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New York Times reporter, author speaks on EnronBy Jana McConnell Kurt Eichenwald, a New York Times senior writer and investigative reporter, spoke at Iowa State Nov. 10 about his current book “Conspiracy of Fools: A True Story.” The book details the collapse of Enron. In his lecture “The Enron Story: Mismanagement, Crime and Politics,” Eichenwald outlined how he got involved in writing about corporate scandal and what led him to write a book about Enron. “This story was perhaps the best known of any I’d ever worked on, but possibly the least understood,” Eichenwald said. Eichenwald said he first got the idea to write about corporate corruption when he read the John Grisham novel “The Firm.” “Make no mistake,” he said. “John Grisham writes business books.” Eichenwald said the only thing different about what he and Grisham do is that Grisham uses imagination. Eichenwald's nonfiction books are based entirely on reporting and facts. “Every fact, every piece of information comes from somewhere,” he said. Eichenwald examined audio, video and documents; visited different locations and interviewed hundreds of people to find out as much as he could about the Enron scandal. He then used his research to create timelines that led to the story. “This form of reporting is actually the most accurate thing I’ve ever done,” he said. “You don’t care about who comes out looking good and who looks bad. You don’t care because it doesn’t matter.” Eichenwald said he aims to come up with something “as close to truth as I can get.” Eichenwald explained how Enron officials started making bad business decisions that led to the corporation’s demise. After getting some good publicity, Enron's officers and board of directors started adopting nonsensical business models. They approved questionable business plans because the ideas came from Enron executives, who were touted in the media as being brilliant. “At Enron, arrogance became a substitute for analysis,” Eichenwald said. The author explained the intricacies of how Enron made bad investments and borrowed money from itself. The Enron scandal occurred as part of a broad conspiracy. Numerous parties were to blame, Eichenwald said. The board of directors that suspended judgment because Enron was supposed to employ the best businessmen was to blame. The investment bankers and analysts were to blame. The lawyers, commercial bankers and the accountants were also at fault, he said. The American people share in the blame, Eichenwald said. Many investors didn’t care that Enron didn’t make sense as a business because they were making money overnight on the company's stocks. “Enron disclosed way more than anyone needed to know to know,” Eichenwald said. “That was the environment that enabled Enron.” Some say corporate America has learned its lesson from Enron and such scandals won’t happen again. Eichenwald disagrees. “We don’t just have a business cycle, we have a fraud cycle and it follows closely,” he said. Eichenwald warned that investors need to be more cautious and stick to a strategy, even if it means leaving money on the table, otherwise there will be another conspiracy of fools. Following his speech, Eichenwald took questions from the audience and held a book signing. The Iowa State University Bookstore said they sold 10 of the author's books at the event. Kate Strickland and Jared Taylor, senior reporters at the Iowa State Daily, were selected by Greenlee faculty to dine with Eichenwald and other students and faculty prior to the lecture. “He had a lot of really interesting things to say about Enron … and journalism in general,” Taylor said.
Last updated: Nov. 11, 2005 |
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