Enron : The Smartest Guys in the Room
Speelfilm

Actor/Actress	Character
Ken Lay
Jeff Skilling
Ben Glisan
Andy Fastow
Sherron Watkins
Lou Pai
Lea Fastow
Directed by	Ales Gibney
Rated Not-Rated
109 minutes

Forget "The Ring". Forget "House of Wax" and "Scream". There's a scarier horror movie out there. If you want to see something that?ll really make your flesh crawl, try "Enron : The Smartest Guys in the Room".

Alex Gibney's documentary, adapted from the book by Bethany McLean and Peter Elkind, walks us through a tale of greed, arrogance, and epic criminality, and breaks it down so that it's comprehensible to even those of us who wouldn't be able to identify the smell in a corporate earnings report if it were wrapped around a five-day-old fish. We still may not be able to grasp the fine points, but at least we can see the fish. Gibney patiently organizes the Enron scandal into chapters, provides interviews and commentary and visual aids, and seasons it with ironi- cally chosen tunes like Billie Holiday's "God Bless the Child" (which is not about the baby Jesus, but about looking out for number one).

Enron was a giant house of cards, "built over a pool of gasoline", in the words of a Houston minister who still finds himself counseling distraught Enron victims in his congregation. It must have provided a product or a service once, but eventually, as its stock swirled upward and the air grew thin, it became about nothing but making money. It was about Big Ideas, and the guys who came up with the biggest ideas to keep the shares climbing became the smartest guys in the room.

One of those ideas was "mark to market", a nifty bit of accounting sleight-of-hand whereby Enron booked projected profits as actual profits as soon as a deal was signed Here's how that works : you make a deal, you say "Well, this could make us as much as $50 million", and then you write that $50 million in the books as money in the bank. That was CEO Jeff Skilling's idea. Another winner was setting up dummy off-shore corporations (with cute names like 'M. Yass') to absorb huge deficits that would no longer appear on the Enron books. CFO Andy Fastow specialized in that one, and he skimmed a few million off each deal as a reward for his cleverness.

Maybe the best idea was holding California for ransom. Enron figured out how it could create artificial shortages in the state's energy supply, and jack consumer prices sky-high. It would mean a lot of people going without electricity, but those are the costs of doing business. Another dividend would be the replacement of a hapless governor with a new one who could learn lines. (Was this part of the grand scheme ? Gray Davis looks incredulous. "Hello", he says.)

Besides, it was fun ! Listen to the Enron trader cackling "Burn, baby, burn!" as raging wildfires threaten to burn power lines. It reminds you of nothing so much as of Hitler's contempt for the common people in "Downfall". When asked about the California caper, Jeff Skilling raises a pious hand. "We're the good guys", he says. "Enron is a company that deals with everyone with absolute integrity", adds his boss, Ken Lay.

A few people along the way seem to have been troubled by the giddy persistence of profits with no visible means of support, the bold upward march of bottom lines along numbers that didn't really add up. Occasionally a skeptical voice would be raised, but not very loud. Even so, the suspense seemed to be getting to Skilling. Once, in a telephone conference with some Wall Street analysts, he became irritated with a mild question about profit-and-loss figures, and called the questioner a seven-letter word that ends in "hole".

Bethany McLean's article in Fortune, which wondered diffidently if Enron might be a trifle over- valued, seems to have pushed Skilling over the edge. While trumpeting the soundness of the company, and cheerfully encouraging employees to plow their pension funds into Enron stock, the CEO was quietly cashing out. A few months after he suddenly retired with a few hundred million from dumping his shares, Enron hit the iceberg and all the people in steerage went down with their life savings.

A scam on this scale cannot be worked without a lot of willing complicity. People who should have known better allowed themselves to be seduced, bribed, or bullied into admiring the emperor's clothes. Wall Street bankers, analysts, and brokers joined the chorus, the fine old auditing firm of Arthur Anderson cheerfully cooked the books, regulatory agencies fawned, and politicians ran interference. This is by no means a political movie, but it will come as no sur- prise that where the big money is, politicians tend to gravitate. Kevin Phillips, the former Rea- gan pollster, bitterly notes the relationship between Ken Lay and the Bush family : "Professional courtesy between a sidewinder and a rattlesnake".

The real horror of the Enron story is not the employees who saw their life savings vanish into thin air, or the investors who got burned, or the people of California who were cynically maneuvered into power outages and skyrocketing energy rates and a new governor. The real horror is that the Enron boys were just the ones who got caught ; the smartest guys are still in the room.