Before seeing "Enron: The Smartest Guys in the Room," I'd read enough about the Enron scandals to know I'd never want to be seated at the same table as Ken Lay. Still, watching Alex Gibney's riveting documentary made my jaw drop and my hackles rise. If a novelist--Tom Wolfe, say--had made up this tale of greed, vanity, corruption and corporate machismo run amok, critics would have questioned its plausibility. Fiction, as Philip Roth pointed out many years ago, can't compete with the outrageousness of reality. And the Enron story, as writer/director Gibney tells it (based on the book of the same name by Fortune reporters Bethany McLean and Peter Elkind), calls into question not just a handful of rogue corporate outlaws but an entire business ethos. The movie makes clear that a deception this vast couldn't have succeeded if it weren't in everybody's interest--from Main Street to Wall Street to Washington--to look the other way.
The crucial ruling that opened the door to Enron's smoke-and-mirrors approach to business occurred in January of 1992, when the SEC approved Enron's request for "mark-to-market" accounting. This was a concept new to this film critic, who never realized that big business could be conducted by rules more suitable to Alice's Wonderland. Mark-to-market accounting allowed Enron to add potential future profits into their bookkeeping ledgers. With this weapon in their always-secretive hands, the Masters of the Universe could, with a flick of the pen, invent vast profits where none existed. And the big banks were all too happy to take their word on faith, no hard questions asked, as long as the stock kept soaring. If the accounting firm of Arthur Anderson (which was destroyed in the scandal) knew better, they weren't telling. (The first thing they did when the heat came down was shred a ton of paper evidence). Enron's ad slogan was "Ask Why." It should have been "Don't Ask, Don't Tell."
Gibney's film is particularly good at showing us the particular corporate culture that Enron encouraged--a swaggering, Texas-style machismo that reveled in its survival-of-the-fittest ruthlessness. Fifteen percent of all employees were terminated every year in their harsh-medicine purges of the weak. The managers liked to take daredevil motorcycling trips into Mexico, testing their limits. Setting the tone was the self-invented Jeffrey Skilling, who transformed himself from nerd to slick, risk-taking buccaneer. Gibney was able to get his hands on Enron audiotapes that allow us to listen in on the chatter of the traders during the California energy crisis, as they "suggest" that perhaps this or that power plant be shut down, conveniently driving oil prices higher. It's bad enough that they gamed the system for their own profits; what's particularly chilling is their gleeful mocking of "poor granny" deprived of such trivial things as light and heat. One of the Enron bibles was a book called "The Selfish Gene." In their minds, it was practically their duty to take advantage of whatever loopholes had been created by California's deregulation of the power industry. And they knew--as friends and generous contributors to the Bush administration, which preached the sermon of deregulation--that the Feds would let them get away with it as long as they adhered to the outer limits of legality.
Gibney's documentary has a bouncy, muckraking spirit: the soundtrack is embellished with the funny, heavily ironic use of music: "Love for Sale," "Dear Mr. Fantasy"... you get the drift. I wish he hadn't, at the start of the film, staged an impressionistic recreation of the suicide of Enron exec Cliff Baxter, or had sinister whispering voices on the soundtrack under the credits--cheesy fictional techniques that he doesn't use in the rest of his well-documented account. Gibney was unable to get Skilling or Lay to speak to him directly, but there's plenty of footage of Skilling testifying (denying his knowledge of every illegal tactic, naturally) and of Skilling and Lay reassuring the workers whose lives were about to be destroyed that all was well, even as they were selling off hundreds of millions of dollars of their own stock in the company.
"Enron: The Smartest Guys in the Room"--which opens in New York and Houston on April 22 and Los Angeles on the 29th before gradually expanding--has played at the Sundance and South by Southwest festivals, where audiences jeered and shouted at the screen in outrage. It has that kind of impact, without resorting to any of Michael Moore's below-the-belt tactics. What also comes through is the tragic cost of the Enron debacle: the 20,000 lost jobs (and 25,000 more when Arthur Anderson toppled), the countless employees who saw their life savings go down the drain. Over and over in interviews people invoke the metaphor of the Titanic, except here the captains don't go down with the ship: initially at least, they walk off with piles of ill gotten gains. Some men have been convicted and sentenced, but the fate of Lay and Skilling awaits a sequel. Let's hope it's called "Enron: The Smartest Guys Behind Bars."