The tumultuous downward spiral of energy giant Enron is a prime example of the failure of a company to accurately report its financial status, experts at Penn State say.

"It's a case of a company that said it had more assets than it did," said David Schlow, lecturer in economics.

Schlow said the Houston-based corporation's deliberate concealment of its unstable financial status allowed for a misleading perception of its business practices, which in turn led to the corporation being labeled a 'cutting edge' company.

"But they simply weren't, and the bubble burst," Schlow added.

James Eisenstein, professor of political science, echoed Schlow's sentiments.

"Markets fail when people do not have adequate information on investments and (Enron) investors didn't have that information," he said.

Eisenstein pinpointed the vast influence of the all-mighty dollar — particularly in the area of campaign financing — as a major contributing factor to the Enron problem.

"Money speaks much louder than it should in a democratic system," Eisenstein said. "Donations are a subtle way of influencing decision makers."

Eisenstein added that the donation of funds to political groups allows for "friendly access" to influential leaders — a dynamic that Enron freely manipulated in the business' effort to skirt certain governmental controls.

"It's an implicit threat. If someone makes large contributions and calls you up, you're going to be favorably disposed to the donator," Eisenstein said.

Vice President Dick Cheney's meetings with Enron board members were among the examples cited by Eisenstein.

"Cheney has secret meetings with Enron and other corporations and doesn't have to reveal anything. He can say, 'Sorry, executive privilege,' " Eisenstein said. "It's the basic principle of politics."

Penn State College Republicans member T.J. Kokolis believes the Enron incident will serve as a learning experience for President George W. Bush during his remaining tenure.

"The Bush administration will now be careful as to what they get their hands into," Kokolis said.

Schlow does not foresee any overall economic glitches resulting from the scandal.

"The economy isn't working at full capacity, so (Enron's fall) isn't as critical," he said. "Other businesses in that area can pick up production. People can find alternative sources."

While the questionable affiliation between the Bush administration and Enron has garnered the spotlight, the firm's unsuspecting employees were clearly the biggest casualties of the collapse, Schlow said.

"One, employees lost their jobs and their pensions plans. Two, it could possibly affect other pension plans if people had significant stock in Enron," he said.

"You talk about an innocent bystander getting killed," Schlow added. "These people got killed."

It is uncertain as to whether the possible implementation of stringent government sanctions would thwart similar troubles in the future, Schlow said.

"It may be more a matter of cracking down on the existing laws," he said.

Meanwhile, Eisenstein likened the potential clean-up of corporate practices to removing a pimple from an elephant.

"If it has cancerous sores, it's not going to help," he said.