Enron essays

Enron essays Years before headline-grabbing accounting schemes, document shredding, executive bonus scandals and employee losses, Enron began as a small oil and gas pipeline company in Texas. Begun in 1985, it profited by promising to deliver gas and oil to a particular utility or business at a fixed future date and at a fixed price. As the energy markets, and in particular the electrical power markets, were deregulated, Enrons business expanded into brokering and trading electricity and other energy commodities. The deregulation of these markets was a key Enron strategy as it invested time and money in lobbying Congress and state legislatures for access to what traditionally had been publicly provided utility markets. Some of Enrons top executives became frequently named corporate political patrons of the Republican Party and the campaigns of George W. Bush and other elected officials. As Enrons business grew, it became a broker, a middleman, which made money from the difference between ener gy commodity sales and purchase prices. The actual prices Enron paid for and sold its commodities at were kept secret. As Enron began to face competition from other energy commodity traders, the business arrangements became more and more complex. The company was creating markets for products that never previously existed, and maybe shouldnt have existed. Customers could insure themselves against changing business conditions, including changes in interest rates, commodity prices or even a change in the weather. According to The Washington Post, over time the volume of business from these nontraditional contracts dwarfed Enrons mainline market in commodity trading. The stock price soared and Fortune magazine heralded Enron as one of the most innovative companies in America. Executive compensation for Enron CEO Ken Lay in 2000 topped $53 million, with exercised stock options of more than $123 million and unex...