Why Enron matters.(Memo To Members)(Column)

When you think about the fallout from Enron, the fact that it's an energy company trips a certain set of switches. Consumers may feel some of its effects in what they pay for electricity, in their ability to choose a supplier, even in energy availability.

But in other ways, it doesn't matter what kind of business Enron is in. An enormous and powerful company appears to have manipulated the system to a staggering extent, and the laws that allowed these abuses to happen were already in place.

The Enron bankruptcy seems to rest on a complex and convoluted system of regulation and deregulation, accounting, and auditing that's almost incomprehensible even to many accountants and lawyers. But the lessons are clear. You don't need to be an employee or a shareholder of Enron to be affected by its actions--and to demand changes.

Consumers would benefit greatly from certain reforms:

* As individual investors, we are entitled to know that a company's financial reports are accurate before we invest. The same people who are paid enormous sums to advise businesses should not also be paid to check that their accounting is aboveboard. Two years ago, Consumers Union supported reforms that would have reduced such conflicts of interest. We are now seeking even stronger boundaries between consultants and auditors.

* As employees, we have a right to trust that our retirement accounts are being managed responsibly. Enron was not the first or only employer to leave its workers in the lurch when it filed for bankruptcy. Many companies match the money employees contribute to their 401(k) retirement accounts with a company contribution. Sometimes it is cash, sometimes company stock. Employees may be barred from selling those shares for a ...