Academic journal article Tamara : Journal of Critical Postmodern Organization Science

ENRON: Taking Our Cue from the World of Object Relations

Academic journal article Tamara : Journal of Critical Postmodern Organization Science

ENRON: Taking Our Cue from the World of Object Relations

Article excerpt

ABSTRACT

As a boy, summering with his extended family in Kennebunkport, Maine, George W. Bush was Boss Cousin: the oldest in a swarm of his own brothers (and sister) and the sons and daughters of his aunts and uncles. They played games all day, from tag to tennis to basketball. George, one of the players told me years later, very much liked to win - and, as oldest siblings always do, wrote the rules (or rewrote) them to guarantee it. That's the way he prefers to operate even now. Karl Rove, the president's longtime political consigliere, calls them 'game-changing moves'. Bush likes to outmaneuver his foes by using his clout to change the game itself. It's worked many times. (Fineman, 2002)

INTRODUCTION

Following the debacles of Enron and World-Com, U.S. President George W. Bush signed the Sarbanes-Oxley Act on July 30, 2002. The Act is "a sweeping corporate reform bill" and aims to "reassure investors of the trustworthiness of corporate America" (BBC News, 26 July 2002). According to Bush, "Corporate officials will play the same rules as their employees" (White House, press release 2002a, italics is our added emphasis). Like the introductory quote from Fineman implies, Bush believes by changing the "rules" of the "game" reform to can be achieved to curtail corruption and fraud in corporate America. Under the new legislation the accounting industry is to be brought under federal supervision.

Some regard Bush as being forced into a role of corporate enforcer by the succession of scandals that began with Enron last December and have since widened with the disclosure of 'accounting irregularities' at Global Crossing, Tyco International, Qwest Communications and WorldCom, among others. An election looming, we find both Democrats and Republicans joining the chorus-line for such reform. Much of this chorus-line arguing for changing the "rules" of the "game" and using imagery as though corporate behavior was indeed a matter of game playing. Equally, some have been quick to point out the inconsistency, contradictions and limitations of Bush's solution. For example, The Wall Street Journal, a voice of capitalism if there ever is one, published an article suggesting that Bush's own behavior in industry weakens his position on corporate responsibility. While Bush was a member of Harken's board of directors, Harken Energy Corporation created an offshore subsidiary in the Cayman Islands to avoid U.S. federal taxes (Hitt, 2002). Companies in the Caymans defer U.S. taxes as long as profits are kept overseas. According to the President's press secretary, the Cayman deal, whose primary purpose was not tax avoidance, clarified "legal-liability questions for the Bahrain project" (Hitt, 2002, p. A4). According to a member of the opposition, Democratic party, Bush's support for the new rules of Sarbanes-Oxley Act is weakened by his previous industry activities at Harken.

Some political observers have some doubt as to whether the President actually has the power to change the rules of the game through just one Act. For example, Howard Fineman, writing in Newsweek (2002), suggests that even Bush might not be completely in control and aware of the various power dimensions involved in changing the rules. The Bush clan, and in particular George, may be used to writing the rules (or rewriting) them to ensure he won, but Fineman argues:

"it's a different story inside the Beltway. In Washington, at least, the president has lost the power to write (or rewrite) the rules of the game. ...

"Bush has lost the power to write the rules of the game for a more profound reason. There are simply too many complex games going on at one time. Fate has decreed that Bush - a solid, cautious man who likes to have the odds on his side - must deal with an era of profound challenge and change. Too many new rules need to be written for him to have power to wnte them all." (Fineman, 2002)

To understand Enron and the Bush administration response to it, and other corporate corruption and fraud, many social scientists would be drawn to macro-level explanations. …

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