Alex Gibney, “Enron: The Smartest Guys in the Room” (2005)
A bit gimmicky in parts, especially in its transitions, but overall this documentary on the biggest corporate bankruptcy in pre-2008 US financial history is a riveting morality tale on the astonishing rise of energy corporation Enron and its equally astounding fall. Even with its chronological structure, the film exudes drama and an unreal and rather inhuman energy behind the company’s rollercoaster rise to fame and infamy. I can’t help but think that the company’s founders, executives and traders not only couldn’t believe their luck but also kept on pushing it to see how far they could go without being caught, knowing all the while that the more they pushed, the more likely they would be arrested, the more likely the company would fall – and fall hard. I also wonder if, had I been in their situation, whether I also would have pushed my luck and gambled hard, just as they did, if the money was continually flooding in my direction as a result of my misdeeds.
Enron begins drily enough with its founder Kenneth Lay, the Missouri-bred son of a Baptist preacher man, imbibing the ideology of free markets and deregulation, establishing Enron as an energy company in the early heady days of US President Ronald Reagan’s first term during which he set the ball rolling by sacking striking air traffic controllers campaigning for better wages and working conditions. Lay soon finds willing people to work for him and with him – firstly, two crooked traders engaged in risky trading and profit skimming who brought millions to the company, then later Jeff Skilling, Andy Fastow, Lou Pai among others – and with insider trading, the creation of dummy companies to hide debts, the declaration of profits that haven’t yet been earned and various creative accounting schemes, Enron grows very quickly indeed. Such quick growth though comes with expectations both within and without to do better and bigger, and the corruption begins to infiltrate right through the company culture. Skilling himself institutes a cut-throat culture in which employees are forced to compete among themselves in ever more predatory and pitiless behaviours if only to save their own hides from the sack.
Narrator Peter Coyote provides enough background and framework for the interviewees to tell their sides of the tale. Included among the interviewees is Fortune reporter Bethany McLean, co-author of the book “The Smartest Guys in the Room” on which the film is partly based; she and Enron whistle-blower Sherron Watkins emerge as the heroes of the film. A trader appears repentant as he recounts his involvement in the energy market manipulations that took advantage of California’s deregulation of its electricity and led to the rolling electricity blackouts that resulted in billions of dollars’ worth of real damage to that state’s economy and in various wildfires in parts.
One would think that the rollercoaster ride that was Enron’s history would be enough for this documentary but Gibney resorts to some cheap tricks to pad it out – fortunately the tale itself is compulsive enough that such glitches can be forgiven. The main deficiency of the film is to concentrate mostly on the central figures of Lay, Skilling, Fastow and their fellow rogues; while there is mention of other firms that helped Enron in its criminality (auditor Arthur Andersen being one guilty party that ended up being destroyed by Enron’s downfall), the film fails to address the central problem behind all the corporate shenanigans, this being the corporate capitalist system, the assumptions and values it relies on, the thinking, the behaviours and the particular cultures it generates as a result, and – most of all – the overall political culture, represented by the Bush family (members of which were close buddies of Kenneth lay) and itself shot through with layers of corporate corruption, that encouraged it. Instead there is a bizarre detour into a shallow investigation of Stanley Milgram’s famous Yale University experiments on authority and compliance, with the insinuation that ordinary people – the traders, the middle-level management – in the company are as much to blame as the Enron executives. There is nothing about how the Social Darwinist culture deliberately imported into Enron by Skilling might have created fear among most employees and stoked psychopathic behaviour in others.
What’s even more breath-taking than the corporate crimes is the actions of Lay, Skilling and some other senior Enron executives as they see their version of the Titanic sailing into the iceberg of ruin: they quickly decamp as fast as they can, taking millions in profits and golden handshakes, while investors and employees alike see their money disappear faster than you can say abracadabra.
Before the tying of loose ends and the rolling end credits, the film concludes with a warning from Watkins that what happened at Enron will happen again. It is a timely warning but unfortunately a warning that those who most need to hear it have ignored (as the Bernie Madoff pyramid scheme debacle and the 2008 collapse of Lehmann Brothers demonstrated) and will ignore again.