Enron leaves a complex legacy after 20 years of bankruptcy

Enron leaves a complex legacy after 20 years of bankruptcy


  • Enron‘s bankruptcy on Dec. 2, 2001, was the largest in US history at the time, bringing an end to the company’s spectacular fall from grace.
  • Enron’s innovations include modern-day energy trading, internet video-conferencing, and movies on demand, all of which were years before Zoom and Netflix.

Entry of an Epic Scandal

Enron’s bankruptcy on Dec. 2, 2001, sparked a massive scandal that resulted in nearly two dozen criminal convictions and major government reforms. Enron became synonymous with corporate fraud.

“Before the year 2000, Enron was one of the world’s largest solar and wind developers and operators.” It was the first major US energy firm to support carbon trading and had specific recruitment efforts at historically black universities. It also promoted women and minorities to prominent positions and the board of directors. “It also invested more than $28 million in equity investments in underrepresented communities and entrepreneurs,” Elizabeth Lay added.

“The strategy was straightforward,” the Lays explained. “Hire the smartest people you can, give them healthy financing, and efficiently run the back office for them so they can set up new markets.”

Former Enron international division executive Stephen Webster described a high-pressure, sink-or-swim culture.

Former Enron Energy Services director of strategy Ravi Kathuria described a culture in which staff was granted a great deal of autonomy. Bosses never called to see how their employees were doing or what they were doing. Staffers were expected to take advantage of their newfound independence.

“Enron supported innovation, and it generated an environment within the firm where everyone acted almost like an entrepreneur, their internal entrepreneur.” “And you were in charge of your fate,” he added.

Bringing in the cutting edge technology and strategy

Even the company’s toughest opponents admit that Enron was a trailblazer.

While Enron’s trading business had little to do with the company’s accounting disaster, Hirs claims that the unit’s performance provided incentives for questionable accounting in the trading unit and elsewhere.

Changing the Market Dynamics

Enron would attempt to repeat its natural gas success in other markets, with varied results. Though three Enron traders pled guilty to manipulating the market in California during a power outage in 2000, the company became a pioneer in electricity trading.

In a 2003 post-mortem, FERC workers wrote, “Significant supply deficits and fatally flawed market architecture were the core causes of the California market breakdown.”

Perhaps the most troubling was Enron’s attempt to work its magic on the embryonic broadband industry in the 1990s. Although it has influenced how we communicate and consume material to this day.


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