No One Agrees on the Best Way to Deal With White-Collar Criminals
Decades after Enron’s fall, the author of The Smartest Guys in the Room reconsiders sentences handed out to the company’s executives.
Illustration: Chris Harnan for Bloomberg
Enron was a stock market darling back in 2001 when Bethany McLean wrote a skeptical article about the company’s financial statements. Soon after, Enron was in a death spiral, its name a byword for corporate malfeasance. The book McLean co-authored about Enron’s demise, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (Portfolio Trade, 2003), chronicled the nefarious activities of the company’s executives, several of whom ended up facing jail sentences. In this Next Chapter, decades after the scandal, McLean asks whether the punishments truly fit the Enron crimes.
On Dec. 2, 2001, the energy firm Enron declared bankruptcy. The pursuit of justice was aggressive. Enron’s accounting firm, Arthur Andersen, was charged with obstruction of justice and put out of business. Criminal charges were also brought against dozens of individuals. Both of Enron’s former CEOs, Ken Lay and Jeff Skilling, were sentenced to jail, Skilling for 24 years. “As the many victims have testified, his crimes have imposed on hundreds if not thousands a life sentence of poverty,” said Judge Sim Lake, who presided over the trial, when explaining the lengthy sentence.