JUST PROFOUNDLY, ETHICALLY RETARDED

ENRON: THE SMARTEST GUYS IN THE ROOM
Directed by Alex Gibney; written by Alex Gibney, based on The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron by Bethany McLean and Peter Elkind; cinematography by Maryse Alberti; original music by Matthew Hauser and Marilyn Manson; edited by Alison Ellwood; narrated by Peter Coyote
Featuring: Ken Lay, Jeffrey Skilling, Andrew Fastow, Bethany McLean, Gray Davis, Mike Muckleroy, Lou Pai, and Sherron Watkins. Running time: 110 minutes



Reviewed by Joel Johnson

It’s almost summer, though you’d hardly know by how cold and rainy it has been in the great state of Maine during April and May. However, regardless of the weather, the summer film “silly season” has begun. Summer blockbuster movies are designed to entertain us by giving us thrills and making us laugh—not trying to make us think. A classic example of this is the final installment of the popular Star Wars space adventure series: Star Wars III: Revenge of the Sith. Since the 2004 election is history, one might expect the documentary field to be clear of ones that are politically themed. Yet here we are faced with Alex Gibney’s superb documentary about Enron, and it does have a political message.

Technically, one could argue that the film is not about politics. Fraud—and a massive fraud was what Enron perpetrated—is not a partisan political issue. To tweak the campaign put forth by Sojourner’s magazine by replacing a word beginning with the letter G with one that rhymes with it—fraud is not a Republican…nor a Democrat [characteristic]. While politicians may perpetrate fraud, it is a failing of character and not one of political affiliation. However, the political power vested in government is the power to establish and to enforce rules for conducting business in a variety of fields. It is, in a word, the power to regulate that activity. The use, misuse, and disuse of that power are very much issues related to the Enron story.

The great gift to the public from Alex Gibney’s film is to succinctly explain exactly what was done at Enron. The average citizen probably has some concept that the Enron stock price was somehow manipulated illegally. They also know that Enron executives, realizing financial ruin was imminent, began selling off shares left and right. What was done left rank-and-file workers jobless when the company declared bankruptcy and nearly bereft of their retirement since they were invested in Enron stock. The film shows how the bright, shining star of late 80s and 90s business growth was built on a financial house of cards and one that involved a very “creative” accounting practice of claiming profits yet unrealized, shell-game financial transactions, conflicts of interest, winking at illegal behavior, and intimidating those doubters not mesmerized by Enron’s rocketing stock price. While that price continually went up, the return on Enron’s real business ventures was much more earthly.

The piecing together of an enormous number of film segments, television news clips, and audio tapes to support the research work of writers Bethany McLean and Peter Elkind helps make the individuals behind this crime—in fact a series of crimes—much more vivid to the filmgoer. Peter Coyote gives us a thumbnail sketch biography in his narration. We hear the friends and business associates describe the men who ran Enron. They were nerds who had developed a cowboy mentality and certainly liked to think they were, in fact, the smartest guys in the room. They turn out, as all such self-adulation usually does, not to be quite as smart as they thought they were. We learn that Enron Chairman Ken Lay was an ambitious son of a Texas preacher. We meet the boyish financial wizard Andy Fastow, given the responsibility for making the perfect soufflé of Enron’s books. We learn that accountants (the formerly redoubtable accounting firm Arthur Andersen), bankers, and attorneys were perfectly willing to eat his soufflé instead of demanding “the beef.” We see the transformation of the nerdy CEO Jeff Skilling into a matinee idol after eye surgery eliminated his nearsightedness. We hear their speeches at business events and their testimony before Congress. We also receive the testimony of interviewed coworkers and the damning candid statements of Enron workers recorded from phone conversations. Jeff Skilling’s testimony before Congress, delivered with greater conviction than most actors manage in their best roles, emerges as a series of grotesque lies. We meet Sherron Watkins, the Enron employee who finally blew the whistle by having the guts to say, “the emperor has no clothes.” We see how the Enron business culture fostered high-risk, self-indulgent macho behavior that placed little to no value on ethics. This utter disregard for ethical conduct and how it appears to have extended to the religious faith from which those ethics emerged is visually captured in the dwarfing of a lovely quaint stone church in Houston by the futuristic glass and steel behemoth that housed Enron headquarters.

The Enron misbehavior profited a few insiders while defrauding the business’s workforce and its investors. This may seem to be simply a business matter. However, in 2001 the sleight of hand was beginning to have difficulty in sustaining the incredible rise in Enron’s share price. Taking advantage of the deregulation of energy, Enron kept its financial boat afloat by milking profits from artificially created rolling energy blackouts in California. The blackouts, achieved by arbitrarily shutting down power plants, increased the price of power, allowing Enron to gain large profits that it was not able to find in any other segment of its business. In the words of one of the film’s interviewees, “a business that had been a reliable provider of power at fair prices for more than a hundred years overnight became a casino.” California Governor Gray Davis, a possible Democratic candidate for president in the 2004 election, appealed to the Bush administration for help. Even though California’s deregulation was predicated on deference to the federal government, the president failed to act to help California. Davis became increasingly unpopular and was the victim of a recall election that put Arnold Schwarzenegger in the California governor’s mansion. Interestingly, Ken Lay has had a well-documented cozy relationship with the Bush family, and Enron officials had a meeting that included movie star Arnold Schwarzenegger before he became candidate Arnold Schwarzenegger. The administration’s proposed energy policy was crafted at a 2001 meeting between Vice President Dick Cheney and Enron officials—the notes for which have been the subject of litigation that went all the way to the Supreme Court. It may not seem that extraordinary to meet with members of a business community that might be affected by proposed regulation. However, once you see this film that so well documents the rampant corruption at Enron and the absolute failure of both government and the market economy to provide the needed checks and balances on this type of behavior, you will not see this as simply exercising “executive privilege” to withhold information.

This is a very powerful film in addressing individual moral failing. It is distressing that only one of several Enron employees who participated in the film seems to have any recriminations about his role. This exemplifies how people can commit potentially morally repugnant acts if moral responsibility can be ascribed to an authority figure. The moral universe in which Enron functioned clearly did allow and likely encouraged the commission of unethical and illegal acts. The film shows how political and business decisions can have far-reaching consequences that can affect sovereignty of the political process and the well-being of millions of people. Though some of these same issues were addressed in Jennifer Abbot and Mark Achbar’s impassioned film The Corporation, this film is much more effective in adding humor to its thought-provoking story. This doesn’t make the story better; it just helps it go down easier. It really would, however, be great if for once a film like Enron: The Smartest Guys in the Room could be a blockbuster.
 

 

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