Peter Elkind Discusses ‘Rise and Fall’ of Eliot Spitzer and Enron

When It comes to regulation in Washington, "government alone doesn't particularly do the job very well; regulators are often under funded, underpaid, short on energy and short on initiative. “Eliot Spitzer, who is an exception to the rule, fell down for other issues." With that last sentence, journalist and author Peter Elkind had the crowd at the 2011 fi360 Conference, in San Antonio on Friday, in the palm of his hand.

Elkind, speaking about “Business Ethics and Washington Regulation” before this gathering of fiduciaries, is editor at large at Fortune, and author of a number of books. He co-wrote "The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron," (Penguin, 2003), with Bethany McLean; and wrote "The Death Shift: The True Story of Nurse Genene Jones and the Texas Baby Murders," (Onyx, 1990); and "Rough Justice: The Rise and Fall of Eliot Spitzer," (Portfolio Hardcover, 2010). Both the Enron book and the Spitzer books have been made into movies.

Enron: A 'Culture of Corruption’

At Enron, “Jeffrey Skilling [Enron’s former president] creates a culture of corruption, does things that people don't understand,” Elkind said. “One lesson is, when people are doing things,” that can't be understood, "run the other way." Elkind went on to say that at the doomed company, a culture of “corruption” was led by executives at the very top.

Most surprising, Elkind told AdvisorOne in an interview after his keynote speech, was that, “it wasn’t about the numbers, it was about the personalities and how a charismatic leader can infect an entire corporate culture.” He added, “Skilling was much more actively malevolent. [CEO and Chairman Ken] Lay sat back and got all the perks of office and watched it all happen—kept it going until the bitter end.”

Although Lay was found guilty, as was Skilling, Lay “never went to prison,” Elkind noted in his speech, because “he died before he started his sentence.” And, since he "went to his grave before exhausting his appeals," Elkind continued, Lay was "not convicted in the record books." Skilling, convicted in 2006, did go to prison, Elkind said in the speech.

"Corporate culture," plays a part and "if a guy like Skilling hires people willing to go along with him on things," bright, but passive, that makes a difference. "It's really a story about the power of the CEO," Elkind asserted.

Is He Actually Dead?

As with Elvis, there is some speculation that Lay is “not dead,” and there is even a website, “KenLayisAlive.org,” devoted to Ken Lay sightings—according to Elkind. According to the website, Lay may be living in Cuba, impersonating Fidel Castro.