[ Posted Thursday, January 24, 2002 ]

bad energy

AS PIOUS JOURNALISTS CLUCK OVER THE ENRON MESS, THEY'VE FORGOTTEN HOW THEY HELPED CREATE THE BEAST.

BY CLIVE THOMPSON | It's amazing how nice journalists can be about Enron. The company is clearly an enormous nexus of corruption and lies, yet the pile of clips I've got here on my desk are all positively sunny.

Take, for example, this Dallas Morning News piece — where a headline brands Enron a "global e-commerce leader," and the reporter gushes over how Enron is "a global go-getter" that has "created a corporate culture that rewards risk-taking." Or how about this one from the Houston Business Journal? Writer Jim Greer describes Enron as "sizzling" (twice in three paragraphs), and warmly notes that "Enron has shown a widely recognized knack for innovation that consistently generates additional sources of revenue, potential profits and more capital." Then there are the raves from the The Wall Street Journal and The New York Times, the latter of which glowingly describes Enron's president as an "idea machine." The list goes on and on and on — and if you include the mess of plaudits from New Economy bibles like The Red Herring, it'd take an hour to read this pile of fluffy PR.

Given that Enron is about to collapse in the biggest corporate scandal in years, what's going on? Why so much sunshine?

Because this stuff was all written back in 1999 and 2000, when Enron was receiving almost nothing but uncritically good press. Things are different now, of course. Reporters in the last two weeks have been incredibly tough on the company, digging through its financial records and Elizabethan web of political cronies. They're finding all manner of dirt. Muckrakers have exposed the enormous number of political checks Enron cut (for a grand total of 71 senators and 188 congressmen). Pundits have bemoaned the way Enron commandeered Dick Cheney's task force on energy deregulation. Reporters have grimly tracked the way that former Enron CEO Kenneth Lay sold off his company stock steadily over the last year, making out like a bandit while warmly assuring guileless employees and investors that the share price wasn't about to collapse. Today's reporting on Enron is the epitome of excellent business and political writing: thorough, nuanced, and committed to the public weal.

All of which raises the question — where in hell was this critical acumen back when it was actually needed? Why wasn't anyone paying attention to Enron's shenanigans before its executives systematically fleeced the American public and walked off crowing into the sunset?

Sure, Enron is a political scandal — but it's a journalistic one, too. Editors and writers were asleep at the wheel, for some truly humiliating reasons.

Before we go further, let me offer a caveat. It is, of course, easy to take potshots at journalists now. Enron's true nature would have been a difficult story to untangle before the government began demanding it cough up internal documents, as it is now. Like they say, hindsight is 20/20.

But please — this stuff wouldn't have been that hard to figure out. The company's freakishly tight political connections were as plain as day, had any major editors really bothered to worry about this. And while Enron's book-cooking was quite secretive, there were analysts who'd been regularly warning about the company's through-the-looking-glass financial statements, such as John Olson of the Sanders Morris Harris Group. But journalists didn't pay attention to him until it was far too late. In the last three months of Enron's collapse, Olson has clocked 167 quotes in the Dow Jones Interactive database, as reporters rush — too late — to find out what he had to say; but he'd been consulted only 150 times in the previous decade. And if you want some truly grim warning signs, consider that Enron was trying to get into pornography last year. I mean, porn? Why weren't business and political writers picking up on this stuff?

Because they helped create Enron. Indeed, to read this old Enron coverage is to revisit the journalism of the dot-com boom — some of the most cringing and obsequious media ever produced. Like high-school yearbook poetry, it's painful just to look at. From 1995 to 2000, reporters gave a remarkably free ride to some amazingly unsupportable businesses, and it was pretty clear they'd sort of been smitten by a combination of smoldering envy and admiration — a powerful Stockholm Syndrome. Indeed, journalists I knew wanted to jump camp. They spent their evenings in bed staring at the ceiling, gnashing their teeth about the cocky 20-something insta-millionaires they'd just profiled, and angsting over whether to join "this hot new startup" they'd heard about. Several actually did join dot-coms, and as a part-time business writer, I felt that twitch myself.

This was not an environment where critical journalism thrived. And that spelled big trouble for the public, because let's face it — corporations like Enron will always lie and dissemble and cook their books. Hell, it's practically federally required by law, insofar as investors can sue you if you don't keep your stock price pumped. Journalists are an important countervailing force that keeps these corporations accountable.

Granted, now that the bubble has popped and the easy riches are over, reporters are once again — finally — becoming more disinterested students of corporate activity.

But as we read each new day's fresh record of Enron actrocities, as we cluck over the mess, we might well reflect on our role in it. Without good journalism, investors and the public can be easily screwed — and they were.

Clive Thompson is an editor-at-large for Shift magazine. He writes for Entertainment Weekly, The Washington Post, and Nerve.