The Clusterfuck Nation Chronicle

Commentary on the Flux of Events

Did anyone else catch Senator Peter Fitzgerald (R- Ill) on C-SPAN last night? Fitzgerald came out and said point blank that his laborious review of Enron's practices and balance sheets convinced him that the company was nothing more than a plain old Ponzi scheme. He made the point three times in ten minutes, and for those who didn't get it, he explained that a Ponzi scheme was the same as a pyramid scheme. Fitzgerald, 42, ranking Republican member of the Senate commerce committee, worked as a banking and finance lawyer before he entered politics. He remarked that Enron CEO Kenneth Lay must have been "the most out-to-lunch" corporate chief ever to preside over such an obviously shifty operation. The great mystery, Fitzgerald said, was how all the "firewalls" of financial oversight -- the SEC, the accounting profession, the consulting attorneys, the Wall Street analysts -- all failed utterly to comprehend the enormity of Enron's financial shenanigans. Senator Fitzgerald appeared determined to find out just how they did all fail. If the hearings go forward in this spirit, the ensuing revelations about how corporate finance is conducted these days is liable to slam the stock market. Fasten your seat belts, it's going to be a bumpy ride.