I do not understand the world of big business—how huge sums of money are made; how sometimes men of no apparent intellectual distinction gain power over the lives of thousands of people within a profit-making organization. Would I be a critic if I did? Of course not. I’d be a CEO. Therefore, you can ascribe some of my enthrallment with Enron: The Smartest Guys in the Room to one of the wizardly exposé’s greatest pleasures: the way its dynamic dramatic arc frames an area of the world to which most of us will never be privy.
In this case, it’s the tale of how a moderate-size Houston gas-pipeline company grew and grew while gulling the stock market and its investors for a good long time, reaping billions of dollars, and becoming the largest natural-gas supplier in North America and the United Kingdom. In so doing, Enron raised to public prominence executives such as Ken Lay (Enron’s founder and CEO), Jeff Skilling (the company’s COO), and Andy Fastow (its CFO). Working from the 2003 book by Bethany McLean and Peter Elkind, director Alex Gibney (writer-producer of the invaluable Trials of Henry Kissinger) has made the most blessedly traditional sort of documentary. It follows the twisty, complicated rise and fall of Enron in steady, chronological order, from the mid-eighties to the present, using voice-over narration (from actor Peter Coyote, the former San Francisco sixties-era Digger—a tartly ironic choice) to keep clear the cast of real-life characters and the complex lines of deceit. And it presents an undisguised, forthright thesis: that, as Gibney puts it in a studio production note, “Enron is not an exception to the rule; it’s an exaggeration of the way things too often work.”
And what a dire exaggeration of free-market capitalism Enron proves to be. The film reminds us—so clouded are our minds now with everything from the morass in Iraq to the homestretch of American Idol—that the company was responsible for, among other things, gaming the Northern California “rolling blackouts” in 2001, during which, under the guidance of a devious scheme hatched by the brilliant Enron trader Tim Belden, the company profited as huge parts of the state were plunged into darkness. Citizens were threatened by a deregulation plan that essentially enabled a soulless batch of Enron traders to place phone calls that drove up energy-market prices and took advantage of power-plant shutdowns: Gibney plays us the audiotapes of ghoulishly cynical Enronites to prove it.
That’s only the most dramatic of the stories Enron: The Smartest Guys in the Room has to tell. Although Lay and Skilling declined to be interviewed, Gibney manages to make his cold, hard subject cinematic via an artful layering of news clips, interviews with second-tier execs, and footage of chillingly hubristic corporate gatherings shot for company promotion. The film lays out all sorts of devilish practices, such as the accounting system Skilling promulgated, in which Enron would announce a new project, from a pipeline expansion to increasing broadband capacity, and project the millions of dollars in potential profits onto earnings reports, as though the above-the-line dough was in the bag. Much of the time, of course, it wasn’t. This game was played with ferocious aggressiveness, gambling that revenue would pour in before actual, lower profits needed to be disclosed.
More pathetic are the clips secured by the filmmakers of warm company pep rallies at which high-ranking Enron officials including Ken Lay—close enough to President Bush to have been granted a Dubya-generated nickname, “Kenny Boy”—perform skits encouraging cheering employees to invest all their money in the company’s 401(k) plan, whose funds would, of course, evaporate after the stock collapsed and the plunderers were indicted. (CFO Fastow, for example—dubbed “the Sorcerer’s Apprentice”—was slapped with 78 charges including conspiracy, fraud, and money laundering.) Were these, in fact, “the smartest guys in the room”? No: They were the most arrogant, ballsy, unfeeling, power-hungry guys in the company. Fortunately, their power-lust ignited and consumed them until they were burned by their own greed, and left charcoal-suited empty shells in handcuffs—with smudgy-front-page-news smirks that implied overseas bank accounts. Unfortunately, by that time they had already wrecked the lives of many innocent, loyal people: the poorest guys and gals in the room.