The Enron Debacle
An Evangelical Christian Perspective: The Enron Debacle by Pastor Brad Winship
Accounting audits are required by the SEC in order to check the natural proclivity corporations have toward misreporting earnings. But what if the accounting firms are in cahoots with the corporations? Let’s not forget that accounting firms have a bent toward appeasing their corporate customers. Do we then turn to the government as the watch dog? Couldn’t corporations simply throw that dog a steak and sneak past the system? How can the government be impartial in this era of enormous campaign donations from corporations?
It is often assumed that the American principle of checks and balances is based on the concept that the greed for power of one group will check the greed for power of another. For instance, accounting firms will be motivated to be honest because, in their business, integrity brings financial rewards. The politicians will be motivated to be honest because they desire votes from the people. Corporations will submit to the government and auditors because they want to maintain a good image before investors. Funny, none of this worked in the Enron case because if each of the “checks and balances” are greedy for power, each can conspire together to cheat the public.
The American principle of checks and balances is actually based on the concept that if one group is evil, a righteous group has power to correct the wrong. If the executive branch of government is corrupt, a righteous legislative branch or judicial branch can correct the evil. Our founding father’s understood and feared the possibility of all three branches of government plus the populace becoming corrupt. All the checks and balances put into place are meaningless if there is national moral decline.
Ancient Israel was faced with this morbid situation. The prophet Jeremiah declares, “ The prophets prophesy falsely, and the priests rule on their own authority; and the people love it so . . . for from the least of them even to the greatest of them, everyone is greedy for gain.” Both the politicians and preachers were corrupt and, amazingly, the people wanted it that way. All of the checks and balances had gone awry.
It is feasible to envision America falling into the same abyss–an America where everyone wants to play the Enron game. Payoffs and shady accounting practices could be the norm, and even the small investor would enjoy playing the market like a game of poker.
The lesson to be learned from Enron is that for checks and balances to work, there must be a moral foundation in society. There must be righteous people in America for our nation to succeed. Materialists wrongly suggest that a mere balance of power is the answer. Therefore, they look immediately toward the government as the solution. However, more government is not a sure remedy. There must be a deeper moral consciousness that pervades American businessmen. If this existed, taxpayers would not have to be burdened with layers and layers of government oversight.
The needful moral consciousness does not come about by money, votes or government programs, but by individuals putting their faith and love in God. Evangelical Christians believe that good laws and oversight are necessary in avoiding another Enron debacle, but at the core of the permanent solution is man’s relationship with God.