Lessons of Enron: would Indians do it differently?


It is about values ? about positive, community-building values. It is about whether major corporations and institutions in today's society will develop and sustain covenants that safeguard their peoples.

A good question: would Indians do it differently? Better yet: Are we doing it differently?

On December 2, 2001, the Enron Corporation, one of the largest in the world, declared bankruptcy. The huge corporation went up in a wave of accounting scandals, high-government cronyism and, worse, a tale of betrayal so disgusting that it left the country roiling with the dread of perpetual injustice.

While the company was going down, and it is alleged he fully knew it, Enron Chairman Kenneth Lay was telling his employees, many of whom had saved a lifetime of paycheck pension investments toward a safe retirement, that everything was well, that they should continue to invest in the company. He wasn't alone among managers, and Enron is not alone among the many incidents in which high-end executive managers walk away with millions of dollars in questionable bonus payments while their companies collapse on their lower administrative rank and file people.

What can be expected in the sense of social contract when company executives are so willing to sell out all their underlings, even condemning many to old age misery, while fabulously enriching themselves, gorging on the corpse of their supposedly common project?

This is clearly a problem for America, and a recent study details how it is also, increasingly, a problem world-wide in many countries with large populations undergoing overwhelmingly miserable poverty. It could yet be a major ethical and moral issue and social problem for Indian country.

The growing global divide between the haves and have-nots is showing a "staggering increase," perhaps its most rapid in history. A recent study conducted by a senior World Bank economist and incorporating 91 countries including 85 percent of the world's population determined that the richest one percent of the world's people have an income equivalent to the poorest 57 percent of humanity. In a global context, about 80 percent of the population lives below, and in most cases well below, the poverty line as determined in North America and Europe. America is considerably insulated from the worst of it, as the poorest 10 percent of Americans still live better than two-thirds of the rest of the world.

The study by Branko Milanovic, published last week in the Economic Journal, used a measure of inequality known as the Gini, which applies a rating scale from zero to 100. Zero indicates a country where all the wealth is divided equally while 100 indicates a country where one person has it all. According to Gini, the world presently stands at 66 percent of the people having zero, while the other 34 percent divide the rest among themselves. As the trend of inequality seems likely to continue, one wonders, at what point does the wealthy population realize that such overwhelming income disparity and widespread human misery generates precisely the intense resentment that turns to social unrest, nourishes terrorism, or more to the point, turns to revolution.

The reasons for the growing disparity cited in the study point to the "shock treatment" of new global economic measures established since the fall of the Soviet Union. These wiped out the middle class in Eastern Europe and in many countries of Latin America, while severely squeezing Africa and most of Asia into perpetual and increasingly violent realities.

How all of this troubled history intersects with Indian country is what makes it so compelling. As a growing minority among tribes, a number of Indian nations have become increasingly wealthy, revealing a disparity never before witnessed between rich and poor in Indian country. This income disparity now accelerates at a phenomenal pace. In some places this is happening within particular tribes; nationally, the divide between the wealth of well situated (when competently managed) and more remote tribes is even more obvious. While many American Indians live in impoverished and low income conditions, a few others ponder how best to invest their surplus tens of thousands from per capita payments each year. The trend is not so different from the national or even the dismal global reality. The only difference is that Indian tribes are relative newcomers to the economic game and still have the opportunity to do it differently.

For those reasons it becomes increasingly compelling and mandatory for tribal leadership to strive always to think and act from the primary cause of nation building, and to extend their economic relations to other tribes. Drawing the circle around all the people and working to provide a future, in health, education, employment, basic cultural and social services, coupled to reasonable planning, is the required commitment of tribal leadership that would pay attention to the serious and well studied concerns of their peoples.

As the major well endowed tribes rapidly increase their capital bases, the need for establishing well managed capital corporations and foundations that can help stimulate the less economically viable tribes is crucial. Not to do so will ultimately usher in overwhelming discrepancies, divisions and an overall weakening of Indian country's position relative to the rest of America. We urge the tribes to take the high road on this one for it represents the very best application of our traditions.