Enron: The Smartest Guys in the Room Movie Review

When Enron collapsed three years ago, it was hard to sort out what actually happened aside from billions of dollars being lost and a whole lot of paper shredding. The important new documentary, Enron: The Smartest Guys in the Room, reveals greed and deceit as the biggest reasons for the company’s plummet from financial grace.

Three Enron executives drive the downfall and the film: Kenneth Lay, the company founder, who in seeking to deregulate the energy market and leave behind the memory of his poor childhood, developed a billion dollar idea that he couldn’t leave alone; Jeff Skilling, the nerdy financial whiz who figured out that energy could be traded like stocks and bonds; and Andrew Fastow, the fall guy who organized a series of dummy accounts to essentially keep up appearances.

As one interview subject says, “This was a human tragedy.” That’s an understatement. What all three men have in common are monstrous egos fed on a diet of money and power. Years before Enron’s smoke and mirror scam was exposed, Lay overlooked major financial trickery from two employees because Enron’s books showed profit. Skilling morphed from a Harvard geek to a buff adrenaline junkie, inspiring a cult of traders who behaved like the cast of Boiler Room; and smooth talker Fastow is the huckster, a man who used his charm and salesmanship to convince companies to sustain the company’s smoke and mirrors act.

Very few people asked questions. As long as Enron made money — or had the appearance of showing a profit — no one cared. And Enron could have their profits “be whatever they wanted to be” thanks to Skilling’s ability to use a technique called “mark to market.” Under that arrangement, Enron could tout whatever outlandish scheme they had — selling broadband, selling the weather — and the company could post its profits based solely on predictions. But it was only a matter of time before something went wrong; in this case a combination of a weak stock market, Skilling’s abrupt exit, and a whistle blower (vice president Sherron Watkins) actually looking at the math and finding that nothing adds up.

Director Alex Gibney lets the reporters (including the authors of the movie’s source material), financial analysts, former Enron employees, and video clips tell the story, without any hand-wringing or editorializing. We get a clear look at the seductive nature of capitalism, whether it’s the investors who are easily swayed by PR and the promise of good news, or those running the company, like Lou Pai, an Enron exec whose love of strippers was notorious. He actually married a stripper he impregnated, but not before leaving the company in financial ruin. But like Lay, Skilling, and Fastow, he cashed in his stock first. (Note: Lay’s and Skilling’s trials, the film notes, start in 2006.)

One would think that for a country that’s had big business screw it over on more than one occasion, Enron’s collapse could have been avoided. And that’s why Enron is so important and should be grouped together with movies like Fahrenheit 9/11 and Control Room. (Fun fact: The Bush family appears in all three movies.) Aspects of our lives that we assume run on autopilot can be disrupted by simple human emotions like greed, vanity, and power. Fastow, Lay, and Skilling wanted to make money. Investors were fine with that concept, as long as their pockets got lined. But millions got screwed: Californians, who were at the mercy of Enron’s control of the energy market, which the company’s traders used like a puppet master to get the highest price; the countless employees who lost their pensions and benefits because Enron folded, and Americans who added a layer to an already thick coat of cynicism. And let’s not start with Gray Davis.

Enron: The Smartest Guys in the Room gets its message across, though there’s only so much talking that can carry a movie, and Gibney’s attempts at Errol Morris stylistic interludes falls short. Anyone who sees it is bound to pay more attention to the Next Best Thing, and maybe they'll do something that Enron’s employees never did, even though it was the company’s motto: Ask questions.