Review: Conspiracy of Fools–A True Story (Hardcover)

5 Star, Capitalism (Good & Bad), Corruption

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5.0 out of 5 stars Inspired detail on corporate stupidity and dishonesty, government incapacity,

January 12, 2006
Kurt Eichenwald
There are some superb reviews here that I will not replicate. Here are a few things that jump out at me:

1) This author sets the gold standard for investigative journalism and non-fiction authorship. 1000 hours of interviews, 200 three-ring binders, and a gifted ability to communicate extremely complex issues. Perhaps more pointedly, the author shows what a good solid investigation can produce in the way of facts and context and understanding, to the point that one wonders why the government cannot do as well.

2) This book confirms the author’s earlier findings as documented in “The Informant,” to wit, the government does not take enforcement seriously, and lets very bad people off with very minor sentences. When combined with the books on “The Cheating Culture,” or “The Soul of Capitalism,” or “Rogue Nation,” what we see is a complete break-down of ethics in business–Wall Street business, not Main Street. Enron, and then WorldCom, are the poster children of greed run amok. The profligacy of Enron is quite amazing—they paid 25% to 100% above the industry average in salaries, and made huge deals with falsified projections of future profit that were used to hemorrhage tens of millions in cash bonuses to key Enron managers.

3) Neither Arthur Anderson nor the government did their jobs. Arthur Anderson “sold out” and as the author concludes, deserved to die a corporate death penalty for its malfeasance. The government, for lack of deep economic understanding among key staffers, allowed itself to be manipulated into opening the door for Enron to cook its books.

The level of detail in this book is extraordinary, and I find that it softens my view of Ken Lay and others in a substantial way. One can see how they were drawn in, how the context led them to make bad uninformed decisions, avoid due diligence, avoid holding corrupt officers to account. This is a deeply human story, full of failings at every turn.

I put the book down reminded of the Long-Term Capital Management (LTCM) scam that stole billions from the public, and then the series of scams outlined in this book. To that one can add the very negative findings outlined in “Crossing the Rubicon,” where the author documents $3 trillion stolen by Wall Street from Main Street and the public.

It is possible to conclude that between the illicit profits of the overtly criminal gangs in the US, and the illicit profits of the covertly criminal Wall Street high-flyers, that the USA is as close to being a narco-crime state as is Colombia or Afghanistan. We have a superficial semblance of order and freedom and good living, but it is a Potemkin Village. We are being hollowed out as a Nation. This book is as close as I have seen to a medical diagnosis of all that is wrong with Wall Street and the very large corporations.

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Review: The Informant–A True Story

5 Star, Crime (Corporate)

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5.0 out of 5 stars Sets a New Standard for Investigative Reporting,

February 27, 2002
Kurt Eichenwald
The level of detail in this book is extraordinary, as is the meticulous documentation of sources. Even the index is surprising in both its presence and its quality.A few little gems jump out at me from all the detail:

1) Corporate corruption appears to not only be routine, but massive among more industries and companies than we might believe.

2) The government does actually try to regulate and prosecute, but this is both very expensive, and appears to result in the public *not* becoming conscious of the mis-deeds–no massive boycott, for example, seems to result.

3) The executives that conspire to cheat the public are remarkably ignorant. I was stunned to read how one of the principals in this story fell victim to what I thought was a really well-known Nigerian scam for defrauding numerous Americans of tens of thousands of dollars each, claiming that it will “release” millions in hijacked funds from the national bank.

4) The government often mistreats its own people. I was especially troubled, having seen employee abuse at other national agencies, when the book related how a senior FBI agent was not allowed to transfer–and save his mental health–because of his boss’s selfish interests.

5) Lastly, I was left with the impression that there is an elaborate dance that goes on between the very expensive top law firms that protect corporate criminals, and the government. While the government seems to have worked hard on this one, the general impression that is left is that the normal drill when the public has been defrauded of hundreds of millions of dollars, is for the culprits to plead “no contest” and agree not to do it again–in return for token fines and guaranteed immunity.

At the end of the book I was left feeling dismayed at the depth and breadth of corporate corruption, at the general inadequacy of government in keeping the private sector economy honest, and at the lack of alternative public advocacy devices for truly focusing public spotlights such that fair pricing and fair practices are widely understood and enforced by customers, not just under-funded over-worked oversight bodies.

Although the book is very very long at 629 pages, I would have liked to see an author’s epilogue titled “What Is To Be Done?” The author of this book can rightly claim to be among a select few intimately familiar with this problem in a manner no book by itself could communicate, and so a public policy analysis, some sort of prescription, would have been a valuable postscript to this excellent, really superior, investigative report.

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