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join the discussion: Who's to blame for the Enron debacle? Should accountants be held more accountable?


Dear FRONTLINE,

And now Worldcom.... Thank you for the perspective on what happened and what we, as investors, have to look forward to. Not unlike the S&L scandels of the 80's, I can only hope that this is the beginning of some much needed house cleaning.

Everyone failed in this mess. Corporate execs, auditors, our elected leaders and mostly us, the voters, for allowing our leaders to side with big business rather than side with those that truly put them in office. I don't see change coming from any place other than the voting public. If at all!

Edward Raasch
prior lake, minnesota


Dear FRONTLINE,

Your program was a bit biased against stock options based on the negatives of big profits by big players.

I appreciated to see that you featured two posters I wrote in your coverage of the anti FASB meeting. I personally wrote "STOCK FUELS GROWTH" and "FEDERAL ACCOUNTANTS STIFLE BUSINESS". Thanks for makeing me slightly famous.

I am one of the lucky that have earned enough from one comapany's options to stop working. At this level I am a rarity. However, I am an icon in Silcon Valley. Not me personnaly, but the idea that it can happen.

A lot of Silicon Valley creativity is fuelled by stock options.

Proposition: I am a very smart person, but not a business man. If I work my ass off and my ideas create great profits for the company where I do this work, how do I share in the profits? A simple way to make this bargain up front is to give me a stock option. If the ideas never play out, we all loose. If we do make a great product, I am guaranteed a share because of my options.

This is what I meant in my sign, "Stock Fuels Growth". In Silicon Valley this is an accepted practice. It is valid and good for the greater world. If I fail in spite of my great effort, I get nothing. This is the usual stock option.

FASB wanted to make these options taxable at the beginnning. How? They are worthless. Later they may be very valuable, but not usually. How do we predict?

The whole big deal is that BIG company BIG players are playing onc the same rules as me -- small employee. I agree they have played the system that was intended to protect me and were smart enough to beat the goose to death with the golden egg.

While we are chasing the powerful thieves that seem to be so (unfortunately) prevalent in the upper realms of the big companies, let us plase remember that there were good reasons for the original idea of stock options.

Kill that original reason for stock options and you will also kill a huge pool for connecting creativity with possibility.

Your focus on the big offenders missed the positive aspects that originally made stock options work for all of us.

Rex A
san jose, ca


Dear FRONTLINE,

Doing a special on how our "watchdogs" allowed Enron to occur without a video clip of Harvey Pitt's first speech as Charirman, in which he told an audience of auditors that the SEC would henceforth be "a kinder and gentler place for accountants", is like doing a special on the Clinton impeachment without a clip of the "I did not have sex with that woman, Monica Lewinsky" statement.

Too bad there isn't someone at the SEC to write a Colleen Rowley style letter about how small the chances of someone being caught are. Outgoing commissioner Laura Unger was quoted on the Newshour, "What you have to look at is the resources that the commission has." "Our budget is less than $500 million a year." "We have 190 people total looking at 17,000 public company filings. So to the extent that we can review, obviously we can only review a limited amount on an annual basis." "We review about 2,500 to 3,000 a year"

So without the resources or any motivation on the part of SEC Chairman Pitt, is it any wonder the public is being robbed blind?

Richard Griest
nashville, tn


Dear FRONTLINE,

In my opinion the principals in this ongoing sorry affair have inflicted more damage to the United States than any middle eastern extremist could ever hope to achieve. The longterm implications are catastrophic and beyond the grasp of reality for many citizens.

The international community realizes that the US is morally (and financially?) bankrupt. Without doubt China's regime is fully aware and prepared to move when, not if, the US economy implodes. America may have out-spent the Soviets, but China will simply wait for the US to devour itself.

And Bush will invade Iraq only as an attempt to distract his countrymen from the same realities uncovered in "Bigger Than Enron". Whether America falls for it depends on programs such as Frontline. I pray that you are able to excercise your public responsibilities more successfully than the treasonous employees of Arthur Anderson and their peers, who have betrayed their nation's trust and sold their children's future.

Warren F
vancouver, canada


Dear FRONTLINE,

Excellent Show.

Two ironical things:

1) The flip flops of Mr Tauzin and Mr Lieberman. Boy for a moment they fooled me into thinking that they wereon the side of individual investors by listening to the Enron hearings. Little did I know that they were the architects of the same systems they denied having anything to do with.

2) The demise of enron is a non-issue since the same CPAs who practised bad accounting just joined the other big accounting firms.

Kumar Mehta
cupertino, ca


Dear FRONTLINE,

While I am foursquare behind the proposition that the current market regulation scheme often favors the interests of Wall Street players at the expense of the small investor (and small companies), I am disappointed in Hedrik Smith's willingness to pile-on with a simple populist (and trial lawyer) perspective. He promotes the argument that a charge should be assessed for stock options that are charged to the income statement (shared by the esteemed Arthur Levitt). First off, this is a political position taken to discourage the granting stock options in a manner that is (often rightly) perceived to represent an abuse of power. We, the body politic, are upset by grants that create unseemly rewards to the top dogs of a company, which are not based on fundamental performance, and, are narrowly distributed. The current system is a real scandal, however, that doesn't legitimize charging the income statement for the "cost" of stock options. It is a political response an unpopular result. It is not driven by economics--there is no rational, consistent and fair way to assess a "cost" for the grant of an option (a point made by Sen. Lieberman).

What all parties agree on, however, is that stock options are a valuable tool for companies seeking to attract and retain talent. Since the vast proportion of job creation comes from entrepreneurial companies, and its difficult to assign a fair and consistent value to a stock option, perhaps we ought to look at reporting them in another way, without the artifice of assigning an "expense" to them.

We need a form of disclosure that reports potential shareholder dilution without distorting the income statement. Another alternative...performance based vesting of stock options.

I hope that future Frontline programs on this subject explore the problems of the conventional approach (expensing them) as well as alternative approaches such as these.

Karl Sjogren
fremont, ca


Dear FRONTLINE,

What a great program. Maybe it will make Americans wake up and see more clearly how slimy our corporate executives and some in congress really are. What always amazes me is the relutance of anyone to use the word "corruption" when it comes to the U.S., but is used quite liberally when it comes to other governments in other countries. Maybe it is time for someone to call it what it is no matter how unpleasent it might be.

Donald Jones
bothell, washington


Dear FRONTLINE,

Thank you for your informative report "Bigger than Enron." It's ironic that many of the politicians who constantly sing praises to "the market"--casting it as a salve to every social problem-- are also the ones who turn a blind eye while the game is being rigged.

Michael Rose
washingtion, dc


Dear FRONTLINE,

Harvey Pitt still doesn't get it. He keeps preaching quality. The focus needs to be on integrity.

Michael Wright
louisville, ky


Dear FRONTLINE,

In my opinion, the program on enron turned out to be the typical biased report I expected on business from pbs. The interviewer would barely let Mr. Pitt begin an answer before interrupting.

The thrust of your program seems to be the need for government intervention. As a CPA working with the tax code passed by congress, I can tell you that we definitely don't need their "assistance."

Your program looks like the opening salvo of the political campaign for this year.

madison heights, va


Dear FRONTLINE,

Your program, Bigger Than Enron, should be must reading for all members of Congress. Would that we would have more such programs.

It is shameful the so-called "mainstream" media is not carrying this story. But then this story lacks sensationalism, hype and scandal. Instead, it involves stocks, pensions and numbers. Well done, continue the good work.

John DeRosier
eau claire, wi


Dear FRONTLINE,

Thanks for an outstanding and very accurate portrayal of the American Scene.

From one who is in the corporate/legal/banking/accounting world, what you described is not an aberation or confined to a few bad apples, it is commonplace and pervasive.This is not to say that there are no "good people" but rather that our national sense of honor, fairness, truthfulness and professionalism are largely gone - sacrificed on the altar of greed, gross materialism and selfishness.

Many business executives are corrupt, many accountants and lawyers can be bought, our regulatory apparatus is crippled and the politicians of both parties facilitate it because it pays!!

I'm not sure what the solution is but it is surely NOT MR.PITT. I think you have to get the power of money out of politics and have real penalties (read jail ) for those whose greed damages multitudes of innocent U.S. citizens. Or perhaps a very sick stock market will energize institutional investors and other to demand REAL REFORM. I am not optimistic.

robert simpson
basking ridge, new jersey 07920


Dear FRONTLINE,

Bigger Than Enron is the type and factual journalism that I have been looking for, but, Frontline had the guts to give the facts without concern of political influence.

Investors are being ignored by both corporate management and our elected representatives. The program also mentions the billions it has cost these firms including investors and employees resulting in the lack of credibility now existing in the financial markets now. Keep up the good work!

Jerry Harding
clemmons, nc


Dear FRONTLINE,

Again you have covered or more correctly uncovered the dirty secrets of "Corporate America" and their strangle hold on our American Political and financial systems. While the main stream press continues to present tabloid journalism by the truck load your extremely well investigated report on these issues should serve as a wake up call to all American's that if we do not participate and care about politics we too could loss everything; including our American way of life.

This is just the tip of the iceberg that we are heading directly toward. The system of Justice in this country prosecutes and penalizes the most trivial peccadilloes because those defendants are "poor", however the affluent CEO's with Directors of Boards of "corporations" that are stealing billions of dollars with the approval of Congress, those elected to protect all Americans, and yet not one has served any jail time for a "crime" that has damaged and will continue to effect millions of people for many years to come. This is hypocrisy! Corporations have become the de facto Government in this country and that has to be changed! Now!

Keep up the good work.

Scott Remington
washington, dc


Dear FRONTLINE,

Excellent program. To me it seems like Arthur Levitt is relishing this moment to say "I told you so" and appear absolved of any responsibility for the mess. Several times he admits to caving to pressure from lobbyists and Congress and saying that he would not do the same thing again. Well to me, that kind of retrospective morality does not absolve him. Instead, I think it makes him one of the most responsible.

The other players were acting on the interests they were paid to represent. Mr. Levitt is paid by the American people precisely to protect us from this kind of corruption and he chose to look the other way to save his job. If his principles told him he was right, he should have been willing to lose his job before betraying them. But instead of appearing apologetic, he seems to be grandstanding to say how right he was.

cincinnati, ohio


Dear FRONTLINE,

Bigger Than Enron and the DotCon program of a few months ago are extremelly important programs and yet I could only detect one showing of each.

There is no chance to alert others of something they should see. This is a shame.

Gary Young
aliso viejo, ca

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