Andy Fastow may not be a household name, but as the former CFO of Enron, he was an integral part of the company’s vast illegal activities and a key figure behind the company’s deceptive and overtly fraudulent accounting practices. As a result of his deep involvement in the Enron scandal, Fastow would serve six years in prison.
These days, Fastow is a free man who, believe it or not, actually gets paid for speaking appearances. And during one of Fastow’s more recent talks, the disgraced CFO spent some time comparing Enron to Apple. The unifying thread between the two companies, according to Fastow, turns on Apple’s tax schemes abroad.
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Apple has been accused in the last few years of using its Irish subsidiaries to shelter profits offshore and evade paying taxes, most recently by the European Commission, which is investigating whether the company owes it billions of tax dollars. Fastow’s point, at least according to Tilson, was that Apple “is engaged in tax dodging behavior that, while perhaps technically legal, is clearly designed to increase profits and inflate the stock by misleading and confusing regulators (and perhaps investors) via a massively complex web of entities.”
Indeed, Apple’s tax practices, while hardly unique among high-tech companies, has generated a lot of bad press in recent years. n 2013, Apple CEO Tim Cook even went to Washington to alleviate congressional concerns over Apple’s tax moves abroad.
So is there any grain of truth to the Apple/Enron comparison? Not really. Sure, it might make for an interesting soundbite, but the two companies couldn’t be any more different. Enron, to be blunt, was engaged in criminal and fraudulent behavior.
As many have been quick to point out, actually generating profits and minimizing one’s tax liability via the tax code – as Apple does – is worlds apart from deceptively hiding losses and tricking investors into thinking that profits are being earned – as Enron did. The former is legal while the latter is decidedly not.
