|Help me out here. As the new season of the Enron soap opera opens in Houston, today's WSJ (subscription required) says on C1 that lawyers for Messrs. Lay and Skilling have argued that the LJM partnerships — the off-balance-sheet gizmos arranged and managed by Andy Fastow — were legal and legitimate.
Excuse me? Yes, the deals and rules surrounding them were complex and difficult for non-financial types to understand. But strip away all the mumbo-jumbo, and the simple fact is that the outside investors had no equity at all at risk (since Enron guaranteed their investment), thanks strictly to side agreements that weren't publicly disclosed until congressional hearings. Anyway you slice it, that's contrary to what U.S. GAAP said then and says now.
So what planet do these attorneys inhabit?