Enron: The Smartest Guys in the Room

"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.

This film is a profoundly entertaining chronicle of American corporate power run amok. Profound because as it dramatizes the rise and fall of Enron, the film casts a longer shadow over the still largely unchanged corporate environment that spawned this smoke and mirrors company. Entertaining due to clever use of storytelling devices, imagery and soundtrack, despite what looks to be a low budget.

The film's strength is in its portrait of the massive "group think" inside and outside of the corporation that supported Enron's rise. It is astounding and chilling to look back on the cheer leading role played by banks, financial media, accounting firms and government. And though Enron, the film, may be weak on explaining how the company built itself up from a simple gas pipeline business to a post-modern corporate megalith, it was probably a wise choice to leave detailed descriptions of the financial manipulations to the book of the same name. The film, does though, miss an opportunity early on to provide a basic explanation of the central paradox of Enron -- earning heaps of money by exploiting commodities trading and accounting methods, while losing heaps of money in real world ventures. Enron set up its first commodities trading desk to capitalize on inside knowledge of the gas business, and then tried to replicate this model with water, broadband, electricity, etc. In actually a trading firm, Enron evaded investment firm regulations by portraying itself as an industrial firm.

Yet, despite some shortcomings, the storytelling is powerful, especially the eye-opening dramatization of Enron's role and the political manipulations behind the California energy-crisis. After viewing the suffering of average Californians, juxtaposed against the callousness of Enron's West Coast energy traders, it felt good to see Kenneth Lay walking in handcuffs.

More than once, the phrase, "this can happen again," echos in the film. It has happened before -- leveraged buyouts, the Savings and Loan crisis, the burst Internet IPO bubble, the 1920s Stock Market crash. A new financial vehicle generates untold riches for some, goes bust, and millions, sometimes billions ... disappear. Enron, the film, is the textbook on how one corporation recently stole from investors, employees and its "customers."

Ask why do we keep on letting this happen.

I went into viewing this film with the expectation that it would be a Michael Moore-like anti-corporate propaganda piece, portraying executives as 2-dimensional robber-baron caricatures, and the entire capitalist system as a failed experiment.

Thankfully, I was quite wrong. I found the film to be both factual and evenhanded, and it's portrayal of the key Enron players provided depth, character, and even compassion at times.

There's no doubt that Enron was the defining business fiasco of the last 20 years, but what struck me about this films presentation (and which was wholly lost in most of the media coverage) is that its downfall was not entirely driven by greed. At least, not at the highest levels of the firm.

The primary contributing factor to the disaster was, in fact, ego. These guys didn't wake up in the morning looking to rip off their employees and shareholders and tank the company. They had (what they thought was) a revolutionary idea on how to sell energy in the marketplace. As far as they could tell, it was dynamite on paper, and they had their egos so wrapped up in these ideas, that they became completely blind to the reality that they were hemorrhaging capital because it simply didn't work in reality. It got to the point that in order to conceal their intellectual failure, they embarked on ever-more radical measures to hide the firms losses. Mind you, they all seemed to genuinely believe that eventually these new ideas would begin to work, and they would recoup all the losses and then some. At times, it seemed to resemble the attitude of a gambler who can't get up from the card game because he's waiting for that one perfect hand that never comes, and loses the house and car in the process. It's not what he intended when he sat down, but its the result nonetheless.

Of course, Enron was cheered on by the irrational exuberance of the late-90's boom market, which only served to enable this attitude, and in fact attracted a lot of genuinely greedy and sleazy traders, brokers and banker who were eager to make a buck off of the Enron business model.

Which leads me to the one disappointment that I have with this film, which is that it omits entirely the role that the Clinton Administration played in fostering the irrationally exuberant Wall Street culture of the era. If Ken Lay and Jeff Skilling were the degenerate gamblers, Bill Clinton was the enabling wife who never put her foot down and demanded he get help or get out. (The film, does, however detail the business dealings that Enron had with the Bush family... they should have either left politics out, or been more evenhanded in this regard.) What is remarkable, however, is the relatively short amount of time this all occurred in. Enron went from modest pipeline company, to energy juggernaut to total bust in, what, 5-6 years? Amazing.

Some will walk away from the Enron story convinced that the system will never work. I, however, see it differently. To me, the system worked. If it has proved anything, it's that no matter how rich, powerful or influential you are, you simply can't cook the books for very long in a free market environment before everything comes crashing down around you in a big way. The Enron story should make powerful executives think twice when tempted to do something unethical, regardless of intention. Which really should be a comforting thought for everyone.

See this film. It's definitely worth the time.

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 just saw this movie at Talk Cinema in Philadelphia. It was an excellent depiction of hubris and greed. The clips of Ken Lay et all were self serving and only seemed to intensify their greed. I would have liked more exploration in to the ties with the Bush Dynasty but that said it was an interesting intense film. Definitely one that I would be happy to recommend. There is one critique I would make is that although the film touched on the many lives that were ruined by the Enron Scandle,it did not give them a real human face.

In the eighties we called people like the Enron Executives "Masters of the Universe." Now we can call at as we see it, Over grown former nerds with no morality and no conscience.

.