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The Magic Numbers Bus

A Houston bus tour operator tries to cash in on the city's most famous business failure. Also: A Dutch court pins Royal Ahold's woes squarely on the CFO.
Matt Lynch, CFO Magazine
May 8, 2006

You've read the book. You've seen the movie. You've followed the real-life trial. Now take the tour.

A Houston tour operator is cashing in on the fascination with all things Enron by offering a ride through the infamous sites related to the company's spectacular collapse. For $30, riders can see where all the deals were made and unmade, including the company's former headquarters (now minus the "crooked E" sculpture, which sold for more than $10,000 at auction), the house former CFO Andy Fastow had built in River Oaks with his gains, and the favorite bars and clubs of former Enron executives.

Sightseers are evenly split between Houston natives and visitors to the city, says Sandra Lord, owner of Discover Houston Tours, the organization that offers the ride. "Most people in Houston want this Enron mess to go away," she says. But some people can't get enough Enron lore. "We did have one couple buy tickets as a Valentine's Day gift."

So far the tour, dubbed "Lifestyles of Houston's Rich and Infamous," has been struggling to attract riders in a city saturated with Enron news. It could also be that few want a bus-tour reminder of what happened to their retirement savings.

Lord says the tour will continue to run during and after the trials of the Enron executives and hopes that as the furor dies down, more people will be interested. "Once there's a sense of distance, people will be ready to look back," she says. "It's similar to Savannah and Midnight in the Garden of Good and Evil [a book about a murder scandal set in Savannah, Georgia]. People weren't happy about the notoriety until the tourist money started to come in." Enron: the tourist attraction. Now there's a solid business idea. — Matt Lynch


The CFO as Kingpin

In most of the big accounting-fraud cases in the United States, finance executives cut deals to help prosecutors go after who they believe to be the real culprits — the CEOs.

Not so in the Netherlands. In March, an Amsterdam Court of Appeals found former Royal Ahold CFO Michiel Meurs to blame for the accounting scandal that rocked the global food giant three years ago, according to a company official. A court filing detailing the 15-month investigation heavily criticized the former finance executive for failing to act even after warnings of accounting weaknesses. The three-member court said Ahold knew about weak internal controls within its U.S. Foodservice subsidiary before it acquired the business in 2000. The prosecution is asking for a 20-month prison sentence, according to the Ahold official.

Former CEO Cees van der Hoeven didn't escape blame entirely, though. In the report, the court chastised van der Hoeven for his role as "sparring partner" for Meurs. The panel's report accused Ahold's management of overlooking internal controls because it was heavily concerned with achieving double-digit growth targets.

In 2003, Ahold restated its earnings by $1 billion for the three years ended 2002, and last December the company paid $1 billion to settle a class-action lawsuit with shareholders. Meurs, van der Hoeven, and two other former Ahold executives are targets of a separate civil suit in Amsterdam for fraud. A final judgment on the criminal case against Meurs is expected from the Dutch court on May 22. — M.L.




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