Fortune's Bethany McLean talks to media about her role in Enron scandal

Fortune magazine writer Bethany McLean, widely credited for writing the first story that criticized Enron and questioned its accounting, was interviewed by the Houston Chronicle about why she is at the trial and what role she played. She downplayed her story and her role in bringing down Enron.

“The story took on an importance later that it did not deserve originally,” McLean said during a break in proceedings. “Whether I wrote that story or not, Enron would have gone bankrupt, investors would have lost billions of dollars and thousands of people would have lost their jobs. I just picked up on an underlying skepticism. If you had told me then that the company would go under by the end of the year, I would have never believed it. I was as naive as the rest of us.”

I applaud McLean for not getting a big head. A review of her March 5, 2001, article shows that her reporting did raise some serious questions about the company, but she ultimately failed to find what was wrong. Even McLean admitted the shortcomings of her reporting in the article. “The inability to get behind the numbers combined with even higher expectations for the company may increase the chance for a nasty surprise,� she wrote at one point. “The numbers that Enron does present are often extremely complicated.�

However, McLean’s reporting raised enough concerns that other business journalists should have been more aggressive in examining Enron. She noted how Enron’s debt had increased substantially and that its cash flow had slowed. She also pointed out that no analyst covering the company knew what was included in a division called Assets and Investments. McLean dug into the company’s financial statements and found where some potential accounting moves were being made to make Enron look better.

Although she had training in investment banking, her analysis was simple enough that it could have been accomplished by anyone with a basic understanding of how to read a balance sheet and a financial statement – training an increasing number of business journalists are receiving.

Chronicle reporter Mike Tolson added, “McLean is the most visible of a modest corps of reporters who have followed the Enron story for the last five years, and most of which has assembled in Houston for its culminating act.

“Joining in are writers for American news magazines, foreign journalists — France, Germany and Norway are represented — and a few from unexpected publications.” Matt Taibbi, national affairs correspondent for Rolling Stone, is among those at the trial.

Read the Chronicle’s story about the media covering the trial here.