Enron: The Smartest Guys in the Room

The chief characters in the Enron debacle all seemed to be functioning on the same mantra, that Gordon Gekko line from "Wall Street" (1987) that epitomized the 1980s: "Greed, for the lack of a better word, is good." Except what Ken Lay, Jeff Skilling and Andy Fastow did wasn't in the 1980s, but in this century and they blithely and without any compunction did it for personal gain while tens of thousands were left with nothing.

The Enron scandal was a tough one to understand, at least to me it was, because you could never quite figure out what Enron did. And director Alex Gibney breaks it all down matter-of-factly, never taking sides, never being judgmental, to show us what happened. Of course, he really doesn't need to be judgmental because the actions of Lay, Skilling and Fastow (and a few others) speak volumes.

Gibney's film very well could have been a convoluted mess. But he never loses sight of the fact that this is essentially a story about people. Not only the masters of the universe whose hubris eventually brought them down but, more importantly, the people whose livelihoods depended on what Lay, Fastow and Skilling did and who, unlike those three, didn't have millions to fall back on.

It's impossible not to feel incensed by what they did. Lay, Fastow and Skilling destroyed countless lives, yet they left with millions. There's a moment when Lay bemoans that his net worth dipped from $20 million to, I believe, $6 million. Yeah, tell that to the Oregonian utility worker, whose $340,000 nest egg was eventually only worth $1,200 after Enron stock tumbled in the wake of the scandal.

What's ultimately devastating about this film is listening to the tapes of Enron traders joking about how they were holding California hostage and letting people there suffer without electricity. These chaps are cold, callous and exemplify the Enron environment.

This is a fascinating film because it exposes these guys for who they are. And after listening to those interviewed in this film, it's impossible to believe Lay and Skilling were somehow oblivious to it all. How else could you explain why they insisted Enron employees invest in the company stock while they themselves were cashing out?

What's equally infuriating is realizing how Wall Street sucked up to Enron and how investment firms turned on anyone who dared to question Enron's power.

Of course, it's not surprising at all to see Lay's connections to the Bush family. But I am certain Dubya really didn't know very well someone he called "Kenny Boy." Just as, I'm sure, W's photos with Jack Abramoff mean absolutely nothing, either.

There's a moment in "Wall Street" when Bud Fox asks Gordon, "How much is enough?" And Gordon replies, "It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another."

That's exactly what Enron did under Lay and Skilling. Except they did it on the backs of tens of thousands of hard-working Americans who lost pretty much everything. I can only hope the American justice system does right by all those workers.

The documentary "The Smartest Guys in the Room" is based on the excellent book by Bethany McClean and Peter Elkind. If you work for an American corporation, have ever owned stock in a corporation, or have mutual funds, you must see this movie. It gives a clear eyed view of what can happen in our society when greed really is considered good. The movie accomplishes what few in this genre have done: It is informative and also entertaining. Some of this is due to the behavior of Enron executives. For example, one frequented strip clubs every night and made his staff come along. Naturally that requires video of strippers. Some of the most damning video is from Enron execs themselves. They never dreamt they would be caught. Hubris gone wild. Go see this movie. Take friends with you. You will be glad you did. First rate film all around.

I caught this documentary by chance on HDNET. I was VERY surprised and riveted for the two hours. Finance is my life. I am astounded at the massive amount of apparent complicity on parade with this story. The tremendous greed and bold face lies demonstrated as the story took its turns are the makings of the best thriller novels (sadly, this brings new meaning to "Reality TV"). I've been thinking about this since Friday: these are some of our best and brightest - what ever happened to their ethics, their honesty? It appears that too many were compromised get get their piece of the action. Big Action!~ I have the feeling this is only the tip of the iceberg at Enron - however, the movie is a tremendous collection of some VERY interesting events. Hats off to Bethany, Peter and Alex for a great movie.

"Enron: The Smartest Guys in the Room" is an excellent introduction for the general public to the scandal for someone who didn't hear first-hand the warnings about the New Economy that sneered at the responsibilities of a public company or read the articles in Fortune, Wall Street Journal, NY Times, or Business Week while it was all building up, then come tumbling down.

While the film leaves out some of the technicalities, it does an entertaining job of combining talking heads, lively graphics, news clips, incendiary dramatizations (such as of busy, noisy shredders), company documents and whistleblower-obtained stunningly damning audiotapes, web broadcasts and video tapes to document how a major company could grow out of smoke and mirrors to become the largest bankruptcy of its time, bringing down countless victims with it.

Establishing an arresting time line that serves like a ticking clock, the film is excellent at visually demonstrating how other corporations, particularly lenders and brokerages, profited from not revealing the truth.

The filmmakers particularly gleefully accent the company's political connections, going beyond the popular "Kenny Boy" friendship of CEO Ken Lay with George W. to extend to the Bush clan and inner circle, including the Federal Reserve's Greenspan, to hone in on how it fomented self-serving deregulatory policies, with a special emphasis on California and its frighteningly manipulated energy, and resulting political, crisis.

The filmmakers do make some of the talking heads seem objective when they actually have their own profitable axes to grind, such as shareholder attorney William Lerarch, and let the Johnny-come-lately legislators look a little too good as they puff up at the Congressional hearings.

A bit too much is made of the executives as former nerds, as these guys weren't computer geeks; rather there were class issues at work that are hinted at in the brief biographies in the culture of traders who were entrepreneurally lifting their incomes by gambling. At the same time, whistleblower Sherron Watkins's actions and motivations are not emphasized as particularly heroic in going against the company's macho culture (the many Deep Throats cited in the credits as anonymous sources are amusing).

A delightful range of popular music is also used to emphasize points, from Tom Waits to "God Bless the Child," as well as popular culture references from "The Simpsons" to "Gordon Gekko"'s defining quote also keep the film from just being like a dry episode of PBS's "Frontline". I presume the title itself is meant to recall the classic laying bare of the men who got the U.S. mired in the Viet Nam War, Halberstam's "The Best and The Brightest." The film does slight the clear-eyed folks who were warning about the declining ethics in the accounting profession and the lack of fundamentals in the bubble investments as Enron and its ilk were on the way up -- and who were vilified in the business community for their Cassandra pronouncements.

The film does make the Enron situation seem too unique. While personalizing the stories around the head people at the company --especially as they transformed from geeks to power brokers --makes the story easier to follow in a movie, it makes this corporate culture unusual. It also lets off the management consultants, let alone the business schools' emphasis on stock price analysis, who were cheerleaders for these techniques; McKinsey and Harvard spawned at least one of the colorful figures profiled here.

This kind of egotistical "I'm top of the world, Ma" attitude in business was also typical of the Rigas at Adelphia in Pennsylvania, Ebbers at WorldCom in Mississippi, and Scrushy at HealthSouth in Birmingham, Alabama, and the just dethroned Greenberg at AIG scandal in the heart of Wall Street, shows that enough chutzpah and money can deflect anyone, anywhere, using the same techniques -- a ruthless, macho corporate culture that forces out anyone who disagrees, browbeating regulators, hiding secret accounts and spreading around manipulative corporate philanthropy.

At a NY Financial Writers' Association panel as the Enron story was breaking, they did an introspection that unfortunately is not provided by the film, on why they didn't report earlier that the emperor had no clothes (as one of the sub-chapters in the film puts it). The consensus was that the journalists realized they mistrusted the motives of the warners more than they doubted the motives of the corporate executives who were issuing the bravado reports and deflecting timid questions, even though the journalists too late realized that the executives had way more to gain than the Chicken Littles and they were intimidated by their own lack of accounting expertise to recognize the sliding slope of accounting ethics (though the film does very briefly touch on how the CPAs early on accommodated the bubble by too easily officially approving the now notorious "mark to marketing" accounting procedure that permitted the booking of goods not yet obtained, though there's no mention of casually lax acceptance of external auditing firms to simultaneously do internal auditing and profitable consulting).

McLean, a co-writer of the film whose book is the premise for most of the film, did supplement the film in an interview on Charlie Rose that should be included on the DVD by naming the "shorter" (an investor who gains if prices go down) who first had tipped her off, though she didn't there mention the local Houston business reporter she cited at the panel who was the very first one to report suspicion of Enron's numbers. She also clarified on the show that while her article in Business Week is now seen as the beginning of Enron's end, her actual findings were very mildly stated, particularly compared to the full truth as it came out, and only aroused suspicions by the ferocity of the company's denials.

Even as the film concludes with an it could happen again warning, with no analysis if Sarbanes-Oxley will help, it places too much emphasis on the uniqueness of Enron.

"Enron: The Smartest Guys in the Room" directed by Alex Gibney takes a moment to explain in vivid detail about the rise and the fall of that giant of giants, Enron. Based on the book by Bethany McLean and Peter Elkin, this documentary holds the viewer glued to the seat because one cannot believe, for a moment, what one is watching on the screen.

The great debacle of the beginning of the century was the Enron downfall. At the same time, it is a cautionary tale for a lot of people about the way some unscrupulous manipulators can wreck havoc in the lives of the people that give their lives working for a any corporation. The Enron workers paid the ultimate price because a few people at the top had an unstoppable greed.

Mr. Gibney is smart in presenting the facts without taking sides. The director is not making a moral judgment at all, he is just letting us absorb how Enron operated and how it was able to pull the wool over everyone's eyes in believing this was the greatest company in the world.

Not only did Enron go down, but it took the Arthur Anderson accounting firm as well. There are thousands of people that are victims of this reckless disregard for the people under these scheming executives, who thought of nothing, but themselves. It's ironic that Jeff Skilling is paying more than twenty million dollars for his own defense, and who knows how much more will Kenneth Lay and Andy Fastow pay to star lawyers in their legal processes.

Ultimately, the real winner seems to be the oriental executive, whose name I don't recall, with an appetite for strippers who ended up being the biggest landowner in Colorado and now is living happily ever after in Hawaii. Compare that picture with the people the Enron workers who lost it all and must now make ends meet with little.

The Enron tragedy should be taught at Harvard as Greed 101, or how to get away with murder in America.