Opinion: Enron penalties should make an impression

The primary officers of Enron and the partners from Arthur Andersen on the Enron audit should serve jail time. Further, all of the assets of Arthur Andersen, the primary Enron officers and their board of directors should be seized until the Enron creditors are paid and the employees' retirement accounts are brought to a reasonable basis. These people were well paid for their fiduciary duties.

Before going further, let me disclose my background and biases. In the '60s, I worked for Arthur Andersen for five years. Before taking control of the specialty construction company I now run, I served as the chief financial officer for a domestic and international division of a major oil company. I tend to be a conservative.

During the '60s, all professional personnel at Arthur Andersen understood that in issuing an opinion on financial statements, the audit firm's function was to ensure that there was not a "material" discrepancy in the financial statements. If the auditors gave a "clean opinion" and there was a material discrepancy, the partners of the firm had unlimited personal liability to the extent of the damages done to those relying on those statements. If one partner improperly signed a client's financial statement, each and every partner (at least in the United States) was responsible for that material error. Each partner could lose his home and all assets. With all of the partners and their insurance, this possibility was highly unlikely, but this is part of the reason for the high billing rates. Now Arthur Andersen is a limited partnership protecting the partners' personal assets.

In a real sense, these people may have committed the largest grand theft in U.S. history. They should pay. If they escape with a significant share of their assets, we would create a terrible environment further encouraging people to get away with whatever they could. Our capitalistic system has created the greatest wealth for the most people, but if we allow people to cheat in business without significant penalty we are on the way to anarchy.
-- John C. Schierholz, St. Petersburg

Track the stock sales

Is Enron a corporate, political or insider scandal? Scapegoats are in the offing regarding Enron. Someone has to take the fall. Will it be corporate officials, accounting firms, political leaders or someone else? Certainly influence peddling is obvious. Many knew what ingredients Enron needed to stay afloat. However, many in the above groups chose to support or, at least not to hinder, Enron's direction until it was too late. Then the plug was pulled. The fall was imminent. Many knew it would come.

One litmus test for culprits hasn't been voiced, yet is readily available and can't be shredded. It is the list of stock transactions before the start of Enron's stock collapse. How many among corporate leaders, accountants, politicians and governmental officials, either directly or indirectly through blind trusts, sold Enron stock on insider information. Surely tax records will be available shortly for all 2001 transactions and 2000's can be produced overnight. Wouldn't a call for full disclosure of stock selling over the past two years provide focus on the real culprits? Who knows? Maybe corporate officials pulled the trigger but hundreds of politicians, governmental officials, accountants and others may prove to have held the gun.

A call for this independent investigation will place clear blame and may prove one key way for those forming class-action lawsuits to retrieve their lost retirement funds. Additionally, this litmus test may end a lot of careers and clean up future systemic influence peddling.
-- Peter W. Stevens, Clearwater

Learning investment lessons

Like Mary McGrory and George Will (columns Jan. 18), I believe that there are lessons to be learned from the Enron scandal. Unfortunately, some are likely to be overlooked.

Now, we know that it is dangerous for employees to invest most of their pension funds in the company that employs them. A few of us remember what Charles E. Wilson, a president of General Motors, wrote on that subject nearly half a century ago. He recommended limiting such investments to 10 percent of the total. Management expert Peter Drucker, in his book, The Unseen Revolution: Pension Fund Socialism Comes to America, seconded Wilson's warning.

Professor Drucker's main thesis suggests why that lesson is so important. He contended that American workers and retirees already owned a large and growing part of corporate business and industry through their pension funds. His figure was 20 percent, but that was several decades ago. Now, the year 2000 Statistical Abstract of the United States (table 846) puts the 1999 assets of pension funds (excluding Social Security and other federal) at $9.6-trillion, and increasing by more than $1-trillion per year.

Of the above assets, $4.5-trillion, an amount approaching the size of the national debt, was in corporate equities. Since 1999, falling stock prices have probably wiped out most of the many billions in annual pension contributions. But, it seems unlikely that the portion of corporate ownership remaining in our (I own part of one) pension funds has been much reduced.

Sometimes the most significant information is no secret, it simply fails to make headlines. Too few people bother to look for it.
-- Ivan Parkins, New Port Richey

Overlooked issues

Re: Congressional hearings on Enron, Jan. 24.

Thank you for the listing of the various congressional hearings into the Enron affair. The list was telling in that it showed the broad range of the review, but apparently two critical issues have been overlooked: the corporate tax avoidance and manipulation, and the power of corporate influence of government through access purchased with campaign contributions.

While several thousand people have been hurt by the collapse of Enron, millions of us are affected by these two critical issues. Enron was an example of a corporation avoiding its share of taxes on one hand and influencing energy policy to provide more tax breaks and relaxed environmental standards on the other. Its money was allowing it to shift more of the tax load to those of us without that access.

One has to wonder: Are all these hearings meant to make lots of noise, focus attention on two organizations and divert us from the truly critical issues?
-- Bob DuBrul, Palm Harbor

What a deal

I read that Dick Cheney and Colin Powell, while on taxpayer-paid trips to India, sought to collect debts owed to Enron by the government of India. Only a few million contributed to the Republican Party and Enron has the debt collection firm of Dick & Colin at their disposal. What a deal!
-- Kenneth Holder, Lutz

Department defends against fraud

Like the statewide grand jury mentioned in your Jan. 24 editorial Identity theft and public records, we at the Department of Highway Safety and Motor Vehicles were "outraged" to discover fraud occurring in one of our driver license offices.

However, we must respectfully disagree with your conclusion that "the department uses... few procedures to prevent internal fraud... "

As a matter of fact, it was because of the procedures adopted as part of our "Quality Assurance Program" that we were alerted to the internal fraud occurring there. In turn, we initiated an investigation conducted by our department's Florida Highway Patrol, with assistance from the statewide prosecutor's office. It was because of our investigation that the examiners were terminated, indicted and arrested.

The department's intensive document identification and fraud training program for all of its driver license examiners has been nationally recognized as one of the nation's best. In addition, we continue to tighten our procedures to prevent internal and external fraud.
-- Fred O. Dickinson, executive director, State of Florida
Department of Highway Safety and Motor Vehicles,
Tallahassee

Our responsibility to animals

Recently there have been newspaper articles regarding the feeding of "wild" animals such as raccoons, cranes, foxes and bears. They say we have a problem with these critters begging for food. They even say that development is causing some of this problem. They say we should not feed the critters.

I will go along with them on alligators but not the others. Granted, it is a problem, but who caused it? We did, and I believe it's our responsibility to take care of it.

The greater "sin" is the overdevelopment of Florida. And it will continue as long as there is a dollar to be made on the overbuilding. Development must bring with it responsibility such as schools, roads, police, firefighters, hospitals, libraries and, yes, even dealing with the helpless critters we are displacing. If we are not going to provide for them, who will? Are we to turn our backs, close our eyes and cover our ears when we "hear" their hunger pangs? We should just pass a law that says it's illegal to feed them and stick our collective heads in the sand? Then the animals will go away, won't they?

The St. Petersburg City Council even drafted a law that it would have made it illegal to feed pigeons more than a couple of ounces lest you be arrested. The mayor vetoed it, thank God.

As for me, I am going to let God judge my feeding critters. Unjust laws should not be imposed on free people. I realize there are some vocal people who don't like critters, but I believe there are more caring, compassionate people who would like to see a solution other than starving them. Please tell "them" we care and want a solution, not a mandate.
-- Frank B. Hill, Homosassa

Stunning pictures

Re Two men & a museum, Jan. 20.

The Floridian section served a banquet of stunning pictures from the collection of the soon-to-be-opened art museum on the Tarpon Springs campus of St. Petersburg College, with an article that was terrific journalism.

After the Jan. 19 photograph on the front of the Floridian by Kinfay Moroti, depicting a homeless man looking like a sculpture, I didn't expect such a wonderful offering again the next day.

Katherine Gazella's detailed story on Jan. 20 laid out the life of a family of painters, especially Abraham Rattner, in such a way as to intrigue us to see this new museum as soon as possible. We are, indeed, fortunate to have this collection with its fine building in our area. What a treat it will be for all of us. Thank you to Allen Leepa for this meaningful addition to our community. And thank you to your newspaper for your great color photos and meaningful articles that make our St. Petersburg Times the best in Florida.
-- Lilyan V. Dayton, New Port Richey

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