There was no fraud with GE and what happened with Capital played an enormous role in the company's demise but Immelt does warrant a huge amount of blame. Similar to what happened with our football program from immediately after RE left the first time until RE left the second time, an intentional effort to drive it into the ground would not have done a better job at destroying something than what occurred.
Capital's demise was mostly due to hubris but there were mitigating factors. There's an old Wall Street adage "don't confuse a bull market with sound investing". Capital was basically minting money for the ten year stretch that began shortly after Black Monday (October 1987) as that event led to many being far more diligent and discretionary in private investments and GE Capital was in a position to finance solid deals that many banks were unwilling or unable to get involved with. The environment was ripe for quality projects (especially in commercial real estate development) in need of capital. GE Capital did not need to do a lot of looking to find these potential deals and it took only a moderate amount of effort to determine if the prospects were favorable or unfavorable.
Once the internet bubble began (mid 1990's) they had become a bloated company. They had no issues adding a number of very high level employees as they felt this would allow for more deals, leading to more revenues, so the competition among much of their staff was no longer determining if deals were worth closing, but just in adding as many as possible (to justify their employment). They were involved with a tremendous number of bad deals (by the numbers prior to close) that were approved solely due to unrealistic projections, added to the financial models, solely to give the deals a passing grade.
It's sad what happened there but it was as obvious as knowing that once you move from December to January the year changes. I remember arguing with a few of their VP's (they would give almost anyone that title) about deals they bragged about closing that made no sense to me (my firm at that time among other things would help with due diligence on multiple matters. so I could see quickly if something was economically feasible). For the record, at that time my now ex was a GE Capital employee, as were a couple former coworkers from roughly a decade earlier. I knew quite a few of the players personally and had countless discussions over dinner parties, etc. about their led at Capital recent deals.
