Enron: The Smartest Guys in the Room Review
by Harvey S. Karten (harveycritic AT cs DOT com)April 25th, 2005
ENRON: The Smartest Guys in the Room
Reviewed by Harvey S. Karten
Magnolia Pictures
Grade: B+
Directed by: Alex Gibney
Written by:Alex Gibney, book "The Smartest Guys in the Room" by Bethany McLean, Peter Elkind
Screened at: Park Ave., NYC, 3/15/05
See this film and you're likely to add quite a few hits to websites like scholar Louis Proyect's http://marxmail.org. "Enron: The Smartest Guys in the Room," is a doc based on the best-selling non-fiction book, "The Smartest Guys in the Room," by Bethany McLean, who appears in the film, and by Peter Elkind. What transpires therein is so jaw-dropping with villains so audacious that you've got to wonder whether this is something Hollywood made up as a psychological thriller, or even a horror story.
You don't necessarily have to be a leftist to be disgusted with the way the top executives of Enron, the seventh largest corporation in the U.S., acted. Its bankruptcy was brought about by a flagrant cooking of the books, e.g. by claiming as profit what was merely expected or, more accurately hoped for. This got its stock price soaring. The bubble, which brought the price down from its high of $90 per share to a buck twenty wiped out the life's savings of thousands of Enron workers who were encouraged to put all their 401(k) income exclusively into Enron–something that no reputable executive of any company could or should recommend.
According to Gibney's script, narrated nicely by Peter Coyote, the principal cause of the disastrous down-slide of the stock price is that the honchos–namely the CEO, the president, and the Chief Financial Officer–cashed in their holdings, making off with about a billion dollar in cash. The thousands of workers with savings in the 401(k) had their accounts frozen to prevent them from getting out while they could still save their
retirements.
Somehow Alex Gibney was able to dig up a boatload of videos that could conceivably be used to convict the indicted leaders whose trials are coming up this year. These, together a striking sound track of original music by Matt Hauser, even a Simpsons cartoon that shows the family heading up in a roller coaster shouting "we're gonna be rich," then plummeting down swiftly into "the poorhouse" make "Enron: The Smartest Guy in the Room" no mere talking-heads documentary. On the contrary, this is an entertaining picture throughout with humorous moments balancing a story about the sort of scandal that can arise when government stays out of the regulation business and allows private corporations to manipulate prices.
Among the extras judicially added to the doc to both increase its entertainment value and add painlessly to our knowledge is a black-and-white tape of the famous Milgram experiment of the early sixties. A mock scientist, clad in a white coat, tells a participant to give a man seated several feet away (in reality an actor) increasing jolts of electricity whenever he answers a question incorrectly. When the participant objects, the scientist urges him to continue. (In reality, no electricity is passed through the corridor, the actor merely feigning pain with increasing yelps.) Fifty percent of participants ignored the cries of the seated man and obeyed the scientist. The moral: If a person in authority tells you to do something that you find loathsome, there's a fifty-fifty chance that you'll go ahead and listen to the authority figure. This explains why so many thousands of Enron employees dutifully put their entire life's savings into company stock.
Enron was formed in 1985 when Houston Natural Gas merged with InterNorth, a natural gas company based in Omaha. Enron became the proud owners of 37,500 miles pipe. Two years later, Enron discovers that oil traders in Valhalla, New York, have been diverting company funds to their personal accounts. Five years later, Jeff Skilling, who gets a considerable amount of movie time, joins Enron and becomes its chief operating officer, leading the company to build a power plant in India for $2,8 billion. The plant is a flop, the infrastructure now a wasteland. Notwithstanding the debacle, Jeffrey Skilling–who at one point sheds his nerdy appearance by getting Lasik eye surgery and plunging into extreme sports–is made chief executive while one Ken Lay remains as chairman. When Enron moves into the broadband business, it declares $53 million in earnings though not a cent was made in profits.
Enron could not have indulged in its cook-the-books scheme without the help of outsiders, notably from the allegedly reputable accounting firm, Arthur Anderson which found nothing particularly wrong in auditing the Enron books.
Cooking the books and making huge profits for executives who bailed out while the stock price was still high was not all. Somehow Enron was so devious that it appears able to do nothing ethically correct. In California, the company convinced the Republican governor in power before the hapless Gray Davis to deregulate the electricity industry in that state. The Enron traders, joking about the citizens about to be shafted, ordered the power turned off every other day in order to justify a huge increase in the price of electricity while claiming that there was an unfortunate shortage. President Bush does nothing, stating his typical mantra, "Trust in the force, the magic of the marketplace."
Director Alex Gibney believes that "the relationship of big business and politics will be intimate as long as politicians need increasingly large sums of money to run for office." He answers those who believe that the market will ultimately correct all imbalances and that supply and demand will moderate prices is thus: "The world of investment banking and big business is a world unto itself in which a few powerful people wheel and deal out of the public idea....Enron and other energy companies all got together to game the California market."
While the audience at a critics' screening was polite, presumably awed by the doc, we hear that "Enron" sold out the theater at the Southwest Film Festival, got a standing ovation and a catcall of boos, hisses and disgust, the audience yelling and cursing at the screen after learning how a privileged few bankrupted the country's seventh largest corporation. The doc was offered at the 2005 Sundance Film Festival as well. "Enron: The Smartest Guys in the Room," mimics the over-the- top gestures of Michael Moore in his "Fahrenheit 9/11" only at times, when it offers up the excerpt from a Simpson's cartoon and hones in literally on a gambling casino when discussing the ways that the company played with the stockholders' money.
Not Rated. 110 minutes © 2005 by Harvey Karten
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