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In one hand, Andrew Fastow held the trophy given to him as the chief financial officer of the year from Enron’s heyday when it was hailed as one of America’s most innovative companies. But in the other hand, he showed the prison card he received after finishing his six-year sentence for his role in helping to orchestrate fraud of epic proportions.   

“I got both of these for doing the same deals,” says Fastow, the former CFO of Enron.

“How is it possible to be the CFO of the year and commit the greatest corporate fraud in American history for doing the same deals? Every single deal I did was approved by Enron’s accountants, by the outside auditors, by Enron’s attorneys, by Enron’s outside attorneys, by the bank’s attorneys when appropriate and by Enron’s board of directors,” he said.

“If I had to sum it up in one word, the word I use is ‘loopholes.’ A loophole means you’re technically following the rules, but you’re intentionally going around the principle of those rules.”

Fastow, the keynote speaker at the ’s (CCAL) annual year-end celebration on April 11, addressed the audience of students, faculty, staff and community members via webcast from Houston. He began the presentation taking full responsibility for his actions describing them as wrong, unethical and illegal.

“In fact, I consider myself probably the person most responsible for Enron’s downfall.”

Fastow’s remarks focused on what he was thinking while in the role. He became renowned for studying the rules and finding ways to make deals that could take advantage of accounting assumptions and structured financing practices. 

“When I was CFO, I believed that if I’m getting permission and following the rules that by definition my behaviour was reasonable, what a reasonable person under normal circumstance would do. But I am the poster boy to prove that’s not the case that in fact you can find ways and will come across ways to be the hero but violate the principles of the rules.

“If the only standard you use to make a decision, like me, is whether or not you’re following the rules, why wouldn’t you do the next more aggressive transaction? Why would you ever stop?”

After his remarks, a panel of experts including Gina Campbell, partner at Deloitte, weighed in. As a forensic accountant, Campbell’s role is to investigate fraud and said some of the cases she’s investigated also lasted for a decade before being detected. 

“What happens is over time they have to keep getting bigger and bigger because generally the underlying operations of the business tend not to get better and once you start perpetuating fraud on the financials, you have to keep making those journal entries or transactions bigger and bigger, riskier and riskier and ultimately they get caught or somebody blows the whistle,” she said.  

Haskayne’s CCAL was launched in 2012 with a mandate to help develop the next generation of ethical business leaders as a result of the global financial crisis of 2008 and its lack of ethical leadership.

“We chose this speaker deliberately after much debate and discussion,” says CCAL director Glenda Reynolds. “Even though it may seem odd to bring a convicted felon to speak about ethics, we think it is important to understand and learn about ethics from real cases, including failure at the top.”

�ճ���� has been taught in business schools for years now and with Thursday’s event, students were given the same opportunity as students at Harvard,��,�� and Stanford to hear from Fastow, who has also recently spoken at conferences organized by CPA Canada, the United Nations’ Principles of Responsible Management Education Conference and the FBI’s Advanced Financial Crimes Seminar.

According to Fastow, because of rules like  that came into effect as a result of Enron’s collapse, many people believe Enron was a failure of compliance. He disagreed.

“What Enron was was a culture failure. It was a culture of loopholes where the principles didn’t matter, only technical adherence to the rules,” said Fastow.

Mac Van Wielingen, the Calgary business leader who helped found CCAL, closed the evening stressing the importance of culture.

“The reality is that culture is incredibly powerful, not just with respect to ethics, but with respect to performance,” said the founder of ARC Financial.

“It’s not just about wrongdoing, great culture will implicitly embrace learning, commitment transparency, accountability, trust and reliability. That creates support and collaboration and you can all move together towards common goals and that creates performance.”