The Ethical Dimensions of the Enron case
Kevin Maher ’04

On April 3 in the Connelly Center Cinema, the Ethics Program of the College of Arts and Sciences and the Ethics and Social Responsibility Committee of the College of Commerce and Finance combined in their first joint venture to bring Ronald Duska, Ph.D., the Charles Lamont Post Chair of Ethics and the Professions at The American College, to discuss “The Ethical Dimensions of the Enron Case.” Discussants following Duska included the Rev. James McCartney, OSA, Ph.D., associate professor of philosophy, David Shaffer, assistant professor of finance, and Nicholas Rongione, associate professor of business law.

Duska opened speaking of a critique Socrates delivered of a teacher, Protagoras, who was offering empty teachings merely for the sake of making money. Referring to Protagoras as an accumulator, Socrates explained that devotion to accumulation for its own sake was comparable to losing one’s own soul and that since one’s soul should be their defining purpose, it can be reasoned that souls can be corrupted. Now while it might be conceded that not all accumulation is corrupting, an accumulator turns every quality of art into a means of obtaining wealth and this they conceive to be their end. Thus, accumulators “get intent upon living only, and not living well,” and in doing so, destroy “real” wealth, as well as lose a sense of limits.

Just as Protagoras lost his direction, Duska insisted, it was when Enron lost its sense of what it was that it got corrupt. Speaking of corporate monomania, he noted how Enron only made vague references as to what it did and what its goals were, pointing out how they believed they sold “the future” and “simply wanted to be the world’s leading company” with little further information or specifics. Duska claimed that by playing the role of accumulator, Enron forgot what it was about and its leaders sold their souls merely for accumulation.

Citing the American Institute of Certified Public Accountants Statements on Auditing Standards, Duska selected recently revised changes and discussed how they influence an auditor’s mission. He maintained that an accountant has a responsibility not to the client, but to the general public and that Anderson too lost its direction in overlooking errors to earn high fees. Duska concluded with a quote from a 1932 lecture on business ethics, “The accountant must insist upon absolute independence of judgment and action.” The quote was from Arthur Anderson himself.

McCartney supported Duska from a philosophical and ethical standpoint by explaining that the way we define ourselves is the way we live our lives. Since Enron could not even define itself, he wondered, how Enron could put it into practice. He cited this lack of mission to advance as an excellent example as to why ethics is necessary in business.

Speaking from a financial perspective, Shaffer put great weight on the objective of an organization. Saying that Anderson didn’t have a clear picture, he assured that “growth is not an appropriate objective for an organization” and that some of Anderson’s senior management may have felt otherwise.

Rongione continued on a similar note insisting, “Unless you know what your purpose or goal in life is, you’re going to lose your way.”

Duska agreed with the responses, adding that human beings can be expected to be human beings but encouraged the removal of as much temptation as possible.