Two years ago, the first signs of the Enron collapse were beginning to show. About 6,100 people lost their jobs in the wake of the company’s bankruptcy, along with health insurance and retirement savings. As they pumped more and more Enron stock into their 401(k) plans, Kenneth Lay, the company’s Chief Executive Officer, assured them that Enron was a strong company. While doing this, when he was quietly unloading his own Enron stock.
To most students it may seem that the Enron disaster has nothing to do with Fairfield University, but it does. The accounting firm that signed off on Enron’s accounting, Arthur Andersen, was headed by Fairfield graduate and board of trustees member Joseph Berardino ’72. The board recently put Berardino on a 14-member committee (including only one student) to search for a successor to Rev. Aloysius P. Kelley, S.J., who will step down as president at the end of the academic year. The Mirror thinks that such a selection is an error in judgment on the board’s part.
Berardino was not solely responsible for the fall of Enron, or the fall of Andersen, or the wave of scandals involving Andersen including the collapse of companies like Waste Management, Global Crossing and Worldcom. But he was the head of an accounting company implicated in the worst accounting missteps in the history of the profession.
After some rough questioning by Congress and a wave of negative press coverage, Berardino resigned as the head of Arthur Andersen months before the company was convicted of obstructing a Securities and Exchange Commission investigation into Enron.
The first sentence of Fairfield’s mission statement says that this institution strives to instill in students “ethical and religious values and a sense of social responsibility.” The statement also says “Jesuit Education, which began in 1547, is committed today to the service of faith, of which the promotion of justice is an absolute requirement.”
More than six thousand people lost their jobs, insurance and some or all of their savings in the Enron debacle, while the top executives dumped their stock at inflated values and gave themselves multi-million dollar severance packages. Is there any justice in that?
Again, it would be absurd to say Berardino was the only man responsible for these awful disasters. But should one of the public representatives of our university also be a man directly connected with several of the worst economic disasters in the history of capitalism? We think not.
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