Bethany McLean

speaker

391 appearances 2 recordings 1 series first heard Jul 2026 last heard 2 Aug

Bethany McLean’s voice in public audio — every appearance, attributed to the second.

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recordings per month · last 12 months

Recordings per month over the last 12 months — 2 in all, peaking in Aug 2026 with 1.

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Motley Fool Hidden Gems Investing · Part 1: How to Spot a Corporate Fraud Before It Makes the Headlines · 26 Jul 2026 podcast

And they used a whole variety of toolkits from mark-to-market accounting, which is, and the reality is accounting is language.

Mark-to-market isn't necessarily any better or any worse than using historical prices, which is the other way of doing things.

Both can be manipulated.

But what Enron did is they used smart to market to increase their reported earnings they could produce.

They used special vehicles that their CFO had set up in order to sell at investments to that vehicle and be able to record of the gain on the investment they had sold what was effectively a captive vehicle.

And they used a whole host of other techniques.

And so what it really shows is the way in which accounting laws can be manipulated without breaking the law in order to increase the metric that a company wants to increase.

It's almost always the latter.

When I first started working on my book about Enron, I was young and I was a math major.

So I had this very simplistic view of the world.

And I thought, if bad people are doing bad things, then they know they're doing bad things.

And that's just not the case.

Hank Paulson, the former Goldman CEO and turned Treasury Secretary, said at one point, it's not that interesting why good people do good things.

And it's not that interesting why bad people do bad things.

But what's interesting is when good people do bad things and the system of corporate incentives combined with human nature can lead people down this path because they rationalize that, oh, I'm doing the right thing by my investors by not quite telling the truth about this, because if I did, my stock price would crash.

And if I stock price crashed, it would hurt investors or it would make it so that I couldn't raise any more money, in which case the bad outcome would be guaranteed.

So I'm just going to fudge this a little bit.

And they don't even really mean to do it that way.

It's this combination of rationalization and self-delusion.

And almost every story of business gone wrong has that in common, with a possible exception of Bernie Madoff.

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