Silence of the Shams
by Marianna Diamos

When Enron’s long time chairman Ken Lay, entered the silent majority of the company’s former top executives who took the Fifth, he did so with regrets. “I'm deeply troubled about asserting my Fifth Amendment rights,” he told the Senate Commerce Committee. “I know it will be perceived that I have something to hide.”

For more than an hour, the senators berated an indifferent Mr. Lay, who throughout the ordeal made sure to keep his lips tightly pursed, lest some clue escape as to how the country’s seventh largest company, which he created years ago, could implode into a mass of hot air and become America’s largest corporate bankruptcy.

“You’re the most accomplished confidence man since Charles Ponzi,” said Sen. Peter Fitzgerald R-Ill, referring to a 1920s investment swindler who made millions of dollars using a pyramid scheme, where huge profits made from a make-believe company were nothing more than rechurned money collected from new investors.

Awhile back when Mr. Lay was talking, he did make the point that Enron’s high-flying financial style of numerous, off-the-books partnerships (the focus of criminal regulatory and congressional investigations) enabling the firm to keep liabilities off its financial statement by hiding billions of dollars of corporate debt in sham companies, thereby inflating profits, “was way over my head.” Well, maybe. It’s possible they didn’t teach stuff like that when Dr. Ken Lay, 59, got his Ph.D., in economics from the University of Houston.

Although, you’d think he may have picked up a tip or two from his financial mentor, Michael “milk’em” Milken, the 1980s junk-bond king who spent time in prison for financial improprieties. As reported in Matt Krantz’s article in USA Today, shortly after Mr. Lay merged Houston Natural Gas and InterNorth in 1985 and created Enron, Milken advised him “to saddle the young company with debt and then buy back stock,” apparently at one time reaching the staggering amount of 73% of its total capitalization.

Before founding Enron, Mr. Lay worked as an economist at the Pentagon during the Nixon administration, a possible starting point for his particular mixture of business and politics. During his hour of harsh senatorial criticism (when he took the Fifth), he was accused by one senator of using millions of dollars generated by Enron’s inflated stock to try and buy a “cash and carry government.” It is estimated that Enron flooded politicians right and left with campaign contributions, almost $2.5 million in 2000 alone, the bulk going to the campaign to elect President Bush, who has been known to refer to him affectionately as “Kenny Boy.”

“This isn’t a garden variety corporate failure,” said Sen. Byron Dorgan, D-N.D. “Enron masked debt and booked profit when there wasn’t any. Executives at the top made over one billion dollars in stock sales, while employees at the bottom lost everything.” About 60 separate plaintiffs have charged that Enron put out misleading financial statements, aided by its auditor Anderson, to enhance the price of their shares. It is estimated that between shareholders, creditors and employees, losses total more than $50 billion.

“To me,” said a shareholder who prefers to remain anonymous, “Ken Lay is a fiscal sociopath. He had total disregard for his employees, who couldn’t sell the stock in their retirement savings and lost everything while Lay and his cronies got away with hundreds of millions of dollars.” It has been reported that last year, Mr. Lay sold $100 million of company stock even as he was trying to persuade company employees to hold on to their shares.

Although, one Enron executive, Sherron S. Watkins, did recently testify that she personally told Mr. Lay, in August, to “come clean” as the company would soon be found out to be “an elaborate accounting hoax.” At the time, Mr. Lay promised he would do something but apparently backed off, meanwhile, exercising his stock options (unloading his personal stash of low-priced Enron stock to the highest bidder).

Another person who is talking, or at least was, is Mr. Lay’s wife Linda. “We’ve lost everything,” she tearfully told The Today Show. Bad investments… it’s all gone. All we have left is our home,” (an $8 million penthouse in Houston). Well, we’re so sorry the Lays are down to their last few mansions—if you include four houses in Aspen, Colo. worth about $28 million (they have either sold or are selling). “Who knows what else they own,” said another investor who prefers not to be quoted by name. “I’ve read they have several commercial buildings in Houston, and a residence or two in Galveston, but it’s the ones they own in partnership, where their names don’t appear on the deed, that we’ll never know about.”

Not to mention the $4.7 million in annuities the Lays purchased two years ago, around the time Enron Stock was selling at its high point of $90+ a share (now it’s 26 cents). Beginning in 2007, it guarantees them about $400,000 thousand a year of untouchable (according to Texas law) income.

But hey, he’ll survive and rise to the surface again like a blast of hot air. He’s the sham-meister and he’s got gas in high places.

Filming Ellie in NoHo
by Quentin Dunne
Passersby in the NoHo Arts District will have noticed that the normally staid historical bank building on Weddington and Lankershim Blvd was a magnet for activity from Tuesday, February 26th, to Monday, March 4th. During that time, the building was host to countless people, loads of equipment, and multiple traffic restrictions. There was also a sixty-something-year-old woman with wildly blue-streaked white hair and flaming red pants. What were they all doing there? Trying to break the Seinfeld Curse, of course.

During it's nine years on the air, “Seinfeld” was a phenomenally popular show. Since then, however, its cast members have learned lightning rarely strikes twice. While Jerry Seinfeld has kept a low profile since the show’s finale, both Michael Richards, Kramer on the sitcom, and Jason (George) Alexander have seen their own sitcoms launch and fold in the blink of eye.

Now, Julia Louis-Dreyfus, or Elaine, as “Seinfeld” fans still remember her, is hoping the third time’s the charm. She’s starring as the titular character in Watching Ellie, a half-hour NBC sitcom on Tuesdays at 8:30 pm. The show follows the travails of Los Angeles club singer Ellie Riggs as she deals with a variety of personal and professional crises. Unlike most sitcoms, however, Watching Ellie is presented in real time: twenty-two minutes for set-up, conflict, and resolution in Ellie's life and on our screen (not counting the commercials of course). If only life itself was so simple…

When any film, television show, or commercial shoots in the NoHo area, it gives a shot in the arm to the local economy and, judging from the generous craft service table and crew members seen wandering in and out of local diners, this was no exception. Yet as prideful NoHo-ers, we can’t help but think maybe a little bit of our local charm will give them a shot in the arm, in this case proving helpful in beating back the Seinfeld Curse.

Of course, the show just debuted so any calls on its success would be premature. It would not be premature, though, to note that while they were filming in NoHo, the Nielsen ratings rolled out. Watching Ellie was NBC’s most-watched Tuesday premiere since 1996 and the top-rated non-Thursday premiere among adults, 18-49. If Jerry Seinfeld should ever choose to jump back into television, he should take note that NoHo has plenty of excellent filming locations.

No need, Julia and company, to thank NoHo at the Emmys. We’re always glad to help.