Magazine article Insight on the News

Enron Casts Dark Shadow on Academe. (Political Notebook)

Magazine article Insight on the News

Enron Casts Dark Shadow on Academe. (Political Notebook)

Article excerpt

As far as the Ivy League schools go, and at least one of their equivalents on the other side of the Atlantic, the last two weeks have been one big red-faced embarrassment -- and it goes by the name of Enron.

The parade of Enron executives and Arthur Andersen auditors up on Capitol Hill has included a fair sprinkling of graduates from some of America's finest and most elite colleges and universities. Their Fifth Amendment pleadings and their laments of "I saw no evil and heard no evil" provoke the question: What exactly were they taught at Harvard, Yale, Stanford and the London School of Economics?

If ethics were on the syllabus, the lessons sure didn't sink in or weren't emphasized enough. Or maybe it was just a rotten generation? On the Other hand, their teachers hardly inspire confidence.

An instructive appearance was made on Capitol Hill by Robert K. Jaedicke, the sixth dean of the Graduate School of Business at Stanford and an Enron board director. Surely he, with all his knowledge and sharp mind, had picked up on the problems at the Houston-based energy giant ahead of the bankruptcy and raised merry hell at board meetings.

That's what you would have expected from a man who, according to Stanford's Website, was "best known for his ability to teach difficult subject matter in a clear and understandable manner" and who won awards for outstanding research from the National Association of Accountants.

But not a bit of it. Testifying before the House Energy and Commerce Committee alongside Enron's complacent former chief executive officer, Jeffrey Skilling (Harvard Graduate School of Business Administration), Jaedicke came across as a perfectly nice man who was completely out of his depth. Everything had passed him by, and Enron's gleaming 40-story skyscraper never had appeared to him as a tottering house of cards. As with others who have testified before Congress on the Enron mess, the Stanford dean sought to shift the blame, noting that if he had seen this approval sheet or that "dash" document or had any inkling of the conflicts of interest rife within the company, he would have raised an outcry -- or, maybe in his case, a timid academic squeak.

Officials at both Arthur Andersen and Enron, the soft-spoken Jaedicke said, "did not fulfill their duty to us [the board]." That looks to be true, but it didn't seem to dawn on him that he had a fiduciary responsibility on behalf of the shareholders and employees to ask probing questions, as an irate congressmen pointed out to him and fellow Enron board director Herbert "Pug" Winokur.

The professor apparently had reversed roles when appearing for board meetings, turning into the dutiful student of Skilling and former chairman Ken Lay (universities of Missouri and Houston, respectively) and forgetting his days expounding at Stanford's business school the teaching of "corporate responsibility and management ethics. …

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