Impacts of Unethical Behavior

Week 8-Checkpoint: Impacts of Unethical Behavior

Valerie A. Mooney

XAAC/280

January 10, 2013

Dr. Rodney Jean-Baptiste

Week 8-Checkpoint: Impacts of Unethical Behavior

The controversy surrounding Enron took several years to emerge into the daylight to shock and rock the world with the story of the crime, tragedy and scandal that ensued around this mega corporation based in Houston, Texas. The timeline as sketched out by a USA Today article chronicles the series of events spanning from 1985 when Houston Natural Gas merged with InterNorth to form Enron. Kenneth Lay becomes the CEO of the company in 1986.

• 1989: Company begins trading natural gas commodities

• 1990: Lay hires Jeff Skilling and Andrew Fastow, commodities trading.

• 1991: Richard Causey joins Enron as the assistant controller

• 1997: Skilling name president/chief operating officer. “Fastow creates Chewco, a partnership, to buy the University of California pension fund’s stake in another joint venture dubbed JEDI, but Chewco doesn’t meet requirements to be kept off Enron’s balance sheet.” (Press, 2006)

This is just the beginning of a long drawn out series of chief accountants and Enron corporate officers hiding debt and inflating products, damaging employees throughout the massive corporation. By December 2, 2001 Enron has gone bankrupt and thousands of their employment forces are laid off. By early 2002 the Justice Department is launching a criminal investigation. The way that the accounting practices were involved were at virtually every level, hiding debt, inflating