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Former Enron CFO Andy Fastow discusses ethics and career

Written by lin_vict on . Posted in News

By Lacey Nemergut

On Monday, April 22, the Bentley University Academic Integrity Society (AIS) hosted Andy Fastow, the former Chief Financial Officer of Enron Corporation, who pled guilty to two counts of wire and securities fraud and served six years in prison. Students filled the Koumantzelis Auditorium to hear Fastow and a distinguished panel of the Bentley community discuss the grey area of fraud presented by the Enron case. Tickets for the event were sold out within 10 minutes of their release.

“I’m guilty,” said Fastow, who refuses compensation for his talks. “That’s why I’m here.”

The presentation began with details on how Enron impacted all stakeholders. $40 billion was lost in market value, pensions were destroyed, and thousands of jobs were lost. Ultimately, the downfall led to Sarbanes Oxley.

“Accounting is not black and white,” said Fastow, describing the grey area of what can be considered fraud. “The world outside of accountants thinks of it as black and white. You’re mostly taught about the black and white situations. Those situations don’t really happen too often. It’s the situations that are far more insidious where you might think you’re doing the right thing.”

Fastow discussed the use of off balance sheet debt, operating risk and pension assumptions that can greatly impact a company’s balance sheet. Though he had all transactions approved by a legal team and department of accountants, he pled guilty to fraud.

“The people we think are gatekeepers are also enablers,” said Fastow, in reference to the questionable approvals and oversight. Those responsible for maintaining business ethics are also motivated to make profits.

Patrick McGoldrick, president of the AIS, first contacted Fastow through a connection with the Center for Business Ethics. The process began with an email sent on Jan. 23, and ended with a committed response in late March.

“As the point of contact with Andy, I was relentless in my approach to get him to agree to come to Bentley,” said McGoldrick. “I shared with him our vision to have him explain to students the intimate details of what happened in the Enron collapse and for him to explain the challenges of being a CFO for such a prominent company.”

“Patrick is a relentless pitbull,” said Fastow. “I tried not to come here and he wouldn’t allow me to say no. It’s because of his persistence that I’m here.”

AIS first chose Fastow given the level of salience at Bentley on the topic of Enron. Freshmen are first introduced to the company during the early weeks of GB 112.

15 minutes after releasing the tickets on their Facebook page, the Academic Integrity Society had over 100 people on the waiting list. Though faculty had a keen interest in hearing Fastow, AIS made the decision to only allow students to reserve tickets.

“In the end we made this decision because we didn’t feel right denying students admittance when it is their student activity fee that allowed us to bring Andy here in the first place,” said McGoldrick.

“Our organization is committed to making this an annual event in which we bring a speaker of similar caliber to campus for the student body,” said McGoldrick. “Our team has already begun working on candidates for next year and is already having preliminary discussions about these speakers.”

AIS would like to thank Ellen Snedeker for her support and guidance throughout the process.

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