It just warms my racing heart when I see evil people get what they've so richly deserved
for so long. So it was with great pleasure last week that I saw one of the most vile and
greedy corporations in America get what was rightfully coming to it.
By now, your mind is reeling with the list of vile and greedy corporations that you'd
like to see getting raped by karma. Yeah, I know --Exxon, Mary Kay, Microsoft,
ChevronTexaco, Wal-Mart -- there?s so many to choose from! But with winter already
bearing down on us, and for those of you who nearly filed for bankruptcy while trying to
keep warm last winter, one name should stand out above all the rest: Enron.
Who the hell is Enron? Enron is/was the largest buyer and seller of natural gas in the
country, as well as the nation's #1 electricity wholesaler. Based in Houston, Enron
doesn't sell natural gas and electricity to schmoes like you and me. They sell the to
power production plants and distributors, like PG&E and SoCal Edison. As in every other
industry, when the wholesaler jacks up the price, so does the distributor --leaving the
consumer in a grave position. Such was the case last year, when Enron sold natural gas
and electricity at their highest prices ever, while claiming that "market forces" were
the real cause of these unconscionable robberies.
No one really believed that, including the federal government, which launched an
investigation of Enron. So did the state of California, which refused to pay any of
Enron's egregiously inflated bills after the state picked up PG&E's massive debt last
winter. While Californians were the hardest hit, with the majority of our electricity
being generated by gas-burning plants, people across the nation were reamed by natural
gas bills that were double and triple what they had been the year before. To everyone
involved, it appeared that the "market forces" affecting Enron were those of its own
making, conveniently engineered for Enron?s maximum benefit. During all of this, Enron
was enjoying second-quarter profits that were 40% above the previous year's
second-quarter earnings; Enron?s stock was also lofting near it?s all-time high of
Oh, the difference a few months can make.
Enron's stock started it?s downward trend around the beginning of the summer, when mild
temperatures across the nation substantially lowered the demand for electricity and
natural gas. But the real killer took place in the fall. During October, the Securities
and Exchange Commission?s investigation of Enron began turning up evidence that the
energy giant had defrauded it?s stock holders by suppressing the company's true financial
condition. Enron had sought to diversify its holdings over the last two years, and many
of the investments had lost billions of dollars. Once shareholders got wind of this,
Enron?s stock plummeted 80% in three weeks.
But the capitalist ocean is no place for a sick or wounded fish. Sensing the desperate
flailing of a competitor in trouble, Dynergy, Inc. started to size up Enron as a
Now I'm no fan of corporate consolidation. As I've mentioned in previous columns, the
end result is always the same for the consumer: fewer choices, higher prices, and
terrible service. And with Dynergy taking over Enron?s assets, we're probably looking at
an extraordinarily dangerous energy behemoth on the horizon. But that's later, and like
a good American, I'm focused on the here and now.
In the here and now, the shareholders of Enron lost not only 80% of the value of their
shares in over the course of six months, but further saw the value of those shares
reduced in the Dynergy takeover deal. For every share of Enron stock held, the owner
would receive only .2685 of a Dynergy share. That?s right, mathematicians -- each Enron
share will be worth a little over 1/4 of a new share when it comes to the buy-out. And
since Dynergy is buying out Enron in a stock swap, Enron?s shareholders will probably be
clogging the phone lines at suicide prevention centers from now until Christmas. And
they're not the only ones. Just how many of Enron?s officers, managers, and employees
will Dynergy want to keep on in the new company?
Like I care. While Dynergy may rape us down the road, today its' time to strike up the
jazz band and go dancing all over the grave of the former evil giant known as Enron.