What I learned from the CFO of Enron about RAW and RAI

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Team Zero Comp member, Vidar, writes us about an experience he had while studying for his MBA and how it relates to 40K rules interpretations.

Tonight,  I listened to Andrew Fastow describe his part in the Enron scandal a few years back.  I should probably try to stay more focused on grad school but halfway through his speech, all I could think about was the RAW/RAI debate.

For those of you who don’t know the Enron fiasco, let me recap.  Enron was an energy consortium that was named “Most Innovative Company” in the US 6 times.  Andrew Fastow won the award for Best CFO.  Then he went to jail for that same act.  What did Enron do?  Well, they looked at the rules that governed corporate accounting and circumvented them.  Teams of Alpha-male, and female, problem-solving, competitive gurus (top lawyers, auditing accountants and management) found any way possible to maximize their profits by creatively working around the rules.  In the end, many of them were convicted and jailed.

So, how does this relate to tabletop wargaming and 40k in particular?  Well, listening to Fastow, I heard things that echoed from my times playing 40k.  When asked why they did it, he stated that they were, “Just following the Rules as Written.”  No not really, but what they really said was damn close and for all intents, the same.  Am I likening RAW folks to Enron management?  Yea, I guess I am.

Now, everyone who follows the rules is not a RAW guy/gal.  Certainly not!  Why then, you couldn’t get through a game at all.  You have to follow the rules and cheating is so…lame.  No, it’s the person who uses a poorly written rule to gain an advantage over his opponent in an exploitive way.  It is the person who looks for that poorly designed rule and bases their strategy around it. Enron management acted to technically comply with rules and not consider the underlying concepts at stake.  Those concepts were good governance and ethical

“How do you know what you are doing is wrong when everyone around you says it’s ok?”  Enron management acted to technically comply with rules and not consider the underlying concepts at stake; the “Intent,” you might say.  Those concepts for Enron were good governance and ethical business.  I know, I know: ethical business, big joke.  But they translate to the gamer in the form of respect for your opponent and good sportsmanship.

GW doesn’t write its rules to leave gaps for player exploitation.  There is an underlying Intent in their rules.  The Intent is usually understood by the masses, even if the rules as written allow the circumvention of that intent.  Take the argument that “Ignores Cover” doesn’t work on vehicles because it references wounds and vehicles don’t take wounds.  Now I think that it’s fairly understandable that the intent was that shooting that ignores cover, ignores cover regardless of the target type.  Not too tough of a stretch I think, but GW issuing FAQs is like the US government in closing loopholes; slow to produce and they can’t see how creative winners will break their system until long after it’s broken.

Now there is a subjectivity in RAI application.  We all know it but that’s not what is at stake here.  What’s at stake is the integrity of the game.  Some might think this a silly game but it’s as competitive as chess and as narratively deep as any novel.  It’s a great game, and if you’re reading this for this long it means something to you.  Don’t sully it.

The decision is not what’s in the rules but what they should say.  Even if breaking the RAI because the rules–through a labyrinthine logic chain–allow them to be broken; it doesn’t mean they SHOULD be broken.  In the absence of an over-arching authority in the form of well-written and clear rules, TOs are the front line in this battle.  They have to be the local arbiters.  For the most part, I have seen a great job from these folks in preempting exploitive RAW with Tournament FAQs.  That is fine but this is really a notice to those of you who find that RAW scenario and build it into your strategy.  Consider if you SHOULD use it against your opponents.  Maybe you and Enron management are closer kin than you thought.

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About Reecius

The fearless leader of the intrepid group of gamers gone retailers at Frontline Gaming!

36 Responses to “What I learned from the CFO of Enron about RAW and RAI”

  1. Phil October 25, 2013 1:47 am #

    This is a really good article, well done.
    A lot of the RAW advocates will try to use the view that lawyers and businesses will use RAW as an excuse for their behavior, obviously not knowing that in most cases, if you’re found to be breaking the spirit of the law but not the letter, you’ll still be judged as guilty.

    Even saying RAW vs RAI is admitting you know what the rule is intended to be but you’re going to try and break it, thats a real dick move.

    • Reecius
      Reecius October 25, 2013 9:07 am #

      I agree but I will say that sometimes RAI isn’t clear, even if you know the RAW is not 100% accurate. The issue comes when people disagree on what RAI is, and that to me is why I try to hold back from assuming someone is trying to hurt the game before I hear their argument.

  2. Marcus Scipio October 25, 2013 4:30 am #

    Great article! I agree wholly. My biggest frustration is with folks who take RAW to the extreme and act as if it were the only logical conclusion. Too many folks forget the inherent social contract in a game of 40k.

    • Reecius
      Reecius October 25, 2013 9:05 am #

      Yeah, playing pure RAW leads to bizarre and unfun situations. The game is about fun, after all. Even if you are a fierce competitor you can still play within the spirit and letter of the rules.

    • Vidar October 25, 2013 9:56 am #

      Social Contract. Great point!

  3. anonymou5 October 25, 2013 4:53 am #

    So now we have an article comparing tactics to Army Doctrine and one comparing rules interpretation to real business. FLG is the gentleman’s 40k site for sure

    • Salamanders4lyfe October 25, 2013 5:45 am #

      Does that make BoLs the “Hustler” of the 40k blogosphere?

      • Reecius
        Reecius October 25, 2013 8:56 am #

        BoK then becomes the Tabloids =P haha, and Tastey does it on purpose, too!

    • Reecius
      Reecius October 25, 2013 8:56 am #

      Hahaha, I was just thinking the same thing, and we have articles referencing Maslow’s Hierarchy of needs and the acquisition of knowledge, haha, we definitely aim high with our readership!

  4. Gangrel767 October 25, 2013 7:42 am #

    Great Article. Certainly some food for thought. I’d like to make a constructive comment. The font color for the main body of the article is very light and blends in with the background. I think the page would be easier to read if it were slightly darker. Look at the comments boxes for example. That font is a little darker and has a bigger contrast with the background so they are easier to read. Although it could just be my old eyes… lol

    • Reecius
      Reecius October 25, 2013 9:32 am #

      I will see if I can adjust the color of the text.

  5. Wilfred October 25, 2013 8:13 am #

    Great article, I remember Enron well, and its practise clears defines the RAW approach. But Enron also made up a few rules to their benefits, ‘ie mark-to-markets.’ The more I think about it really describes the mentality of the WAAC gamer.

    Tournaments players does have to think like Enron, the ultimate mission is to win and it is your failure not to ultitize all the methods at your desposal, including RAW approach. Yet Enron showed us the RAW approach destroys the integrety of the game. Bending rules destroys the ‘fun’ of the game.

    GW should have made a tigher ruleset, but in reality it is not possible with only their in house testers while there are so many WAAC players outside, and GW rules are inherently designed to favour the RAW approach for winning.

    I guess the only solution is to divide the player base in 40K into tournament groups and casual groups. I don’t suppose players from both sides would have fun if they play againist each other.

    • Reecius
      Reecius October 25, 2013 9:03 am #

      I detest censorship so I won’t ever tell anyone what to say, but your comment is flirting with a topic that gets my hackles up. Classifying people as WAAC or FAAC or whatever, is usually only going to end up in arguments and flame wars, a la BoLS. I really, really do not envision that type of petty squabbling for Frontline. However, I also believe in giving people the benefit of the doubt so I won’t assume you were trying to caste any stones.

      All I ask is that you think carefully before using labels like that. Saying tournament gamers are WAAC, or have to think like Enron really comes across as an insult in the context of this article. Maybe you didn’t mean it that way, but I couldn’t help read it that way as I, and a lot of the people that hang out here, are tournament gamers but are also ethical tournament gamers (as is Vidar, the author of the article). So I am not trying to scare you off at all, please join the conversation. Just be mindful of the language you use, please.

      • Bigpig October 25, 2013 9:18 am #

        I think his RAI wasn’t to ascribe that to all tournament gamers even if the RAW may have sounded like that. Certainly some tournament players do “think like Enron,” and it is those people who give the bad image of tournament players to those who come in for the first time and encounter them. ….just like Enron gives a bad image of business and capitalism. The authors little gig at ethical business shows the impact of that. Business isn’t inherently ethical or unethical, it is the people in the business at make it so. The same is said for us gamers. Sadly, our ethics as a culture are failing

        • Reecius
          Reecius October 25, 2013 9:26 am #

          Haha, well, played! Yes, you are probably right about the RAI in this case.

          You make good points and I agree that it is the responsibility of the individuals to make the choice to be ethical. People just get caught up in the competition and group think and lose sight of what’s actually important. Winning doesn’t mean a damn thing if you cheated or did it in a dirty way because you didn’t actually win. You don’t actually know if you are or are not the better player, it is only the illusion that you are. For some people that is enough but I think ultimately the knowledge that it’s all a farce will eat at them.

      • Bigpig October 25, 2013 9:20 am #

        I think his RAI wasn’t to ascribe that to all tournament gamers even if the RAW may have sounded like that. Certainly some tournament players do “think like Enron,” and it is those people who give the bad image of tournament players to those who come in for the first time and encounter them. ….just like Enron gives a bad image of business and capitalism. The authors little gig at ethical business shows the impact of that. Business isn’t inherently ethical or unethical, it is the people in the business at make it so. The same is said for us gamers.

    • Vidar October 25, 2013 10:04 am #

      Mark to Markets wasnt invented by Enron. Its an existing although rarely used accounting method. There is a problem with it because it marks securities to their market valuation and market valuations are fairly subjective. They did make up “Branding Leases” and innovated ‘Off-Books’ asset management.

      I agree that play testing is a major fail for GW. PP and Wyrd have very tight rules and that is due to PP’s 2 yr rule development cycle and Wyrd’s open-beta testing. GW needs to reconsider its insular rules publication policies. Getting their FW rules in line would be a big step too.

  6. bigpig October 25, 2013 8:33 am #

    Good comparison. I think, however, it is important to state that RAI can really only be relied upon when it is really obvious to common sense, other rules, and the majority of players out there. Your vehicle and cover save is a good example of this. Many times RAI can be subject to the same twisting for pesonal profit that occurs with the liberal interpretation of loopholes for RAW.

    Your article touches on a much larger topic of ethics in our culture as a whole. Whether or not rules SHOULD be broken, for many, comes down to “can I get away with it.” It is that disintegration of deontological ideals about right and wrong in our culture that created Enron and, on the smaller scale, allow people to delude themselves into believing they are justified to argue that vehicles don’t take wounds so X must equal Z.

    • Reecius
      Reecius October 25, 2013 9:33 am #

      Yeah, the easy path is not often the ethical path but in the long run doing things the right way is always better. Unfortunately, a lot of folks lack the maturity to see that until much later in life–if ever–when too many mistakes have been made.

    • Vidar October 25, 2013 10:11 am #

      Yea, I am just touching on the larger ethical issues involved because thats a much larger issue than I am prepared to tackle. And one, I wasnt particularly interested in publishing on a gaming website. You are making some valid points about society.

  7. jadedknight October 25, 2013 9:07 am #

    I see only one problem with this argument. It can easily be run the other way.

    Accountants and CFOs who implement what they personally believe is the intent of the law against it’s letter tend to wind up in one place: jail.

    You are right in that 40k is a social game, however social structures and group think can be every bit as destructive and ‘fun ruining’ as rules lawyers. When I first started out, one of the groups I played with didn’t use and didn’t want to use true line of sight. The argument being GW didn’t intend that you could shoot my big rhino through that window hole in the ruins. This unfortunately caused all sorts of complications and inconsistencies in game play. I think everyone in the circle now agrees that going to RAW here made game play better, but at the time it was a painful change. Before you rush to judge that their interpretation of RAI in this case was silly keep in mind that’s the entire problem. There is no objective standard to decide upon these issues. There is no such thing as common sense, but there is confirmation bias.

    As an aside while you are getting your MBA I highly suggest you spend the bulk of your electives on soft skills and skip things like advanced strategic analysis. It’s a much better future investment.

    • Reecius
      Reecius October 25, 2013 9:31 am #

      And therein lies the problem: what is RAi or RAW is not always clear. People are quick to get angry when someone disagrees with their interpretation of RAI or RAW and caste the other person as WAAC or FAAC or whatever and it is not productive. The other end of the RAI side is comp, and as I make 100% clear, I don’t agree with comp at all. I don’t hate it and I won’t not go to an event that has it, it is just not my preference.

      As with a lot of things in life, you have to thread the line between the two extremes and use your best judgement as to what is the right and wrong path to take.

    • Vidar October 25, 2013 10:21 am #

      I already have a soft-skill MA in War Studies so I am trying to leverage this time to get my quant skills up to snuff. Marketing a MA in War Studies was actually pretty hard even when coupled with my mil experience. Transitioning to corporate America, especially here in Boston, with all these brilliant kids, just makes me want to be capable of speaking to them in their language (quant) and to their conceptual frameworks.

      To your RAI Overboard problem, I completely agree. Getting bound to someone else’s concepts of what is “right” is just as annoying. I was showing a fellow gamer a White Scar commission I had worked on while at Frontline and this guy comments on the dreadnought first. He goes on about how WS’s dont believe in them and how he feels about it. If this guy had his way, the WS player couldnt use dreads. Thats crazy to me.

    • Alex Yuen October 25, 2013 11:16 am #

      Jadedknight. FYI. They didn’t went to jail for the intent of the law. they went to jail for the cover up. They was destroying files on what we call “off balance sheet financing”. Which is still legal but just you require more disclosure now. Also he plead out on his charges so no trail. out of 78 he plead only 2 counts so as you can see if they went to trail he might get off free.

    • Tangentical October 27, 2013 12:06 am #

      Not entirely true. Not a single Andersons (the auditors who were rather complicit in the Enron debacle) staff member or partner were tried or convicted re Enron.

      The partnership’s reputation was however destroyed and Andersons ceased to exist in short order with staff and partners gobbled up by the remaining big 5 firms (or post Enron big 4). The public and business community ‘decided’ that a line had been crossed and that the much vaunted Anderson brand was now sullied beyond repair.

      Preaching RAI over RAW however actually has some very shady democratic and free speech implications. Having a legal system able to ‘interpret’ the law as well as uphold it by applying their interpretation at any one time leads to uncertainty over what is and isn’t legal and can give exceeding power to the police force who can exert additional authority by capitalising on this fear and the uncertainty that would exist over individual rights and liberties.

      It isn’t as simple as many think and what may be considered as common sense can, in the hands of an unscrupulous authority, become a stepping stone towards a legislature with excessive powers over the individual.

      Now I am not supporting excessive use of RAW to support breaches of ethics but am more in support of a healthy combination.

  8. Alex Yuen October 25, 2013 10:38 am #

    O god not this again. I was on my 4th years of accounting when that happen. O god my audit class talks nothing but enron and how that change everything. BTW. I just want to say what enron did on the book wasn’t illegal. Just whats happen after that was illegal.

  9. Alex Yuen October 25, 2013 10:46 am #

    O I just want to make it clear the CFO didn’t went to jail for cooking the book. they did follow the RAI and in my class we talk about how they follow the laws to the T. He went to jail for the cover up on the “cooking”.

    • Vidar October 25, 2013 11:51 am #

      Alex you are wrong, he went to jail for 2 counts of wire and securities fraud.

      • Alex Yuen October 25, 2013 11:53 am #

        O read above that comment on that already.

  10. BeeCee October 25, 2013 11:43 am #

    I’ve been reading this site for the past month or so as i prepare for my first 40k GT and i decided to chime in on this.

    Great article and great discussion. It’s always a fine line we walk when dealing with RAW and RAI because we don’t necessarily know what the intent was on the rules in some cases. Thus we are forced to use them as written. So where do we make inferences and where do we just take it as RAW?

    I think for most of us we have a gut feeling about the intent of a rule even if there is a loophole but we never really know for sure. Ultimately the responsibility falls on GW to provide us with frequent FAQ documents/communication but they are very reluctant to.

    I think there is even a difference between the RAW player and the WAAC player. I have a couple of friends who insist that we play “by the book” but are very friendly players who i have very enjoyable games with.

    And i agree with the above comments about the very heady topics on Frontline! i feel like i should smoke a pipe while reading/commenting!

  11. Doc_S October 25, 2013 12:07 pm #

    I have a request for future articles like this, as a relatively new gamer to 40k, some of these acronyms are foreign to me. RAW Rules as Written and RAI Rules as Intended. I had to look up to figure out, same with WAAC Win at all costs and FAAC. (had to do some serious searching for FAAC lol which I believe is Fluff at all Costs?). So please in the future when using acronyms give an explanation of what they are for us who are new-ish to the hobby. I started playing 40k a year ago and have been to several tournaments and am planning a GT next year, so a lot of this old spite is completely new to me.

    Aside from my rant/suggestion for future posts, I always refer to the number 1 rule for 40k in the main rule book. If my opponent is getting frustrated with a rule and are not listening to reason IE fighting it so they have the advantage, not what is right, i immediately stop them and we roll off for it. Some people just want to have the advantage and I have been there before arguing rules to give me an advantage. Its part of any game, finding a weakness and exploiting it. The problem is, in a game like 40k you should be finding the weakness in your opponents strategy and exploiting that, not the game system itself. Fighting the game system is not a fun game of 40k, and some rules I agree aren’t completely sound or lack clarification, a good example of this is the new Grav weapons. I agree with the FAQ councils decision on Grav weaponry but a the same time I do have a valid argument for the Fluff that counters the decision and makes logical sense. However I am not going to be a dick and hold up a game for 20 minutes arguing, I will comply with the rules as posted.

    Again thanks for the great content FL; for taking the time to give this comparison to spark a good debate.

    • Reecius
      Reecius October 25, 2013 12:10 pm #

      Sorry for the acronyms, we sometimes forget that not everyone is hip to the lingo =)

  12. Fulcrum October 26, 2013 12:15 am #

    The real question is which philosophical view is leading to a better record & more tournament wins? Unfortunately, as is often the case, the least common denominator will likely prevail until something forcibly changes the landscape.

    • Reecius
      Reecius October 26, 2013 10:21 am #

      Sad but true. The cream rises to the top bud so does the shit.

  13. Acrimonious October 27, 2013 9:20 am #

    http://www.businessinsider.com/world-series-game-3-obstruction-call-was-correct-2013-10

    This article and video about what happened at the World Series last night is very interesting to me in a rules lawyer sense. Oh how I wish 40k tournaments could be umpires like this. We need 3 judges for every table and slow motion replays!

    • Reecius
      Reecius October 27, 2013 11:29 am #

      Hahaha, that’d make for looooooooooooong games! Our philosophy is to stay out of the games as much s possible and let the players play the game. We try to only step in when needed or asked.

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