leo X in 1521. Continue reading Dr. Martin Luther: Persuader–and Not Simply a Humble German Monk