Who’s Watching the Watchdogs? TUNED IN

Enron has become a symbol for everything that’s wrong with Wall Street and Corporate America.

The energy trader’s stunning collapse exposed a watchdog system that was supposed to protect investors but failed to sound alarms about the company’s dubious finances. As many investors are painfully aware, the conflicts of interest on Wall Street and in executive suites go well beyond Enron and its discredited accounting firm, Arthur Andersen.

In tonight’s “Frontline” presentation, “Bigger Than Enron” (8 p.m., KCET), correspondent Hedrick Smith examines an oversight system gone soft and asks: Why did the safeguards fail, and what’s being done to fix them? Smith offers no simple solutions, but a frank discussion of the issues.

“Many of these so-called corporate watchdogs are paid by the corporations themselves,” says investment manager Jim Chanos, noting that auditors, bond-rating agencies and brokerage analysts often are compensated, at least indirectly, by the companies they cover.

In the six months since Enron imploded, change has come slowly, but Harvey Pitt, head of the Securities and Exchange Commission, says his plan for accounting reform, being unveiled this week, will restore investor confidence.

Viewers may nod in accord when Smith replies, “I hope you’re right.”