Blowing the Whistle: Reporting Wrongdoing in the Workplace
Enron, one of the world's leading electricity, natural gas, communications, and pulp and paper companies, was a high-powered success story. Rated “America’s Most Innovative Company,” with some twenty thousand employees, Enron reported nearly $101 billion of revenues in 2001.
Early in 2001,
questions about Enron’s earnings and accounting practices began drawing outside attention. In April of that year, the company’s newly promoted CEO suddenly quit after only six months on the job. In August, the company’s vice president for corporate development sent an anonymous letter to the then current chairman and CEO expressing very grave concerns about Enron’s accounting practices, followed by another lengthy letter delivered in person. Unfortunately, by the end of the year, it was apparent that a major “innovation” at Enron was their sophisticated, systematic accounting fraud.
Within a few years, the award-winning company was worthless and its leading executives faced trial. The Enron scandal, as it came to be known, toppled a leading accounting firm, and led to increased government scrutiny of other major corporations, and eventually, to new federal legislation for accounting reform and investor protection.
The vice president who initially attempted to alert the chairman of Enron was named a “Person of the Year” by Time Magazine in 2001, along with two others who reported irregularities in their respective places of employment. 2001, said Time, was “The Year of the Whistleblowers.”
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