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One powerful theme in "The Smartest Guys in the Room" is expressly
articulated and repeated for emphasis: this is the story of people, not
arcane financial accounting methods or numbers, and because it is
people, it can happen again. Enron is just the manifestation of the
evil begotten by hubris, in spectacularly public fashion. It is classic
Greek tragedy, and it is one from which its chief protagonists, Ken Lay
and Jeff Skilling, must not escape.
Yes, it is a movie with a point of view, but this is not a Michael Moore documentary. Director Alex Gibney brilliantly tells the story simply by interviewing people who were participants in the events, showing the time lines of those events, and interweaving an astonishing amount of video and audio footage taped at Enron, by Enron itself. The movie resolved for me the question: "What did they know, and when did they know it?" They knew. They not only knew; they designed the company to be the ultimate shell game, with no pea. The only thing Enron ever had to sell was its stock price. And they did know that was their only product.
As a Houstonian, I admit that I, a supposedly sophisticated business professional, was intimidated by Enron's assertion in its glory days that the reason I didn't understand its business was just that I wasn't smart enough. My friends, managers and lawyers, some from Harvard thenselves, also admit to the same intimidation. It was not that the questions were not being asked; it was just that we were silenced when Enron avowed that they were the smartest guys in the room. They asserted it, and we believed them. Thank good Fortune that one reporter, Bethany McLean, in almost too soft a voice to be credible as a giant killer, kept asking.
I wish this movie might inspire a larger remedy than the one being attempted by the Department of Justice. Why doesn't Harvard deny admission to people like Jeff Skilling, who, when questioned in his entrance interview whether he was smart, replied, "I'm (expletive deleted) smart"? Why isn't some humility and modesty still ranked a virtue? Why do we celebrate the rise of the specialist educated only in his field, and wholly ignorant of the inevitability of the fall of the Greek protagonist who becomes blinded by arrogance, power, greed---- in short, hubris? Why is ethics a specialty study, instead of integral to every field of study? I sat open-mouthed as the tape showed Jeff Skilling seriously selling a new business idea: selling futures in the weather. He parodied himself on tape: he had a new, better idea than the "mark to market" booking which allowed Enron to book future theoretical profits once they had signed a deal; now he would institute "hypothetical to book", booking profits as soon as he had an idea. What, ultimately, was the difference between the parody and the reality? The horror of listening to traders, who sat in a room directly below Ken Lay and Jeff Skilling, with staircases between their executive offices and the trading floor, laughing at the misery they were inflicting on California as they extorted profits from that misery, leaves me outraged long after the movie is over. They threatened and may have cost lives with their fraudulent tactics. They admit it on tape, laughing. They knew. It was their business plan. To make Andrew Fastow the scapegoat for what Enron was developing as its business plan before he was ever hired is simply the continuation of the shell game with no pea. Look for the "designated fall guy". They still think they are the smartest guys in the room.
No, I'll never be selected for the jury pool now, but I wouldn't have been anyway. I'll buy the DVD and watch it a few times during the trials and seethe, lest I forget. Excellent movie, the best kind of documentary.
*** This review may contain spoilers ***
Though this movie certainly has some amusing points, it's far from a
wacky thrill ride where we are finally able to laugh at the hijinks of
a group of people who defrauded tens of thousands of people out of
their jobs and their livelihoods. On the contrary, watching people like
Lay, Skilling and Fastow defend themselves, their motives and the end
result of their mutual greed is at times a sickening display of what
people can do when allowed.
Gibney's film is as light-hearted as it can possibly be while still maintaining the integrity needed to realize that the story is no laughing matter. Quite simply, it is a tale of what happens when the bullies take over the playground with their eyes on taking over the school. On a larger note, it points the finger not only at the headline-making executives whom we have all come to know, but at every single other person who willingly allowed it to happen. From the employees and the traders who sacrificed others in order to save themselves, to the banks and the politicians who turned a blind eye in the name of profit, the movie forces us to ask ourselves where culpability and accountability meet.
Is everyone to blame if no one intervened? Interestingly, in a movie filled to the brim with gluttony and arrogance, there's a shimmering hope in the faces of the few people who helped in bringing the scandal to light: Bethany McLean, co-author of the book upon which the movie was based gives a precise and fantastic interview; Sherron Watkins, Enron Vice President (and whistle-blower) repeatedly tries to steer the company in the right direction to no avail; and the one trader who stood up to the company when it's numbers clearly didn't jive, losing his job in the process. Seeing a small handful of people make such a large difference is the tiny bit of inspiration gained from this film, though it really only begs the question of why so few people stood up in a building jam-packed with people who had everything to lose.
"Enron: The Smartest Guys in the Room" is an excellent introduction for
the general public to the scandal for someone who didn't hear
first-hand the warnings about the New Economy that sneered at the
responsibilities of a public company or read the articles in Fortune,
Wall Street Journal, NY Times, or Business Week while it was all
building up, then come tumbling down.
While the film leaves out some of the technicalities, it does an entertaining job of combining talking heads, lively graphics, news clips, incendiary dramatizations (such as of busy, noisy shredders), company documents and whistleblower-obtained stunningly damning audiotapes, web broadcasts and video tapes to document how a major company could grow out of smoke and mirrors to become the largest bankruptcy of its time, bringing down countless victims with it.
Establishing an arresting time line that serves like a ticking clock, the film is excellent at visually demonstrating how other corporations, particularly lenders and brokerages, profited from not revealing the truth.
The filmmakers particularly gleefully accent the company's political connections, going beyond the popular "Kenny Boy" friendship of CEO Ken Lay with George W. to extend to the Bush clan and inner circle, including the Federal Reserve's Greenspan, to hone in on how it fomented self-serving deregulatory policies, with a special emphasis on California and its frighteningly manipulated energy, and resulting political, crisis.
The filmmakers do make some of the talking heads seem objective when they actually have their own profitable axes to grind, such as shareholder attorney William Lerarch, and let the Johnny-come-lately legislators look a little too good as they puff up at the Congressional hearings.
A bit too much is made of the executives as former nerds, as these guys weren't computer geeks; rather there were class issues at work that are hinted at in the brief biographies in the culture of traders who were entrepreneurally lifting their incomes by gambling. At the same time, whistleblower Sherron Watkins's actions and motivations are not emphasized as particularly heroic in going against the company's macho culture (the many Deep Throats cited in the credits as anonymous sources are amusing).
A delightful range of popular music is also used to emphasize points, from Tom Waits to "God Bless the Child," as well as popular culture references from "The Simpsons" to "Gordon Gekko"'s defining quote also keep the film from just being like a dry episode of PBS's "Frontline". I presume the title itself is meant to recall the classic laying bare of the men who got the U.S. mired in the Viet Nam War, Halberstam's "The Best and The Brightest." The film does slight the clear-eyed folks who were warning about the declining ethics in the accounting profession and the lack of fundamentals in the bubble investments as Enron and its ilk were on the way up -- and who were vilified in the business community for their Cassandra pronouncements.
The film does make the Enron situation seem too unique. While personalizing the stories around the head people at the company --especially as they transformed from geeks to power brokers --makes the story easier to follow in a movie, it makes this corporate culture unusual. It also lets off the management consultants, let alone the business schools' emphasis on stock price analysis, who were cheerleaders for these techniques; McKinsey and Harvard spawned at least one of the colorful figures profiled here.
This kind of egotistical "I'm top of the world, Ma" attitude in business was also typical of the Rigas at Adelphia in Pennsylvania, Ebbers at WorldCom in Mississippi, and Scrushy at HealthSouth in Birmingham, Alabama, and the just dethroned Greenberg at AIG scandal in the heart of Wall Street, shows that enough chutzpah and money can deflect anyone, anywhere, using the same techniques -- a ruthless, macho corporate culture that forces out anyone who disagrees, browbeating regulators, hiding secret accounts and spreading around manipulative corporate philanthropy.
At a NY Financial Writers' Association panel as the Enron story was breaking, they did an introspection that unfortunately is not provided by the film, on why they didn't report earlier that the emperor had no clothes (as one of the sub-chapters in the film puts it). The consensus was that the journalists realized they mistrusted the motives of the warners more than they doubted the motives of the corporate executives who were issuing the bravado reports and deflecting timid questions, even though the journalists too late realized that the executives had way more to gain than the Chicken Littles and they were intimidated by their own lack of accounting expertise to recognize the sliding slope of accounting ethics (though the film does very briefly touch on how the CPAs early on accommodated the bubble by too easily officially approving the now notorious "mark to marketing" accounting procedure that permitted the booking of goods not yet obtained, though there's no mention of casually lax acceptance of external auditing firms to simultaneously do internal auditing and profitable consulting).
McLean, a co-writer of the film whose book is the premise for most of the film, did supplement the film in an interview on Charlie Rose that should be included on the DVD by naming the "shorter" (an investor who gains if prices go down) who first had tipped her off, though she didn't there mention the local Houston business reporter she cited at the panel who was the very first one to report suspicion of Enron's numbers. She also clarified on the show that while her article in Business Week is now seen as the beginning of Enron's end, her actual findings were very mildly stated, particularly compared to the full truth as it came out, and only aroused suspicions by the ferocity of the company's denials.
Even as the film concludes with an it could happen again warning, with no analysis if Sarbanes-Oxley will help, it places too much emphasis on the uniqueness of Enron.
I caught this documentary by chance on HDNET. I was VERY surprised and riveted for the two hours. Finance is my life. I am astounded at the massive amount of apparent complicity on parade with this story. The tremendous greed and bold face lies demonstrated as the story took its turns are the makings of the best thriller novels (sadly, this brings new meaning to "Reality TV"). I've been thinking about this since Friday: these are some of our best and brightest - what ever happened to their ethics, their honesty? It appears that too many were compromised get get their piece of the action. Big Action!~ I have the feeling this is only the tip of the iceberg at Enron - however, the movie is a tremendous collection of some VERY interesting events. Hats off to Bethany, Peter and Alex for a great movie.
"Enron: The Smartest Guys in the Room" directed by Alex Gibney takes a
moment to explain in vivid detail about the rise and the fall of that
giant of giants, Enron. Based on the book by Bethany McLean and Peter
Elkin, this documentary holds the viewer glued to the seat because one
cannot believe, for a moment, what one is watching on the screen.
The great debacle of the beginning of the century was the Enron downfall. At the same time, it is a cautionary tale for a lot of people about the way some unscrupulous manipulators can wreck havoc in the lives of the people that give their lives working for a any corporation. The Enron workers paid the ultimate price because a few people at the top had an unstoppable greed.
Mr. Gibney is smart in presenting the facts without taking sides. The director is not making a moral judgment at all, he is just letting us absorb how Enron operated and how it was able to pull the wool over everyone's eyes in believing this was the greatest company in the world.
Not only did Enron go down, but it took the Arthur Anderson accounting firm as well. There are thousands of people that are victims of this reckless disregard for the people under these scheming executives, who thought of nothing, but themselves. It's ironic that Jeff Skilling is paying more than twenty million dollars for his own defense, and who knows how much more will Kenneth Lay and Andy Fastow pay to star lawyers in their legal processes.
Ultimately, the real winner seems to be the oriental executive, whose name I don't recall, with an appetite for strippers who ended up being the biggest landowner in Colorado and now is living happily ever after in Hawaii. Compare that picture with the people the Enron workers who lost it all and must now make ends meet with little.
The Enron tragedy should be taught at Harvard as Greed 101, or how to get away with murder in America.
I just saw this movie at Talk Cinema in Philadelphia. It was an
excellent depiction of hubris and greed. The clips of Ken Lay et all
were self serving and only seemed to intensify their greed. I would
have liked more exploration in to the ties with the Bush Dynasty but
that said it was an interesting intense film. Definitely one that I
would be happy to recommend. There is one critique I would make is that
although the film touched on the many lives that were ruined by the
Enron Scandle,it did not give them a real human face.
In the eighties we called people like the Enron Executives "Masters of the Universe." Now we can call at as we see it, Over grown former nerds with no morality and no conscience.
This film is a profoundly entertaining chronicle of American corporate
power run amok. Profound because as it dramatizes the rise and fall of
Enron, the film casts a longer shadow over the still largely unchanged
corporate environment that spawned this smoke and mirrors company.
Entertaining due to clever use of storytelling devices, imagery and
soundtrack, despite what looks to be a low budget.
The film's strength is in its portrait of the massive "group think" inside and outside of the corporation that supported Enron's rise. It is astounding and chilling to look back on the cheer leading role played by banks, financial media, accounting firms and government. And though Enron, the film, may be weak on explaining how the company built itself up from a simple gas pipeline business to a post-modern corporate megalith, it was probably a wise choice to leave detailed descriptions of the financial manipulations to the book of the same name. The film, does though, miss an opportunity early on to provide a basic explanation of the central paradox of Enron -- earning heaps of money by exploiting commodities trading and accounting methods, while losing heaps of money in real world ventures. Enron set up its first commodities trading desk to capitalize on inside knowledge of the gas business, and then tried to replicate this model with water, broadband, electricity, etc. In actually a trading firm, Enron evaded investment firm regulations by portraying itself as an industrial firm.
Yet, despite some shortcomings, the storytelling is powerful, especially the eye-opening dramatization of Enron's role and the political manipulations behind the California energy-crisis. After viewing the suffering of average Californians, juxtaposed against the callousness of Enron's West Coast energy traders, it felt good to see Kenneth Lay walking in handcuffs.
More than once, the phrase, "this can happen again," echos in the film. It has happened before -- leveraged buyouts, the Savings and Loan crisis, the burst Internet IPO bubble, the 1920s Stock Market crash. A new financial vehicle generates untold riches for some, goes bust, and millions, sometimes billions ... disappear. Enron, the film, is the textbook on how one corporation recently stole from investors, employees and its "customers."
Ask why do we keep on letting this happen.
The documentary "The Smartest Guys in the Room" is based on the excellent book by Bethany McClean and Peter Elkind. If you work for an American corporation, have ever owned stock in a corporation, or have mutual funds, you must see this movie. It gives a clear eyed view of what can happen in our society when greed really is considered good. The movie accomplishes what few in this genre have done: It is informative and also entertaining. Some of this is due to the behavior of Enron executives. For example, one frequented strip clubs every night and made his staff come along. Naturally that requires video of strippers. Some of the most damning video is from Enron execs themselves. They never dreamt they would be caught. Hubris gone wild. Go see this movie. Take friends with you. You will be glad you did. First rate film all around.
"Ask why" was the mantra of one of the most remarkable companies in the
history of modern society: Enron. And not one, not even the venerable
accounting firm of Arthur Anderson, asked that question. So the little
energy company that could amassed billions of dollars through deceptive
accounting practices, mainly by stating profit based on future earnings
(HFV=hypothetical future value) and shipping losses to offshore shell
Alex Gibney's absorbing documentary, based on the book co-authored by the first prominent whistle blower and Enron executive, Bethany McLean, begins with the tragic concept of the pervasive fatal flaw, hubris, and applies it meticulously to the tragic figures Ken Lay, Andrew Skilling, and Andrew Fastow. Tragic in the sense that those talented executives allowed the company to fall while they lined their pockets with the assets of its 20, 000 employees, countless investors, and the state of California, which suffered mammoth losses due to its new energy deregulation and manipulation of that energy by Enron.
The documentary succeeds in explaining the crimes while lacing the story with just enough drama to make suspenseful the outcome we all know before we view the film: Fastow is doing time, Lay and Skilling await trial, former employees work past their retirement ages because their pensions have been gobbled up by the crimes, and California now regulates its energy but still suffers from massive deficit.
The documentary fails when it manipulates its audience with background songs that dramatize the obvious ironies, e.g.' "Son of a Preacher Man" plays during Lay's biography. Such skewering is almost impossible to avoid once a documentarian picks up a camera and selects the images; what he doesn't have to do is underscore the ironyThe players will do it all on their own. It also seems to hold back on the cozy relationship between Lay and the Bush family. Perhaps another time.
Meanwhile, this documentary is compelling viewing of a tragedy about a company, as one of the talking heads describes, that was "a house of cards . . . built over a pool of gasoline." It is enjoyable to see it figuratively torched like the House of Wax.
Yes, it is about numbers. I know that is hard for some to take. In
fact, I know that some people don't want to hear about intricate
financial details. That is very evident by the voting patterns here in
America. But, Enron: The Smartest Guys in the Room is more about
people. The characters that led Enron to its downfall are really
interesting and come across in a way that, if you weren't watching them
in a documentary, you would want to watch a movie about them.
The unholy trinity of Ken Lay, Jeff Skilling and Andy Fastow managed to manipulate the numbers, manipulate the stock analysts, manipulate the press, and manipulate the financial institutions to a point that is just beyond belief. The corporate motto was "Ask why." A whole lot of people outside the corporation failed to ask why, or crumbled like the White House press corps when they were getting smoke blown up their skirts.
Two things really stand out in this film besides the three people mentioned. The employees of Enron themselves for the most part didn't see the crumbling of the company because they just didn't want to add things up.
Also, this movie is rated "R" for some brief nudity and for the language of the traders handling the California energy mess. When you hear those traders who took down the California energy grid, you would agree that this film should have been rated XXX. It was just plain obscene to listen to the greed and callousness of these traders.
The bottom line is that every voter who goes to the polls in 2006 without seeing this film first is just plain irresponsible. But that is just my opinion.
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