Enron

Today I would like to examine Enron. Now, I’m aware that most of my audience was fairly young when this happened. Heck… I was 8 years old. I first heard about it in my Consumer Economics class in high school. So to give a brief recap, in December of 2001 Enron experienced the largest bankruptcy to date (later surpassed by Worldcom in 2002, and the Lehman Brothers in 2008). Although, prior to the scandal, Enron was a blue chip stock, also known as, as stock that can fair profitably in both good and bad times. The problem was, Enron’s internal and external auditors were “in on it” meaning they were aware of the creation of offshore entities to avoid taxes and the destruction of documentation. But most of the company did not know that their CFO (chief financial officer) Andrew Fastow led a small group of people to create companies that were not on company records to ensure him, his friends and family, hundreds of millions of dollars.

In 2001, the Securities and Exchange Commission (SEC) expressed interest in looking into the companies assets. You can see in the first three paragraphs of the following press release that Enron was ready to oblige.

This is quite intriguing because it seems that the executives were almost cocky about what they had done. They did not at all expect to get caught. This air of arrogance is what turns me off of their public relations. There is being open and transparent. Enron executives made it look like they were open AND transparent. Even though they did not take into consideration just how transparent they really were. 

Just as a reminder... openness is what you tell people up front, transparency is what people can find out. 

All in all, no degree of PR can help the monstrous scandal Enron concocted. And that is something to remember. Public relations should be involved in the process from the very beginning, that way they can attempt to be proactive in case something in the company goes wrong and a statement needs to be created and delivered.