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"Enron: The Smartest Guys In The Room"
A review by Gary Chew

Webmaster (Mike Ransom): This movie was based on the book The Smartest Guys In The Room, by Bethany McLean and Peter Elkind. Mr Elkind appeared in person at the Circle Cinema here in Tulsa on 5/9/2005 to introduce a screening and meet with filmgoers. He appears throughout the film.

I attended the event. The crowd more than filled the new Circle 2 Theatre.

One audience question concerned "mark to market" accounting, which counts expected future profits as current earnings. When Enron first asked the SEC for permission to use this method, they were turned down. However, the second time, the SEC relented.

I asked Mr. Elkind if political pressure had somehow been brought to bear. He said, no, Enron staged a full-court press at the second SEC hearing, led by their high-powered CEO, Jeffrey Skilling.

Once "mark to market" was approved for Enron in 1992, the stage was set for a fraud of mind-boggling scale...

GARY CHEW/Sacramento

This review should be read in tandem with my other comments about the newly released film, “Crash(just reviewed by Chew on this site).

I’m not suggesting a play on words with the title “Crash” and what happened to Enron Corporation, but rather how very different two good films can be and for what effect each is made.

Many films today are taking shape due to lack of real investigative documentary reporting on television. The subjects are too hot for commercial TV and, in some instances, even for noncommercial television. I’ll make the long list short: “Fahrenheit 9/11(also reviewed by Chew on this site), “The Corporation,” etc.

For the most part, they’re very satisfying for one audience while inflaming another. It’s not unlike what’s been going on with AM talk radio over the past twenty years or so, and more recently on some cable news channels.

People of a more reactionary persuasion have made those who are less reactionary more so. Michael Moore and Air America Radio are two items which quickly come to mind.

It’s certainly not been a time for healing, and with this latest documentary, “Enron: The Smartest Guys In The Room,” there’s another divisive film playing at the mall. This one, however, is not as inflammatory as Moore’s controversial movie, and it’s much less a specifically political film in terms of left and right, but more so one about right and wrong and why so many professional people in high, accredited places didn’t ask “why” enough about the glowing numbers Enron fed its employees and the financial world.

Andrew Fastow Ken Lay Jeffrey Skilling

Andrew Fastow

Ken Lay

Jeffrey Skilling

Ken Lay and Jeffrey Skilling are the main attraction in the film. And we’re blessed with Alex Gibney (who directed) not having inserted himself into it asking hard questions of the principals in this business debacle. There’s nobody named Roger in this one.

Some time is given over to Andrew Fastow, Enron’s Chief Financial Officer, who is now serving a prison sentence. Lay and Skilling’s trials are scheduled for January 2006, at which time, Gibney’s camera crew will be rolling again for a sequel. This according to Gibney himself during a question and answer session following the film’s screening in Sacramento in late April.

Enron updates

Andrew Fastow pleaded guilty to two counts of wire and securities fraud in January 2005, and agreed to cooperate with authorities. He is serving a ten-year prison term without parole. His wife, Lea, is now serving a one-year term for filing a false tax return.

1/27/2006 update: Lay and Skilling face charges of conspiracy and fraud. Jury selection is scheduled to begin 1/30 in Houston.

5/25/2006 update from Yahoo News: Lay was convicted of all six counts of conspiracy and fraud and faces a maximum of 45 years in prison. Skilling was found guilty of 19 counts of conspiracy, fraud, insider trading and making false statements which, combined, carry a maximum sentence of 185 years. He was not convicted of nine criminal counts.

10/24/2006 update from Yahoo News: "At Monday's court hearing in which he received a 24-year prison sentence, former Enron CEO Jeffrey Skilling remained defiant. 'I am innocent of these charges,' he told U.S. District Judge Sim Lake. 'I'm innocent of every one of these charges.' This is something of a pattern in the Enron case. Skilling's predecessor and successor as CEO, Ken Lay, expressed similar sentiments after his conviction in May. He later died of a heart attack."

10/24/2006: (from Boing Boing) The free online "Enron Explorer" gives you access to the body of 200,000 Enron emails released during the fraud investigation.

The most compelling parts of “Enron” come in two instances.

One is an employee of an Oregon public utility, owned by Enron, lamenting his $350,000 retirement nest egg being diminished to a mere $1,200. And the other, of course, the power crisis here in California, much of it due to the commodities futures gaming lead by Enron after electricity was de-regulated by the California Assembly during the administration of Governor Pete Wilson. The former governor is now a chief advisor to Governor Arnold Schwarzenegger.

Gibney has used some recorded phone conversations of Enron employees as they gleefully react to the bind in which Californians are placed by the power black outs and brown outs. Moreover, with coverage that was cabled by C-SPAN, Gibney is able to place important parts of Enron congressional hearings into his film.

Director Alex Gibney
Director Alex Gibney also was series producer of "The Blues"

Another interesting feature of “Enron” is the occasional flashing or “crawling,” at propitious moments, of Enron stock prices. They’re seen at the bottom of the screen, much like the cable news channels now do.

The film, “Crash” is for healing. “Enron: The Smartest Guys In The Room” is for revealing. And in doing so, it should remind us, again, that capitalism is the best way to do business just like liberal democracy is best way to govern and that, by far, employing honesty in both is the best policy for all.

I’d recommend seeing the Enron film first, then check out “Crash”.

You’ll sleep better.

Gary Chew spoke about "Enron: The Smartest Guys In The Room" on KXJZ-Sacramento's program, "Insight", on 5/5/2005. The show can be heard at the Insight archive for the next month. Director Gibney was also interviewed.

"Enron: The Smartest Guys In The Room" on DVD.

"Enron: The Smartest Guys In The Room" official site.

Gary Chew can be reached via email at garychew@comcast.net.

Copyright © 2005, Gary Chew. All rights reserved.

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