Enron: The Smartest Guys in the Room

Enron: The Smartest Guys in the Room, had been in my Netflix queue so long that the whole scandal seems like ancient history. The film is almost ten years old, and many of the participants are dead or in jail, but there is still a cautionary tale here regarding regulation or deregulation, that is the question.

Enron was an energy company built by Kenneth Lay. At first it dealt with natural gas, and then bought an electric company. It became one of the biggest companies in the U.S., but as the tech bubble burst (they had gone into the broadband business as well) weird accounting practices began to be noticed. Namely, the stock was going up while the company was losing money.

It turned out that there was book cooking going on, with the debts hidden in partnerships by the CFO, Andrew Rastow. Questions were raised, specifically by an article in Forbes, and before the dust settled, the executives sold their stock, making millions, before the company declared bankruptcy.

If that weren't enough, traders in the West Coast office played havoc with power in California, causing rolling blackouts. The traders are recorded as having no concern with the citizens of the state, just in making money. Governor Gray Davis took the fall, while Arnold Schwarzenegger, who was cozy with Lay, was the new governor.

Lay was also cozy with the Bush family; in fact it was rumored he would be named Secretary of Energy. President George W. Bush did nothing to help Davis in California, even though it was a federal issue.

Lay is not the only culprit, in fact most of the movie is spent discussing Jeffrey Skilling, the COO of the company, who in Congressional testimony claimed to know nothing of what was going on. He repeatedly does not answer the question, "How did Enron make money." That's because, to use many metaphors, it was either a house of cards or smoke and mirrors, take your pick. Another common metaphor is the Titanic. But, as congressman point out, the captain of the Titanic went down with the ship, and didn't escape with hundreds of millions of dollars.

There is also a mysterious character named Lou Pai, who was CEO for a time and is described as having two motivations: making money and a "peculiar interest in strippers." He later married a stripper, and because he divorced he was forced to sell his stock, which saved him from prosecution.

This is the kind of shenanigans that made communism popular. Capitalism works great, but there has to be regulation, because shitheels like these have no ethics or morals. They destroyed the pensions and 401Ks of their employees, and drove the company into the dust, but aside from saying, "Sorry!" pocketed millions. Fortunately their cronies couldn't help them. Skilling went to prison, where he still is, while Lay died before he went to trial. Another unfortunate executive, Cliff Baxter, put a bullet in his head.

The director is Alex Gibney, one of the better documentarians at work these days. He has a very good sense of rhythm, knowing when to use interview subjects and footage from congress or stockholder meetings, and has a humours way with music. There are some great Tom Waits songs on the soundtrack (including "God's Away on Business") and, when talking about the smoke and mirrors part, Traffic's "Dear Mr. Fantasy."

But we never learn. Deregulation later was a prime reason for the economic collapse of 2008. They should play this movie in Congress anytime some idiot wants deregulation. The higher you go up in business, the more greedy you are, apparently.