The Multinational Monitor

May 2002 - VOLUME 23 - NUMBER 5

T H E    L A W R E N C E    S U M M E R S    M E M O R I A L   A W A R D

THE LAWRENCE SUMMERS MEMORIAL AWARD*



The May 2002 Lawrence Summers Memorial Award* goes to Enron. It seems almost unfair to kick a company when it is as far down as Enron, but the judges felt they had no choice when they came across reports on an April company filing with the Securities and Exchange Commission.

As reported in the Wall Street Journal, the company said it could post a write-down of its assets by about $14 billion and “attributed a ‘material portion’ — about $3 billion, according to one person familiar with the situation — to ‘possible accounting errors or irregularities’ prepared by prior management and reviewed by [Arthur] Andersen.”

The Summers award was designated for this eye-popping quote in the April SEC filing: “No party should rely on any previously reported financial information of the company prior to the commencement of Chapter 11 cases, nor should any reader of this operating report place undue reliance upon the information contained herein.”

Source: Mitchell Pacelle, “Enron May Post $14 Billion Write-Down,” Wall Street Journal, April 23, 2002.

Thanks to Andrew Wheat for directing our attention to this story.

*In a 1991 internal memorandum, then-World Bank economist Lawrence Summers argued for the transfer of waste and dirty industries from industrialized to developing countries. "Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?" wrote Summers, who went on to serve as Treasury Secretary during the Clinton administration. "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I've always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City." Summers later said the memo was meant to be ironic.