- March 19, 2013
- Posted by: essay
- Category: Term paper writing
Investigating more deeply, it was discovered that Enron maintained a high level first of all of his income with accounting tricks, but also getting benefits from the government favors as a means of support in election campaigns and donations to numerous politicians for money or stakes. Behavior of this kind was adopted for the benefit of members of the Republican Party, but also that democratic. Thanks to this, the company has received numerous aid in the form of softening of the laws against pollution. The decision not to join the Kyoto Protocol was probably also influenced by pressures of Enron. Maneuvers of this sort were not new to society: for example, permission to build an oil pipeline in Mozambique was also obtained with the help of Clinton, who threatened to cut off the African state financial aid if he had not consented to the demands of the multinational.
A failure of such proportions was pretty serious, but not enough to undermine the entire U.S. economy, which overall has held up quite well. However, Enron has accumulated a debt of about $ 10 billion distributed in various banks around the world but mainly in the United States. The banks that had granted loans to corporation found themselves in difficulty, and exerted more pressure on other companies that were appealed to them to get loans, causing the failure of some, such as the supermarket chain Kmart. Many insurance companies also found themselves having to reimburse the loss and therefore collapsed. The biggest problems were still found among the shareholders and especially the employees who were fired en masse.
Moreover, even pension funds were used by the company, and 20,000 employees were left without pensions, losing the ability to take advantage of contributions already paid. After the bankruptcy, Congress established a commission of inquiry and administrators have been indicted and sentenced to prison terms ranging from 18 months to 24 years. Ken Lay, Chairman and also Chief Executive Officer following the resignation of Skilling died of a heart attack before conviction; Jeff Skilling, CEO and “director”ť of the huge financial scam was sentenced to 24 years in prison; The other leaders who have collaborated with the justice system, have not been able to avoid severe punishment, according to Enron Creditors Recovery Corporation (Formerly Enron Corporation) (2011).
The U.S. government opened criminal investigations against dozens of executives at Enron and Arthur Andersen. Enron was also sued by the injured parties. Due to a series of financial scandals corporate, like Enron, was drafted Sarbanes-Oxley in 2002. The primary charges against Enron were falsified statements, misleading investors. In the festering scandal committed suicide Vice President Clifford Baxter.
With presence in over 40 countries and a number of associated companies, the collapse of Enron, had a negative impact on energy markets general and several companies that had granted loans or had contracts with Enron. The court filing was an official body to initiate an investigation into the statement of the company, who admitted earlier this year that its profits were lower than those reported between 1997 and 2001. Questions about the accounting practices of the company that allegedly tended to cover the serious economic situation of the company rose to allegations of a former executive of the alleged systematic destruction of documents.