Mrs Phil Gramm is no whiner

Wendy Gramm has no regrets

The former Enron board member cashed out early after rigging the system to let the company run wild. Now she's arguing against changes in the rules that might prevent future corporate disasters.

http://dir.salon.com/story/tech/feature/2004/01/28/wendy_gramm/index.html

...You'd expect Wendy Gramm, now head of the Regulatory Studies Program at George Mason University's Mercatus Center, to recognize that the Enron board's extraordinary failure indicated a dire need for reform. You'd be dead wrong.

Gramm thinks the system works just fine. After all, she pocketed an estimated $2 million as an Enron director.

Gramm joined Enron's board after chairing the Commodities and Futures Trading Commission, where she issued regulations that legalized the type of electricity trading that helped Enron make millions in illegal profits (on Gramm's watch as a director). As a member of Enron's audit committee, Gramm found nothing wrong with accounting tricks that inflated earnings and siphoned money to selected executives in violation of company rules, if not federal laws. Coincidentally, Enron also delivered campaign cash to Gramm's husband, former U.S. Sen. Phil Gramm of Texas, and now provides that arch opponent of big government with his first private-sector job in decades at the Swiss bank UBS, which owns the rump of Enron's energy trading operations. ...

...While she preaches living by the market's risks and rewards, Gramm found a pretext to avoid that risk herself while making decisions that helped bankrupt Enron.

In 1999, Gramm declared that owning Enron stock presented a conflict of interest with her duties as a director. That assertion is pure drivel, violating basic common sense and norms of good corporate governance; directors legally bound to protect investors should be investors, too. By Gramm's logic, only non-citizens should be lawmakers or judges, so their decisions won't be tainted by having to live with the consequences.

Gramm's ludicrous claim made sense in one context: It provided a convenient alibi to cash out her Enron shareholdings for $300,000 and to insist on getting paid in cash while she was approving the company's secret steps along the financial precipice. When Enron went over the cliff, the Gramms even portrayed themselves as victims: Wendy's stand on her imaginary moral high ground led her to sell before Enron's price peaked, they whined, so she forfeited some potential profits. Enron employees lacking Gramm's finely tuned ethics, and the rest of the investing public lacking her inside knowledge of the company's twisted finances, were left holding worthless paper. ...