Abstract: The "Appearance of Corruption" and "Pinstriped Crooks": Narratives of the Enron Scandal in 2002 Regulatory Reforms

Rosalie Genova

Abstract

Two major pieces of legislation were enacted in 2002 purportedly in response to the Enron collapse: the McCain-Feingold Bipartisan Campaign Reform Act and the Sarbanes-Oxley Act for Corporate Accountability. This was one of many occasions in legislative history when an incident invoked as proof of broader problems—here, in campaign finance and in corporate financial disclosures, respectively—paved the way for pre-existing reform initiatives. In this regard, Enron became less salient as a corporate bankruptcy and more salient as a political scandal. I argue in this paper that certain narratives of Enron's collapse, deliberately crafted toward specific political ends, led to avowals in Congress that McCain-Feingold and Sarbanes-Oxley could prevent a "repeat performance." I also explore the 2002 laws' significance (or lack thereof) for those who felt Enron signified that big business threatened the fair functioning of markets and democratic politics. I conclude by exploring how the 2010 changes to relevant law, in the Dodd-Frank financial reform bill and the Citizens United v. FEC decision, suggest continuities and differences in approaches to regulation between the "Enron era" of accounting scandals and current debates about what caused, and how to recover from, the recent financial crisis.