Enronomics awards

["Ian Murray" <seamus2001@xxxxxxxxx>]

For Immediate Release - April 10, 2002
Contact: Betsy Leondar-Wright
(617) 423-2148 x13

<http://www.ufenet.org/press/2002/titans_adv.html>

New report: Harmful Enron practices widespread

Awards to most Enron-like companies; GE is No. 1

Download the Report (PDF, 475 KB)
<http://www.ufenet.org/press/2002/Enron.pdf>

"Titans of the Enron Economy: The 10 Habits of Highly Defective
Corporations," a new report by
financial analyst Scott Klinger, reveals that key maneuvers leading to
Enron's meltdown are legal and widely practiced.

The report ranks the worst companies in 10 categories and gives Enny
Awards to companies that exemplify Enron's harmful behavior in each area.
The 10 habits encompass profits won through political influence,
corrupting the watchdogs, tax dodges, undue risks for workers and
excessive rewards for executives.

The Enny Awards winners are COCA-COLA, CITIGROUP, EMC CORPORATION, AOL
TIME WARNER, RAYTHEON, BOEING, LUCENT, HALLIBURTON, WORLDCOM, and the
financial services industry, represented by CITIGROUP and MBNA.

A special Lifetime Achievement Award goes to General Electric for scoring
the highest average rank across all 10 bad habits, the only company to
outrank second-place Enron. GE exceeds Enron's score by an astonishing
45%.

Much of the 1990s stock market boom was fueled by Enronesque accounting
tricks that are perfectly legal. More than a third of corporate earnings
growth from 1995 to 2000 stemmed from the practice of not treating stock
options as expenses. For example, Lucent's earnings would have been
reduced by 30% from 1996 to 2000 if stock options had been expensed.
Corporate political contributions and lobbying encouraged lax rules, with
Enron's price-gouging energy deregulation being only one example.

To break the 10 bad habits, the report proposes a 12-Step Recovery
Program: stronger disclosure requirements, independent auditors and
boards, rotating auditors, progressive corporate taxes, diversified
retirement accounts, earnings statements that expense stock options and
exclude pension fund gains, balancing the interests of stakeholders,
limits on government subsidies of foreign investments, banning company
loans to executives, and ending taxpayer subsidies for excessive CEO pay.

All 10 Enronesque habits and distinguished Enny Award winners are
illustrated with glaring examples in the report.

                      AND THE ENNY GOES TO...
1.      Retirement funds full of company stock... COCA-COLA
2.      Excessive CEO pay... CITIGROUP
3.      Massive layoffs while executives make millions... LUCENT
TECHNOLOGIES
4.      Cozy insider boards... EMC CORPORATIONS
5.      Excessive board compensation...AOL TIME WARNER
6.      Auditors whose consulting contracts create conflicts of
interest...RAYTHEON
7.      Hefty political contributions to buy access... The financial
services industry; Accepting the award for the industry are CITIGROUP and
MBNA
8.      Lobbying for legislative favoritism... BOEING
9.      Corporate welfare to finance dubious overseas
investments...HALLIBURTON
10.     Avoidance of corporate taxes... WORLDCOM

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Scott Klinger is co-director of Responsible Wealth at United for a Fair
Economy. A Chartered Financial Analyst, Klinger previously was an
investment officer at United States Trust Company and vice president at
Franklin Research and Development.

United for a Fair Economy is a national, independent non-profit that
spotlights growing economic inequality and advocates solutions for shared
prosperity. The report is available on the web at www.FairEconomy.org.
Hard copies are available upon request.