Weekend Film Recommendation: Enron – The Smartest Guys in the Room

enron

How did one of the country’s largest companies go from riches to rags almost overnight, if it ever truly had riches in the first place? That question is skillfully and intelligently answered in this weekend’s film recommendation: Alex Gibney’s 2005 documentary Enron: The Smartest Guys in the Room.

The title refers to Ken Lay and Jeff Skilling, who convinced themselves and the world that they had a created a new kind of company that could make unprecedented profits in the energy sector. As one insider puts it, as each quarterly report approached it seemed the company was not going to make its numbers yet somehow it always did, and then some. Enron’s astronomical reported profits did not gain credibility in a vacuum: Its books were audited by Arthur Anderson, its accounts were interconnected with those of some of the nation’s most trusted financial firms (e.g., Merrill Lynch) and all the “objective” stock analysts were singing the company’s praises. But of course it was all a lie, and it unraveled with shocking speed and horrific destructiveness.

This movie adroitly combines interviews of journalists, former Enron insiders and political figures with archival news footage (e.g., Skilling and fellow crook Andrew Fastow’s Congressional hearings) and some truly damning movies made by Enron executives themselves. Although it’s a bit long-winded at 110 minutes, the film has an admirable ability to explain even to financial novices how Enron executives defrauded investors (not least its own rank and file employees) as well as put California through living hell by intentionally starving the state of electricity.

When this muckraking documentary came out, some critics complained that the film massaged the facts for the sake of left-wing axe-grinding. The narrator being staunch anti-capitalist Peter Coyote and one of the key interviewees being the lawyer who led the class action suit against the company (Bill Lerach) could trigger worries for some viewers that the film is simply comfort food for socialists. But any concerns about bias disappear as the film unfolds because the perpetrators so thoroughly hang themselves before the viewers’ eyes. The film accuses Enron of dodgy “mark to market” accounting and backs it up with Skilling himself appearing in a company produced comedy sketch where he brags about the phony nature of Enron’s books. Likewise, the accusation that Enron traders delighted in destroying California with contrived energy shortages and price gouging is immediately backed up by audiotapes of traders laughing over doing just that (Most disgustingly, cheering on a raging wildfire because it is damaging power lines).

Gibney has done a public service with this movie, but it doesn’t feel like eat your peas viewing. It’s fascinating, disturbing and compelling throughout. And also, there is something refreshing about a movie in which white collar criminals who steal billions actually go to prison in the end. Those were the days.

p.s. Interested in a different sort of film? Check out this list of prior recommendations.

Author: Keith Humphreys

Keith Humphreys is the Esther Ting Memorial Professor of Psychiatry at Stanford University and an Honorary Professor of Psychiatry at Kings College Lonon. His research, teaching and writing have focused on addictive disorders, self-help organizations (e.g., breast cancer support groups, Alcoholics Anonymous), evaluation research methods, and public policy related to health care, mental illness, veterans, drugs, crime and correctional systems. Professor Humphreys' over 300 scholarly articles, monographs and books have been cited over ten thousand times by scientific colleagues. He is a regular contributor to Washington Post and has also written for the New York Times, Wall Street Journal, Washington Monthly, San Francisco Chronicle, The Guardian (UK), The Telegraph (UK), Times Higher Education (UK), Crossbow (UK) and other media outlets.

4 thoughts on “Weekend Film Recommendation: Enron – The Smartest Guys in the Room”

  1. Don't know; Just because they were guilty of a lot, doesn't establish that the documentary doesn't exaggerate the extent of their guilt. The perpetrators hanging themselves before the viewers eyes is what you're going to expect of a biased documentary, just as much as a fair one. The biased documentary will just hang them higher, and omit any complications that might make them look less than satanic.

    Still, I'm prepared to believe it's not as dishonest as, say, the average Michael Moore film.

    1. Have you seen the movie? I saw it 10 years ago in a full day of doc screening.

      The movie was no different than the media reports we’d already seen, and these crooks avoided being convicted in the press for ages more smoke screens, mirrors, and dodgy lies.

      What, precisely, would an amelioration of the crimes of Lay, Skilling and Fastow look like? Annual appearance at a celebrity golf tournament for a children’s hospital? They probably did lots of those. Mighty big of them.

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