Enron’s Rex Shelby Sentenced

April 17, 2011 at 2:17 pm (Uncategorized)
Tags: enron, Houston, shelby rex

The last of the seven Enron prosecutions,

Shelby was one of seven former executives first indicted in 2003, all accused of scheming to exaggerate the capabilities of Enron’s broadband network in order to impress analysts and inflate company stock….

Enron, once the nation’s seventh-largest company, filed for bankruptcy protection in December 2001 after years of accounting tricks could no longer hide billions in debt or make failing ventures appear profitable….

The collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans….

Shelby is also forfeiting $2.6 million and is responsible for completing 230 hours of community service.  Does that make up the loss of retirement savings for suddenly jobless employees who worked for years, even decades, to end up with pennies on their retirement fund dollar?

Enron’s shareholders lost $74 billion in the four years before the company’s bankruptcy ($40 to $45 billion was attributed to fraud).

More than 20,000 of Enron’s former employees in May 2004 won a suit of $85 million for compensation of $2 billion that was lost from their pensions. From the settlement, the employees each received about $3,100.

Not even close.  How far does $3k go these days, anyway?

Of the six others who were also indicted in the case, three received prison sentences ranging from 16 months to 27 months, one was given one year’s probation as well as home confinement, one was acquitted at trial and one had charges dismissed.

Change the scenario.  It’s not corporate fraud anymore.  It’s straight up theft from the retirement fund and of money owed to creditors.  Exact same outcome.  And just for kicks, lets make the perpetrator black.

Do you think he would have gotten probation?  Me neither.

But Mr. Shelby isn’t responsible for the entire downfall of Enron.  And whatever the term, sending him to prison won’t fix anything that was broken by any of his actions or inaction.  On the other hand, that could be said of an awful lot of crimes, no?

I like the idea of a huge amount of community service, actually – and with the cuts to libraries, parks, schools and, well, everything, maybe community service could be used to pick up some of the slack.  No, I don’t want criminals at schools – I’m thinking more along the lines of fixing the playground or working on the landscaping on the weekends.  I know that people doing  community service are currently used to shelve books at the county libraries, which is fantastic.  Everyone benefits.

Plus, anything creative and effective we can do to keep nonviolent criminals out of prison is fine by me – and it saves a lot of money because housing people in prisons and jails is a spendy proposition.  It’s not just food and space, but medical care, building upkeep and overhead, and staffing that need to be taken into consideration.  And that way, offenders who have jobs wouldn’t be forced out of them by their incarceration as is so often the case.  Criminals with no jobs have less of a chance of abiding by the law that criminals with jobs.  That’s not scientific, it’s just common sense.

That said, some crimes, even nonviolent property crimes are so offensive to society and so damaging, that probation just isn’t enough.  Like Bernie Madoff, for example. I don’t know enough about Shelby to know how key he was to the fabricated build-up and violent implosion of Enron to know if he was more or less culpable that the others who went on trial, but I do know that what those executives did was morally shameful and affected tens of thousands of people who could not afford the losses forced on them by the downfall of Enron.  And for that, those responsible do deserve at least a token, symbolic, amount of incarceration.