Media Critiques
For Houston and much of the world, Enron could be considered the story of the new millennium. All the necessary ingredients for drama are included – corporate greed, millions lost to the savings of working grunts, denial and obfuscation, a suicide, and the exposure of rampant accounting fraud and management betrayal in a slew of publicly held corporations.
News organizations from all over the world have covered the Enron collapse. Agence France-Presse still has a Houston stringer who primarily covers Enron. Enron is the story that will not end.
Looking at the media’s coverage of Enron is like looking for chisel marks on Mount Rushmore. In fact, the term that best describes the media’s handling of the story is over-coverage.
A search of the Houston Chronicle archives turned up more then 4800 articles concerning Enron since Aug. 1, 2001. The New York Times listed almost as many over the same period.
In addition to news stories, numerous books, movies and TV specials have featured the fallen energy giant. There is now practically nothing that has gone unreported concerning the scandal.
However, when looking at the earlier days of the story, important differences between mainstream and alternative news agencies emerge.
One early tactic was to spin the story as a business failure rather than a political scandal, essentially controlling the damage done by focusing on errant individuals.
White House press secretary Ari Fleischer under President Clinton gets credit for pointing out this gambit during the NBC News special "The Bush White House: Inside the Real West Wing" (1/23/02), boasting: "Look what made it onto the air. The business scandal side of it. All the political stuff they're ignoring."
Most of the mainstream press failed to ask questions concerning Enron’s role in setting up the Bush administration’s energy policy or the company’s contributions to the political campaigns of Bush and high-profile Republicans.
In the alternative press, both Mother Jones and The Nation ran stories on the political ramifications as early as the beginning of 2002 while the TV networks and mainstream dailies focused on business, the job losses and human interest.
Tom Brokaw on CNBC (1/26/02) said, "At the moment, it is a huge business scandal, but whether or not it becomes a big political scandal as well, I think we have to wait and see.”
Mainstream media certainly waited – too long.
The treatment of Ken Lay, the charismatic chairman of Enron, was also handled differently by different media groups.
In Houston, where Lay is considered a favorite son, scant coverage focused blame on him. After all, he was one of the biggest charitable givers in the city, so the other key figures of Enron were raked over the coals by the Houston media while he was given the benefit of the doubt.
By contrast, Mother Jones regularly wrote about Lay as one of the central figures to the scandal. He ran the company, was friends with Bush and Cheney, and sold much of his stock in the months leading up to bankruptcy. The Houston Chronicle was strangely silent on Lay in the beginning of the story.
One glaring hole in the media’s coverage of Enron is the lack of stories before the fall. The company was still rated as a buy by some major brokerage firms just a few weeks before bankruptcy was filed.
Almost no one saw the cover-up until it was too late, and those brave few who spoke out against the companies practices were either ignored or fired.
In a story by William Greider published in The Nation on April 25, 2002, the author talked about the "Enron Nine," a group of financial institutions that “collaborated with the now-bankrupt energy company in its financial sleight of hand – the deals that enabled Enron to inflate its profits, conceal its burgeoning debts and push its stock price higher and higher.”
These companies and the media in general were part of a large-scale effort that looked the other way while Enron was cooking the books.
The media failed miserably with Enron. If some of these fraudulent practices were looked at closer in the beginning, as Frank Partnoy, a professor at the University of San Diego Law School, points out in an article by David Corn in the Jan. 24, 2002, issue of The Nation, the devastation of billions of dollars in portfolios might not have occurred.
“Enron, which not only wiped out $70 billion of shareholder value but also defaulted on tens of billions of dollars in debt, fell apart because of its sleazy and complicated use of unregulated derivatives,” said Partnoy, “The collapse of Enron makes it plain that the key gatekeeper institutions that support our system of market capitalism have failed."
© Copyright World Internet News 2006-07
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