Enron: The Smartest Guys in the Room

By now, the Enron scandal is old news. Sure the trial of ex CEO Jeffrey Skilling continues to meander on – latest news I heard of the trial was a fuss about him selling 500,000 Enron shares just after the 9/11 terrorist attack, along with sundry charges being dropped – but you know that he and company founder and chair Kenneth Lay have set aside a huge amount of money for their defence, courtesy of the good folk who invested in their company, and chances are they will not do any time proportionate to the crime that was Enron.

In a way the wash up is typical of all the bubbles and busts that have been going on since the South Sea islands attracted the attention of the English market in the eighteenth century. What’s always interesting is how the lemmings rush in, and then rush off the cliff, losing everything in the process. What makes the dream of untold wealth such a buzz? Well Enron: The Smartest Guys in the Room doesn’t ask all the deep philosophical questions, nor does it spend too long brooding over the technicalities of the Enron bust. Instead this Academy Award nominated documentary spends a lot of time with the main characters – Skilling and Lay – as well as using interviews from key bystanders, who knew the pair intimately, as well as throwing in a lot of material shot at the time Enron was building up to fission implosiveness.

The result is a chilling portrait of a company out of control, with connections at the highest levels, and with a capacity to trade in electricity in a way that brought California to its knees (though the way rich Californians churn through electricity like it was free running water means they should take some share of the credit for the crisis). Along the way, director Alex Gibney and his team find time to include some colourful anecdotes – like the story of Lou Pai, who left Enron with a bucket load of money after selling his stock so he could divorce his wife and shack up with his pregnant stripper girlfriend. It seems Lou had a thing for strippers – guess he could afford a nice stainless steel pole in the bedroom of his fortress-like dreamland after he did his bunk.

Skilling emerges from his dissection in the show is someone whom you wouldn’t trust with your twenty cents of lolly money, let alone a dollar for an ice cream. The business of the company turned into a game of boosting the share price, with the business model getting into the surreal by the time Skilling determined that if he had a good idea, the company should book the future profits to the bottom line. While the show doesn’t go into the details of the bottomless pit that became the futurist broadband business, it does take time out to share a chuckle about the Enron idea of selling futures in the weather. Not to mention building a power plant in India without realising the population couldn’t afford to pay for the power in a way that would generate a profit.

The show – which proceeds along a fairly traditional path covering Enron’s decline and fall – is slickly put together, and maintains a straight face throughout, while evoking a deeply black sense of a giant, cruel, cosmic joke unfolding before your eyes – as when the traders in the Enron bunker chortle and laugh about ripping off grannies, and gloating with glee as they help California to burn, baby, burn (amazingly these geckos managed to get their words onto tape, so they could be reproduced in the show).

It’s a relief not to have Michael Moore pummelling away in outrage at the outrages committed by Enron. Instead the laid back, cool, just ‘the outline of the facts and let’s watch the footage' approach means you can sit back and watch a kind of corporate Dr. Strangelove scenario unfold before your eyes. Of course at the end the rats abandoned the ship with as much as they could carry (there’s some evocative footage of the empty Enron premises) while the hapless mice – shareholders, consumers, employees who sunk their pension money into the shell game – get burned and lose the lot. Poor old Grey Davis looks like a rabbit in the headlights. Wass that you say, wass that, this is what de-regulation means? Hasta la vista baby, and funnily enough it means the good ol’ Californians upped and voted in a Republican when the Republicans were directly responsible for the regulatory (or non regulatory) framework that encouraged the mess. You are free in a free marketplace to screw who you like, any way you like, and deposit the results in Switzerland. Yea baby, let’s do it some more.

That’s the way it’s always been in this kind of situation, and that’s the way it will be in the future when the ‘greed is good’ approach is allowed to run helter skelter through an economy. In a way, it’s amazing the game ran for so long, and also how little it took – a Fortune reporter who dared to ask why the emperor wore no clothes – to bring down the company with a short, sharp thud. Enron went from a multi billion dollar company to bankrupt in a month – burn baby burn. Gibney and his team keep the mood generally light and easy as the corporate debacle proceeds, fleshing out the fun by using a Simpson joke about Enron here, and by quoting plenty of music there (including a nicely evocative Tom Waits track). By concentrating on the main players, some of the richness of the material gets dropped along the way – the Arthur Anderson calamity is really only mentioned as a side result. But if you want to know all the lurid details, you’re better off with any of a number of books that cover all the side shows and the financial details.

What this documentary does well is evoke the key players and their completely amoral lack of any kind of business ethics, backed by a perverse pride that made them think they were going to be the centre of the universe. Well anything from Texas is big, so it’s good to see Huston the home to this giant corporate collapse.

Will anyone learn anything from the debacle? Maybe if you take time out from the goggle box to watch the show you’ll learn something about the corporate world, and the wolves fleecing the sheep, and maybe you’ll even try not to be a sheep. Feel out that fine Wolf clothing instead and see if it fits. You might even be better placed than the sheep watching American Idol. But one way or another some one out there is conspiring to find a way to get you to give them all your money. It’s called being an entrepreneur. Welcome to the world of big business. Hold up a store for drug money and you’ll get ten years and counting. Hold up millions for billions, make sure your collar is ironed and white, and you’ve put enough away for the lawyers, and you’ll maybe get a slap on the wrist. The rich look after their own. Meantime, to avoid depression, take a dose of Enron: The Smartest Guys in the Room. It’s not a cure, but it’s a tonic.

 

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