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The Arthur Andersen Trial: Not as Boring as It Seems

We know about the shredded documents, the shadow holding companies, the financial improprieties—but that’s only the tip of the iceberg. Investigator Claire Zulkey gives you the real dirt on the dirty dealings.

The Arthur Andersen trial has been plastered all over the news the last few months, as the American public is told of corruption, greed, lies, crime, and questionable business practices. And what an effect it’s all had. Thousands have lost their jobs and their life savings—even the government has been touched—and CEOs of other companies are scrambling to save themselves from similar scandals.

But, really, who else cares? Nobody who’s not involved, to say the least. It was reported by the Associated Press that some of the jurors have been sleeping through the trial: and they’re required to pay attention.

Of the many big scandals and trials over the last ten years, this one has blown, big-time. There are no decapitated heads, no oral sex, no claims of spousal abuse, no drugs, no hookers, no X-rated theaters. Add to that the celebrity trials of both Winona Ryder and R. Kelly, which are drawing any potential interest away from this otherwise lame-o case. The Andersen trial is a zero on the Thrill-O-Meter.

Which is where the genius of Andersen’s defense attorneys lies. Of course, they thought, Nobody is going to pay attention to a trial about some company shredding files. Thus they began their terrible and brilliant plan of making this case as boring as possible. When fearful Republicans called in to find out how they would be affected by the scandal, they were reassured that no American was going to care about this trial. Besides, our country’s last politically tinged scandal involved thongs and stains. And practically nothing can top that.

Precious few people are aware of the real story behind the Enron/Andersen debacle. If Americans knew the actual story of the conspiracy, ‘The Arthur Andersen Trial’ is all anybody would talk about. Jay Leno would make jokes about it nightly, with Dancing Andersens, and souvenir t-shirts would be sold by the thousand. But since nobody seems to know all the gruesome details, here, blow-by-blow, is the real story behind what Andersen lawyers would have you believe, and consequently, not care about.

* * *

Debts Hidden behind Private Partnerships

In actuality, Enron lost the majority of its money in a poorly planned Christmas-party-slash-orgy. Company heads, in order to celebrate a particularly profitable year of the company, ordered astounding amounts of Russian caviar, Peruvian cocaine, and Brazilian whores to ring out the quarter. Well, that was the official plan for the get-together. Unfortunately, the party planners had come directly from a totally bitchin’ rave when they organized the fête, and so they ended up spending $800,000 on glo-stiks alone.

To hide the losses from investors, Enron invested in several mafia-owned storefronts, restaurants, and off-track betting parlors. Though it should have been predicted, this move did not result in any substantial profit for the company.

The Shredding

Andersen employees did, in fact, shred sensitive documents, but they were not any kind of evidence of Enron’s audits. The shredded documents were in reality the secret, pornographic emails from Mrs. Kenneth Lay to Mr. Andersen, who met at an inter-company picnic. Andersen employees knew that if Ken Lay ever had knowledge of such material, the relationship between Enron and Andersen would be destroyed and Andersen would go under (and they adored their master too much to see his reputation be spoilt). Also included amongst the kinky, perverted emails was Mrs. Enron’s extremely strong and occasionally deadly recipe for crystal meth.

Furthermore, it happened to be Andersen accountants who recommended the Enron investment in mafia businesses.

The Whistleblower

Sherron Watkins was simply one in a long line of the whistleblowing mistresses of Kenneth Lay. Lay had a bad habit of bedding his vice-presidents, spilling potentially damaging secrets to them, and then having them killed by Frankie ‘Hitman’ Murphy before they opened their big mouths to the Feds about the many business improprieties of the company. Watkins, however, managed to escape Murphy (literally and figuratively) and gave her story to the press. Fortunately for Andersen, however, Murphy had managed to drug Watkins beforehand, which resulted in the garbled tale that the public currently believes.

The White House Connection

As was essentially concluded, the Bush Administration had nothing to do with the Enron/Andersen cover-ups. However, Bush did have reason to become nervous when Lay was thrust into the spotlight, but that was more for personal than political reasons. That is to say, during a particularly debauched trip to Thailand in the mid-’80s, Bush and Lay had a brief but intense affair that ended in a drunken Thai Commitment Ceremony (not valid in the United States). Since then Bush has been keeping tabs on Lay—not out of friendship or business—but just to keep word from getting out. ‘Kenny Boy,’ indeed.

* * *

So you see, were the American public to find out the grisly details of the Enron/Andersen case, it would spell even greater disaster for both companies, not to mention throw the nation into an unneeded tailspin. (On the other hand, it would be great for Halloween costume manufacturers, who would make a mint manufacturing Ken Lay and Jeffrey Skilling rubber masks.)

Not surprisingly, other troubled companies have followed Andersen’s damage control-tactics.
Global Crossing
Accused of: destroying evidence of an SEC investigation
What actually happened: destroyed evidence of massive sales of defective Mexican fireworks to blind toddlers

Tyco International
Accused of: tax evasion
What actually happened: The sales-tax evasion charge is actually true, but Tyco’s not culpable; instead, Tyco CEO Dennis Kozlowski wasn’t paying his taxes from his second job, a profitable bootleg-film company specializing in adult Japanimation movies and educational filmstrips about nature

Accused of: hiding $3.8 billion in order to boost profits
What actually happened: WorldCom was stockpiling $3.8 billion to fund its plan to build a super-powered man-killing robot army that would, ultimately, settle a long-standing golf bet with Bill Gates

Accused of: supplying Martha Stewart with insider trading information
What actually happened: Stewart needed the extra money to maintain her Bronx-basement cockfighting ring

Claire Zulkey is a Chicago writer whose work has been published in the Chicago Tribune, The Wall Street Journal Online, The A.V. Club, and the Los Angeles Times. She runs the web site Zulkey.com and in fall 2009 will be publishing her first young adult novel. More by Claire Zulkey