I’ve also read several paragraphs of possibly relevant wikipedia articles, sooooooo
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I guess I made up the idea that you couldn’t revoke a guilty plea post-conviction. I wonder what I was thinking of. Definitely not a lawbro.
Yes, read both Conspiracy of Fools and The Smartest Guys in the Room. Both excellent books. (The Smartest Guys in the Room movie is terrible.) But I didn’t remember them portraying Fastow as being as clueless as he seemed today. So now I’m planning to go back and read them again. Because this guy was absolutely not coming up with super-genius structured finance transactions. At best, he was the guy yelling, “We’re $200 million below our earnings target, so you better figure out out how to fill the hole.”
I didn’t dig too deeply, but I believe my institution reimbursed his expenses, but did not pay him a speaker fee. That being said, even if my institution didn’t pay him, it was still a debacle. We had a room full of business school students listening to this famous guy talking about ethics in business. But the general message was, “I actually followed all the rules. Not a single transaction that we did violated GAAP, went against Arthur Andersen’s recommendations, or involved withholding of information from anyone. [All of that is bullshit.] Bill Belichick takes advantage of loopholes and everyone applauds his genius, so it’s not clear why people are mad at me. [True story - he had a slide on Belichick and a discussion of how Belichick uses loopholes to increase his odds of winning.] The only reason I pled guilty is because jurors would have been overwhelmed by that detailed accounting nonsense, and they would have sent me to jail for life because so many people lost so much money and so many jobs.”
So the final takeaway? “When you’re faced with this situation where your boss is asking you to engage in this transaction that you know is designed to mislead credit rating agencies, analysts, and investors, don’t just say yes. Instead, ask yourself if you’re likely to be caught and face punishment. If yes, you have a hard choice to make.”
It was completely embarrassing and I wanted to throttle someone.
(Fun fact - Sam Antar, CFO of Crazy Eddie, did a similar post-conviction tour of talking about ethics to business school students. I never saw him speak, but I understand that he seemed more penitent.)
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I don’t remember the exact scenes in Conspiracy of Fools, but I remember there were a couple of descriptions of jaw dropping idiocy from Fastow. Makes me want to read the book too, just looked for my copy of it but I don’t think it’s still around. Sad!
What was the mood in the room? Did he take questions?
I personally know a large endowment manager who took a meeting with Fastow and literally ran out to his traders and told them to short Enron when the meeting ended.
Maybe just bad lighting but that looks for real like a borderline 1st-2nd degree sunburn on her thigh. I’m part Scandinavian, that shit is terrifying to me,.
Her legs are a very different color from the rest of her body. Is that bad Photoshopping or a spray tan?
EDIT: Okay, slow pony
Either way if she looks that skinny in the photos - she must look like a stick figure IRL.
No doubt. Her arms and legs are practically skin and bone.
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Some people just can’t take a tip
Hard to gauge the mood in the room - it was a bunch of undergrads and masters students, many of whom probably just came for the free lunch. They laughed at the appropriate times, like when Fastow showed his “CFO of the year” award and when he said “Would you support your head football coach providing performance-enhancing drugs to his players if you knew those drugs weren’t explicitly banned by the NCAA?”. I didn’t poll the faculty, but I know the guy next to me was about as fired up as I was.
Fastow did take a few questions, but they weren’t terribly sharp or interesting. One I remember was “Do you think the auditor/client relationship is too cozy, and invites these kinds of situations?”.
He also listed his phone number on the screen and invited people to ask questions via text.
But it was very striking how completely unintelligent he seemed to be. If you’re going to bring down one of the world’s largest companies through a series of accounting manipulations and outright fraud, I want you to be someone really clever. I want you to say, “Yes, I was the one who came up with the idea to sell a Nigerian barge to Merrill Lynch and call it operating cash flow, when it was really a collateralized borrowing. I was the one who decided to set up a partnership with Blockbuster related to online video streaming, sell the hypothetical cash flows from this partnership to CIBC, and then book more than $100 million in profits without ever actually doing anything.” [Fastow today: “We were Netflix before Netflix!”] Instead, he’s just some dolt who believes he was following the rules the whole time, and jurors are just too stupid to understand the complexity of real business.
What drives me craziest is that he claims to have done all of this on behalf of his shareholders: “I knew that we were a BB- credit rating, but that I could bump that up to a BBB+ rating by engaging in some of these transactions. That saved our shareholders $50 million a year - how is that bad?”. He seemed to have no problem at all completely lying to the shareholders, because they obviously benefited from a higher stock price. Like a doctor who lies to his patients and says their weight and blood pressure are world-class, leading them to be temporarily happy as they suffer from diabetes.
I didn’t expect to be as angry as I was/am.
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:(
I get a lot of dramatic tan lines. Sometimes I’ll have very stark glove tan lines. It’s there now, but not so dramatic in the winter.
Very interesting. I have been an ethics and compliance officer for my company and learned a lot about how and when things can go wrong. I would say that what you describe includes characteristics that we see as actually pretty common in these ethical “missteps”:
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Unethical leadership are not ingenious supervillains. Literally all you have to do to establish an unethical business practice is set up a compensation system that rewards unethical behavior. If you do that the ethical people will leave and the unethical people will come. You don’t have to actively design unethical practices, it will just happen organically. There is seldom a “master plan” to implement an unethical practice - you just let people get ahead by acting unethically and let everyone else see that.
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Declaring everything to be in the interest of the shareholders is a way to frame unethical behavior in a way that makes it sound like a good thing to the Board. A good Board of Directors is the number one control on bad management, whether that is incompetence or unethical behavior. But they’re not that hard to fool, really.
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Lack of remorse is common in a big organization. Leaders of large institutions have a psychological free roll situation because every corporate outcome has literally dozens to hundreds of sets of fingerprints on it. It is very common for leaders to claim credit for good outcomes ("under my leadership we beat our sales target by x%) and to present failures as team failures (“we received many regulatory deficiencies, but don’t worry I’ve fired the compliance officer and replaced him with someone else”).
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https://twitter.com/LLW902/status/1217998676460756993
I mean. Does actually seem like one in Card’s column here.
“You ungrateful blacks should be THANKING us whites for even LETTING you vote”
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I 100% believe that people who are incarcerated should be allowed to vote. Their turnout would be right at 100% and it would serve as a powerful incentive for the state to not let prisons get too shitty. I’d genuinely like to see campaign stops at state prisons where the politician promised to get them a bigger food budget and educational programs.
I genuinely think the criminal justice system would run a lot more humanely if we stopped pretending that you are no longer a citizen if you commit a crime.
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