Enron Ethics
Some folks in high places need a big dose of honesty and integrity

Ethics are a big concern these days on both state and national levels. Nationally, we hear about corporate greed and deception in the Enron debacle. In Kentucky, we’re finding that payoffs and bribes have been a way of life among some in the state Transportation Cabinet.

In a very real way, these kinds of problems hurt our society. The stockholders and employees of Enron were apparently betrayed by some of that company’s executives. It appears these dishonest executives used and manipulated inside information to rip off their own company. One executive allegedly took $4 million of Enron stockholders’ money in less than a week this way.

In Kentucky, there’s now an “internal process audit” of the state Transportation Cabinet. Some state officials allegedly have been asking for kickbacks, extorting money from contractors and other illegal activities. Now the FBI, the Federal Highway Administration and other agencies are involved in this investigation. This is serious stuff.

These are examples – one in business and the other in government – of a betrayal of trust. Unfortunately, there are liars and cheats out there and some of them are in high places.

I found this out early. My grandfather was a small-town builder, who once was hired to build a barn for the superintendent of his church’s Sunday school. The superintendent always sat in the front pew of the church and enjoyed his status as a pillar of the faith. My grandfather had the building materials delivered to the site. When it was time to start construction, he found that everything had been stolen.

“I have no idea what happened to that stuff,” Mr. Sunday School said. “I went to town and when I came back it was gone!”

New materials were delivered a few days later and my grandfather’s crew started building the barn. One day, as grandpa walked by a smaller barn on the property, he noticed a pile of fresh lumber had been neatly stacked just inside its doorway. He had discovered the stolen building supplies.

Of course, Mr. Sunday School “didn’t know how it got there.” Grandpa said nothing of the matter to members of the church. But he did get his materials back – and he decided to take his family to a different church.

We find the equivalent of “Mr. Sunday School” in some pretty unlikely places, as well as some likely ones. Until problems with stock prices developed, few people at Enron distrusted the guys sitting in the “front pew.” Likewise, many of our leaders felt things were fine in the Transportation Cabinet until the federal government started investigating things.

Keep in mind the actions that my grandfather took following the barn-building incident. He didn’t abandon his faith, but he did change which church he attended. Having been spooked as the result of the Enron scandal, stockholders have gotten out of the market and put their money elsewhere. For those companies that are honestly run, it’s unfair fallout from one company’s scandal.

Likewise, the Transportation Cabinet scandal can cause people to “change congregations.” Kentucky is blessed to have several vital interstates passing through it. If a business is considering Kentucky as a place to build or locate, problems with the administration of these highways could be viewed as making our state unfriendly to business. (This scandal will certainly be pointed out to such companies by other states courting their business.) Kentucky needs good-paying jobs and solid corporate citizens. Corrupt officials in the Transportation Cabinet could play a big part in sending those jobs elsewhere.

Fortunately, our state is taking positive steps to prevent future scandals. Just as fortunate are plans being discussed within the federal government to prevent another Enron rip-off. I hope that in all of this, the prosecution of those people who violated the trust of taxpayers and stockholders is just, swift and severe.

Claude Hammond is editorial director of The Lane Report.
editorial@lanereport.com

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