Enron pulled the wool over the eyes of the American business media. As a result thousands of people were financially ruined, and corporate governance in the United States was drastically changed.
What is striking about this 2002 Washington Post article by Howard Kurtz is that it shows Enron’s demise was all so easy to predict. The company’s lax and opaque accounting and internal regulation was a disaster waiting to happen. Finally, the reporting and investigation of one journalist started the ball rolling in exposing the corporate fraud. The question is: what were the rest of them doing?
When the scandal was exposed, financial pundits and media experts tut-tutted in unison, deploring the corporate governance of the company and rightly charging it with institutional fraud. However as this article shows, the hard-hitting reporting came too late.
Only after investors, employees and the government had been duped did the mainstream media subject Enron to any rigorous analysis. Before this, the media was only too happy to believe the amazing story of growth and success that sounded too good to be true.
And it was.
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