2010

Enron: Corruption at its Best

One of the largest corporate bankruptcies in the history of United States - $63.4 billion. This paper will illustrate Enron s corrupt accounting practices, arrogant attitude, greed and executive power.

Zeeshan Rajpute Professional Writing - 3430 5/11/2010

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ENRON Stock Price

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Zeeshan Rajpute Professor: Charles Alcorn Professional Writing: 3430 10 May 2010

Enron: Corruption at its Best

Natural gas is derived from the remains of microorganisms, plant and animal matter. These remains are compressed in the earths surface over a long period of time under intense temperatures creating methanogens which transforms into natural gas. Its low density rises through the earths surface sealing itself within impervious rocks formulating a reservoir on top of oil deposits. Top rated natural gas production companies such as BP, ConocoPhillips, Chesapeake Energy, EOG Resources, Newfield Exploration and Range Resources specialize in extracting gas from clastic sedimentary rock referred to Shale. In 2008, BP generated revenues of approximately $365 billion. Chesapeake Energy declared revenues of approximately $11 billion same year (Fredonia Group, Inc. 2). Exxon Mobile is in the process of diversifying by developing shale gas production to capture additional sources of revenue. In 2008, United States was the second largest natural gas producer following Russia at 21%. During that year United States average consumption was 21.74% trillion cubic feet. In 2008, 83% of consumption was produced domestically. United States is the dominant user of natural gas. Once natural gas is produced and transported via pipelines to local distribution companies (LDC). Natural gas then passes through compressor stations and processing plants. LDCs transport the gas through transmission and distribution point to city gates. From city gates, then

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gas is distributed to consumers. LDCs are structured in various formations. Four classifications are Investor-Owned, Privately Owned, Municipal and Cooperative. A prime example of Investor-Owned Company is Centerpoint Energy. Enron Creditors Recovery Corp (ECRC) formerly known as Enron Corp. was actually a provider of electricity and natural gas wholesale, retail purchasing and consulting services. Enron produced, stored, transported, electrical generation, commodity trading, financial, Internet, commodity risk management and complete retail and facility management (OneSource). Ken Lay was the CEO of Houston Natural Gas who purchased InterNorth. In 1985, Enron materialized through the coalition of Houston Natural Gas and InterNorth. Now, Enron controlled gas pipelines throughout southeastern United States. By 1987, fraudulent activities within the crude oil division resulted in $150 million loss. Enrons shares declined significantly resulting in limited cash flow barely able to maintain employee payroll. Enrons successful perception allowed Ken Lay to generate funds through new loans from investors in New York. In 1989, deregulation o f natural gas made it possible to become one of the most powerful corporations in the world (Slocum 8). In 1990, Jeffrey Skilling was hired by Ken Lay to become the new CEO of Enron .Skillings background in corporate financing and investment banking created opportunities to capitalize a deregulated natural gas market. Skilling creatively restructured the accounting methodology. He implemented mark to market accounting system, revenue recognition process was re-modified and creation of special purpose entities (SPE) escalated. These unprecedented accounting practices gave Enron a competitive advantage. In 1992, Enron was the largest dealer of natural gas in North America (Wikipedia contributors). Throughout the era of 1990, under Skillings manipulation, Enrons stock price increased 311%. In 2000, Enrons stock price

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escalated another 87% from 1999. Furthermore, Enron claimed revenues of approximately $101 billion and employed nearly 22,000 people. Andrew Fastow was another key executive who was referred to as the Fall Guy. He was hired in early 1990s to work in its treasury department (Biography Resource Center Online). Before taking his position as CFO, Fastow was head of Enron Capital Management. He was highly skilled in manipulating numbers and brokering loans. Fastow created special purpose entities (SPE) to shelter debt. This tactic would increase Enrons return on asset (ROA), earnings per share (EPS) and reduce its debt to asset ratio. Higher the EPS, more capital the company is generating. EPS is one of the most important indicators of a companys strength and profitability. Fastows talent for financing, packaging and restructuring current transaction allowed him to create countless SPE to conceal Enrons debt (Biography Resource Center Online). Mark to marketing and revenue recognitions are two accounting methods if applied with a malice intention can manipulate a corporations financial viability. Mark to marketing method is used typically to trade securities or mutual funds. Financially, accounting principles can determine an actual value to a security based on amortization, depreciation and current market value (Investopedia 2009). In a merchant or retail business setting, appraising assets at its current market value and not book value can have a serious backlash. In essence, Enron was recording assets future value instead of cost minus depreciation. Revenue recognition principle was another cunning technique incorporated by Enron. Revenue recognition is generally recorded when revenue generation is complete or has occurred, Enron was recording revenue using a merchant model versus an agent model. Agent model only records brokerage fees revenue commonly used for investment brokerage firms. Enron,

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being a merchant, buying and selling various forms of energy and gas products record revenue minus cost of goods sold (Investopedia 2009). However, Enron combined both models to their advantage. They would enter revenues as brokerage fees in order not to deduct cost of goods. This scheme would grant Enron leverage to amplify their revenue, dilute liabilities resulting immense net profits. Furthermore, Enron would create SPE to minimize liabilities. Special purpose entities such as limited partnerships created to hedge risk or acquire capital (Thomas 4). These entities would obtain the sponsoring company, Enrons debt and convey hard assets in replacement for consideration (Thomas 4). Now, Enron was leveraging these SPE for additional funds from lenders. This method would increase Enrons cash flow, current ratio, quick ratio, rate of return on assets and lower their debt to total assets; resulting a higher ESP (earnings per share) ratio illustrating a viable, profitable and equitable company. This paper will attempt to posit the foundation for Enrons downfall. The application of unethical business practices such as mark to market accounting, revenue recognition and special purpose entities. This paper will attempt to illustrate how top executives like Ken Lay, Jeffrey Skilling and Andrew Fastow breaded a corporate culture established on greed, extreme competitiveness with an arrogant attitude. This paper will convey Enrons influence, particularly Ken Lay, within the Bush Administration. How campaign donations to public officials throughout the nation fueled Enrons market exposure. How Ken Lays influence over government officials to implement regulations in the energy and gas industry to adhere Enrons corrupt ideology. Enrons prime objective to deregulate the energy market and commodity trading was accomplished between 1997 through 2000. This inclination was geared towards diversifying monopoly controlled energy market by local utilities (Wayne 1). About 24 states accepted some

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form of energy deregulation. Enron contributed approximately $1.9 million to 700 different candidates over 28 various states by 1997 (Wayne 1). Deregulation would allow Enron to bypass price regulation .Enrons revenues multiplied boundlessly, making it one of the most powerful corporations in the world. Lawmakers and regulators justified this deregulation as free market capitalism. Government should not dictate prices and allow the natural course of supply and demand to stimulate economy. Government officials were too influenced by Enrons campaign contribution and lost sight of consumers interest. Enron exploited the weakness that evolved through deregulation for the sole purpose of manipulating prices and supply. Mark-to-Market (MTM) accounting emerged in the 1980s. Companies started to record assets based on their fair market value and not cost. Eventually, companies with malice intentions such as Enron could book hypothetical numbers to account for their hard to value assets (Invetopedia 2009). A recent example of mark-to-market failure is Washington Mutual Bank in September 2008. Washington Mutual declared billions of assets on their balance sheet. Then, suddenly the bank was sized by federal regulators. This was the largest bank failure in United States history. Washington Mutual was bought for $1.9 billion where as the portfolio declared $307 billion. Primary factor associated to their downfall was the application of MTM accounting principles. Washington Mutuals security value was recorded at current market value rather than book value. Basically, Enron was recording future profits on their current balance sheet in the same manner. For example, Enron build a power plant and record hypothetical future profits on current financial statements. Special Purpose Entities (SPEs) were another contributing factor towards Enrons fraudulent activities. Enrons MTM methods were detecting financial concerns; Andrew Fastow incorporated SPEs to hedge liability.

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Under Fastows leadership, Enron took the use of SPEs to new heights of complexity and sophistication, capitalizing them with not only a variety of hard assets and liabilities, but also extremely complex derivatives financial instruments, its own restricted stock, rights to acquire its stock and related liabilities (Thomas 4-5). Enron was operating business through more than a thousand SPEs. Fastow personally managed LJM Cayman LP and LJM2 Co-Investment LP. Fastow collected, personally over $30 million in management fees from 1999 to 2001 (Thomas 4). Raptor was another group of SPEs designed to hedge bankrupt investments. Enron issued stocks to these SPEs in return for notes receivable up to $1.2 billion which inflated the balance sheet. SPEs would allow Enron to transfer these loosing assets off their financial statements. Author Andersen LLP was employed by Enron to perform internal and external audits. Author Andersen assigned a permanent staff at Enrons offices. Yet fraudulent activities were not detected. Majority of accountants, controller and CFOs employed at Enron were previous Author Andersen executives (Thomas 9). This relationship between Author Andersen as internal and external auditors consoled Enron to conduct their black box operation. Author Andersen has accepted their acknowledgement of corruption but not unethical accounting practices. Author Andersen was terminated as Enrons auditor in early 2002. Enrons corporate culture lacked compassion and integrity. The only compassion Enron executives expressed was personal gratification. The most Innovated Company or Worlds Leading Company at its peak bared sign of arrogance. From top executives, managers, traders and entry level employee oriented a sense of pride which led to risk taking resulting in fraudulent activities. Employees were ranked and compensated based on performance. And there were no leeway for mistakes. Mistakes were brushed under the rug. This pressure resulted in defying the rules.

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Skilling created an atmosphere of ruthlessness. He implemented a system of forced ranking for employees. Any employees ranked in the bottom 20% would be terminated (MeLean 1). Employees endangered one another for future employment at Enron. Skillings attempt to create excellence came with a cost. A cost that would lead to Enrons destruction. Skilling sole purpose was to maximize price per share of common stock regardless of strategy. Enron

employees divulged into unethical practices. Enron had 874 subsidiaries registered in foreign countries to avoid taxation (Slocum 25). In comparison to Duke Energy who had only six subsidiaries all registered in US. ExxonMobil has 9 companies registered overseas for tax shelter. Skilling and Fastows disregard for criminal consequences, obligations to shareholder and employees, created an environment neglecting responsibilities, falsifying financial statements, inflating contract values and many other unethical practices. Corruption could be traced in the heart of Enron, their Board of Directors. Mr. Powers testified before this Subcommittee. He was commissioned as a new member of the Board of Directors of Enron, to do a study of what was happening inside the Enron Corporation. They did a study of only three partnerships or SPEs, only three. Mr. Powers sat at the table and said what they found inside the Enron Corporation was appalling. This, remember, would be the best possible light put on this company because was done by a member of the Board of Director at the request of the Board of Directors. He found something inside the company that was appalling. Officer of that company, and people in the company, for example, invested $25,000 of their money and took out $4 million 60 days later. What we discovered with respect to this corporation is, in fact, a culture of corruption (OneSource). Deception and corruption with outright negligence can describe the corporate culture of Enron. Enron was a primary contributor, lobbing for deregulation of natural gas. They were so determined break the monopoly, Lay and Skilling would meet utilities commissioners, testify before statehouse committee and call politicians (Wayne 1). In 1997, according to National

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Institute on Money in State Politics reported Enron contributed over $1.1 million in campaign. In 2000, Enron gave $1.1 million candidates and state legislators throughout the nation. Governor Gary Davis of California received $97,500, Governor Rick Perry of Texas received $212,000, Governor George E. Pataki of New York received $9,000, Phil Gramm received $97,350, Senator Kay Bailey Hutchison received $99,500, and Republican senator Conrad Burns of Montana received $23,200. Enron created a reputation as the energy industrys leader in finance contribution (Public Citizen). Due to these contributions, Ken Lays influence reached the highest level of government. Ken Lays recommendations were heavily considered by the Bush Administration. The Energy Policy Act of 1992 was customized to fit another one of Enrons manipulative schemes. This plan incorporated the flow of gas through utility pipelines to endorse Enrons product. Enron was going to capitalize on every transaction occurring within wholesale and retail of electricity trade. When Kenny Boy said Jump, George Bush said how high. Another prime example was Lays recommend of seven candidates to the Federal Energy Regulatory Commission. One such document was a January 8, 2001, letter written to Bushs personal director, Clay Johnson, recommending seven candidates to the Federal Energy Regulatory Commission. Two of the candidates Lay recommended, Pat Wood and Nora Brown, were appointed to FERC by Bush; Wood was appointed chairman (Leopold 3). This letter along with thousands of other pages was subpoenaed in May of 2002 illustrating the relationship, respect and influence Ken Lay retained over the Bush Administration. Furthermore, Bushs top economical advisor, Lawrence Lindsey, was compensated $50,000 for consulting work rendered to Enron in 2000. There were many top White House officials who were somehow related to Enron besides George Bush. One individual stands out above the crowd was Karl Rove. He was the senior White House political strategist who sold 1,000 shares of Enron

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stocks in June 2001 just six months prior the Enrons bankruptcy. This is a perfect example of internal corruption. Ken Lay and Enrons success is significantly related to influencing corruptive behavior for personal gain. How did Ken Lay become a dominant figure with the Bush Administration? He was popular among other political officials away from the Washington, but how the White House? Well shortly after earning his PH.D. in economic from University of Houston, Ken Lay enrolled as an officer in the U.S. Navy. In 1971, Lay was chief assistant to the Federal Power Commission where he impressed many people with his work. In 1972, He held a position as Deputy Undersecretary of Energy of the U.S. Department of Interior. Ken Lay also held as position as Technical Assistant to Commissioner of Federal Energy Regulatory Commission. Before leaving the political arena, Ken Lay developed relationships with key political figures. Political figures such as George H. W. Bush. This relationship passed on to George W. Bush. This bond between the Bush Family and Ken Lay was very prominent and loyal. Ken Lay experienced firsthand, how to exploit personal agenda within the government. Enron gave more than $1.1 million to Bushs presidential campaign: $127,525 directly to his campaign and $713,200 to the Republican National Committee, which served as an arm of the Bush presidential campaign. Enron and Lay also gave $300,000 to the Bush-Cheney 2001 Presidential Inaugural Committee (Public Citizen). Once Bush was elected as President, Ken Lay initiated his personal agenda without hesitation. Under Bushs administration, with the assistant of Phil Gramm, another public official. Under Lays confidence, Gramm introduced the Commodity Futures Modernization Act of 2000. The verbiage in this Act stated deregulation of energy trading by excluding companies like Enron under the jurisdiction of Commodity Exchange Act and Commodity Futures Trading Commission. This bill would empower Enron to deviate regulated trading auctions, exclusively

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New York Mercantile Exchange. Meaning, Enron can operate its own unregulated energy trading auction. Enrons wholesale service division heightens its revenue from $35.5 billion in1999 to $93.3 billion in 2000. In comparison, 1st quarter of 2000, revenue recorded $12 billion, but 1st quarter of 2001 registered $48.4 billion (Public Citizen). Once Enron established EnronOnline, they captivated solid control over Californias energy market. Without owning a power plant, Enron manipulated Californias energy supply. Enrons greed steered unethical practices. Such as withholding energy supply, which stimulated bogus shortage resulting in price increase. Enrons influence and power laid a foundation for success. If only Ken Lay and other top executives lacked the attribution of greed and arrogance, this corrupt company might have become a titan in the energy industry. Kenneth L. Lay was referred to as a father figure in Enron. He is a prominent example of rags to riches with a touch of corruption. Ken Lay was born on April 15, 1942 in Tyrone Missouri. He was born in poverty. As a child, Lay worked on a farm plowing fields. Lay was very dedicated to his education. He earned a scholarship to University of Missouri. While attending U of M, he would work part-time painting houses. An economics professor, Pinkney Walker inspired him to major in Economic. Walkers influence motivated Lay to complete his masters and doctoral degree. Through Walkers connections, Lay was on his way to the White House. After his service to the public in 1973, he decided to take a corporate journey. He was employed at W. J. Bowen as vice president of corporate planning (Biography Resource Center Online). In 1982, he married Linda A. Herrold after divorcing his childhood sweetheart (Judith D. Ayers). In 1984, Lay corporated the merger of Florida Gas and Houston National Gas. In 1985, Houston Natural Gas purchased InterNorth. By 1986, this merger was named Enron. Deregulation occurred in 1989 resulting in enormous corporate growth. In the 1990s era, with the

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assistance of a few key political figures, 1Enron was recognized as the most innovative company in America. Towards the end of 1990s, manipulation and corruption was slowly starting to emerge. By December 2, 2001, Enron declared bankruptcy. In July 2004, Kenneth Lay was indicted by federal grand jury on 11 counts of felony, ranging from wire fraud, securities fraud and falsifying bank statements (Biography Resource Center Online). Lays $40 million in soft and hard assets were seized. Ken Lay passed away on July 5, 2006 of a massive heart attack. He was truly a genius based strictly on his accomplishments of maneuvering government decisions in favor of Enron. Jeff Skilling was known as the Idea Man or Thrill Seeker. Skilling was born on November 25, 1953 in Pittsburgh, Pennsylvania. He was raised in New Jersey and Aurora. He graduated from West Aurora High School. In 1975, Skilling graduated from Southern Methodist University in applied science. In 1979, he received his MBA from Harvard Business School. Skilling was named CEO of Enron by Ken Lay in 1990. Throughout the 1990s, Skilling produced exemplary profits by diversifying their market segment and implementing risk taking accounting ideologies. By 2001, Jeff Skilling was earning $132 million annually. In March 2002, Jeff remarried to Rebecca Carter. February 19, 2004, Skilling was charged with fraud and insider trading. In May 2006, Skilling was convicted of 19 counts of felony. October 2006, Jeffery Skilling was sentenced to 24 years and November 2006 reported to prison (Biography Resource Center Online). Skilling by far portrayed a personality different then Lay. Skilling was creative, but full of corrupt ideas, arrogant and had a lack of remorse for others. Andrew Fastow was referred to as the Fall Guy. Andrew Fastow was born on December 22, 1961 in Washington D.C. Fastow earned his degree in Chinese and economics from Tuft University. Then Fastow graduated from Northwestern University with a masters

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degree. He married Lea Weingarten in 1984 and had two children. Fastows background was related to asset-backed securities (Biography Resource Center Online). This is the samepractice used by subprime lenders when the housing market was booming. This experience was prepping Fastow for a greater challenge to come. In 1990, Skilling hired Fastow to implement his assetbacked securities model into Enron. In 1998, Andrew Fastow was named CFO. Fastow was recognizes by his creation of SPEs to shelter liabilities and hedge assets. In January 2004, Fastow and his wife pled guilty to fraud. On March 7, 2006, Fastow testified against Ken Lay and Jeff Skilling. On September 26, 2006, Fastow was sentenced six years. Personal information about Andrew Fastow is very limited. He was a low profile individual. Fastows attributes consisted of contract brokeraging and debt consolidation, basically a numbers guy. Fastow was not an out spoken individual but very effective. Enrons accomplishment for lasting as long it did should be credited to Andrew Fastow. In every corporation, there is a degree of corruption, a thin line between right or wrong. It is the ethical responsibility of corporate leaders to distinguish the difference between appropriate or immoral conduct. Corporate culture and business ethics are cultivated by example. Consequences are enforced for breaking the rules. Ken Lays leadership gratified success through unrestricted degree of corruption. Ken Lays used his influence over the government to strategically positioned Enron to captivate more market share. Lays use of influence according to my definition was acceptable. Corporations who are capable of, try to use executive contacts to secure their interest. This is a form of free market capitalism. However, if ulterior motive demonstrate malice intent, then one has crossed the line of immoral conduct. Lay and Skillings intentions were never to benefit the well being of Enron but their personal gains. Jeff Skilling

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cultivated arrogance, greed and corruption. If both of these individual would have confined their greed and degree of manipulation, Enron could have evolved into a mega cap company. A significant credit for Enrons breakdown can be contributed to Bush Administration and a few other key figures, such as Phil Gramm. These public advocates were impressed by Enrons fictitious image and indebted to its campaign contributions; they overlooked the consequences. Control and power to this magnitude can never be bestowed to arrogant, greedy and manipulative individuals. According to National Bureau of Economic Research in 2006, America has encountered seven recessions from 1959 to 2003. If we truly did have seven recessions then we must have embraced seven boom periods. Meaning, since 1959 America has undergone seven business cycles. There are several theories justifying recession or boom. One of the first business cycle theorists, Joseph Schumpeter (1934/1989; 212, 214) speculated that recurrent business fluctuations (cycle) would occur initially as a result of swarms of entrepreneurs who create spikes in productivity, followed by a panic or shock which drives output downward ( Conroy, and Emerson 905-911). Americas levels of ethical standards have diminished. Conroy and Emersons study also showed that there is no pattern between ethical attitudes when compared linearly to business cycles. Due to the recent breakdown of corrupt companies such as Enron, WorldComm and Author Andersen, ethical attitudes cycle patterns may mirror economical cycles. The threshold for accepting different degrees of corrupt behavior may intensify or decline. In summary, Americas threshold for accepting corrupt behavior is low. However as time heals all wounds, our tolerance level as a society will increase allowing other corporations to follow the same path as Enron.

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One positive outcome evolved from this misfortune. The commencement of SarbanesOxley Law. This law requires CEOs and CFOs of corporations to personally validate the authenticity of their financial statements. For any fallacious act committed to misrepresent their corporations financial well being, CEOs and CFOs will be held accountable civically and criminally.

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Works Cited Andrew S. Fastow. Biography Resource Center Online. Gale Group, 2002. Reproduced in Biography Resource Center. Farmington Hills, Mich.: Gale, 2010. <http://galenet.galegroup.com.ruby2.uhv.edu/servlet/BioRC>. Conroy, Stephen J., and Tisha L. N. Emerson. "Ethical Cycles and Trends: Evidence and Implications." Journal of Business Ethics. 81.4 (2008): 905-911. Business Source Complete. EBSCO. Web. 3 May 2010. http://search ebscohost.com.ruby2.uhv.edu/ login.aspx?direct=true&db=bth&AN=33281746&site=bsi-live&scope=site>. "Corporate Overview for Enron Creditors Recovery Corp." (2010): OneSource. University of Houston - Victoria Library, 3 May. 2010. <http://www.globalbb.onesource.com>. Enrons Collapse: The Fall Of A Wall Street Darling. Seabury, Chris. Investopedia, 2009 A Forbes Digital Company, <http://www.investopedia.com/articles//stocks/09/enroncollapse.asp >. Examining Enron: Developments Regarding Electricity Price Manipulation In California.(15 May 2002): OneSource. University of Houston Victoria Library. 3 May 2010. <http: www.blobalb.onesource.com>. "FREEDONIA FOCUS ON Natural Gas." The Freedonia Group, Inc. (2009): 1-19. OneSource. University of Houston - Victoria Library, 3 May. 2010. <http://globalbb.onesource.com>. Jeffrey K. Skilling. Biography Resource Center Online. Gale Group, 2001. Reproduced in Biography Resource Center. Farmington Hills, Mich.: Gale, 2010. <http://galenet.galegroup.com.ruby2.uhv.edu/servlet/BioRC>. Ken Lay. International Directory of Business Biographies, 4 vols. St James Press, 2005. Reproduced in Biography Resource Center Online. Farming Hills, Mich.: Gale, 2010. <http;//galent.galegroup.com.ruby2.uhv.edu/servlet/BioRC>. Leopold , Hason. "George W. Bush and Kenneth Lay." Truthout Report (2006): 1-7. 3 May 2010. <http://truthout.org/article/george-w-bush-and-kenneth-lay>. Mark-To-Market Mayhem. Elmerraji, Jonas, Investopedia, 2008 A Forbes Digital Company, <http://investopedia.com/articles/financial-theory/08/mark-to-market-mayhem.asp>. McLean, Bethany. "Why Enron Went Bust." Free Republic (2001): 1-15. 3 May 2010. <http://freerepublic.com/focus/f-news/595507/posts>. Slocum, Tyson. "Blind Faith: How Deregulation and Enron's Influence Over Government Looted Billions from Americans." Public Citizen. (2001): 1-29. <http://www.ebscohost.com>.

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Schuler, Psy. D., A.J. "Does Corporate Culture Matter? The Case of Enron." Schuler Solutions, Inc. (2002): 1-3. 10 May 2010. http://www.schulersolutions.com/enron_s_corporation _culture. Thomas, C. William. "The Rise and Fall of Enron. When a company looks too good to be true, it usually is." Journal of Accountancy (2002): 1-11. 3 May 2010. <http://journalof accountancy.com/Issues /2002/April/TheRiseAndFallOfEnron.htm>. Wayne, Leslie. "ENRON'S MANY STRANDS: The Politics; Enron, Preaching Deregulation, Worked the Statehouse Circuit." New York Times 9 February 2002:1-3. OneSource. University of Houston Victoria Library. 5 May 2010 http://www.nytimes.com/2002/ 02/09 /business/enron-s-many-strands-politics-enron-preaching-deregulation-worked-thestatehouse-circuit.asp>. Wikipedia Contributors. "Enron scandal." Wikipedia, The Free Encyclopedia, 4 May. 2010. Web. 8 May. 2010. <http://en.wikipedia.org>.