Film Review: Enron: The Smartest Guys in the Room (2005)
In 2004, US cinema theatres were flooded with politically charged documentaries. The trend was partially initiated by the triumph of Fahrenheit 9/11 at the Cannes Film Festival, and partly by Hollywood's clear desire to influence the result of that year's presidential election and get rid of the despised George W. Bush. The election ended with Bush remaining in office, but the trend persisted for some time and led to some high-quality works of the genre. One of those was Enron: The Smartest Guys in the Room, a 2005 film directed by Alex Gibney.
The film is based on the book of the same name written by Fortune magazine journalists Bethany McLean and Peter Elkind, which detailed the spectacular rise and even more spectacular fall of Enron - a company that used to be a symbol of the power of the new American economy in the 1990s, only to later become the incarnation of old-school Communist propaganda stereotypes about "rotten capitalism".
The Enron scandal is relatively little known outside American borders. The reason for this lies primarily in the fact that it erupted around the same time as the 9/11 attacks, and thus became deprived of much publicity. The second, and perhaps most important reason, is that this case boils down to white-collar crime - an activity that causes far more damage to the average person on a daily basis than classical crime or terrorism, but which simply is not so spectacular that the average person would pay too much attention to it.
The story of Enron began in 1985 when it was founded by a group of Texas oil men led by Kenneth Lay, and using Reagan's policy of deregulating the energy market, gradually made it one of the giants of corporate America. Enron's rise was spectacular even by American standards, and in a very short time it became the seventh-largest corporation in the US. However, in 2001 it turned out that Enron was a house of cards and its path to bankruptcy was even faster and more spectacular.
In the UK, as elsewhere in the world, it is normal for companies, even the largest ones, to go bankrupt. What infuriated the American public was the fact that Lay and his assistants, shortly before the collapse - which they must have known would happen - sold all the company's shares and secured fat severance packages for themselves, while lower-level employees - encouraged to buy those shares until the last moment - were left literally with nothing.
Gibney's film, divided into chapters, does not deal so much with accounting, statistics or legal issues, but rather tries to explain the scandal as a kind of Greek tragedy in which gifted and capable people succumbed to the temptations brought by rapidly acquired power and wealth. Former company president Kenneth Lay and his director Jeffrey Skilling - a duo that would later join the ranks of the most hated people in America - initially had reason to be proud of their achievements at Enron; Lay as the child of poor parents, and Skilling as an unassuming nerd who physically and mentally transformed into a macho tycoon. The willingness to take risks and accept seemingly nonsensical ideas - such as trading in energy - gradually turned Enron into another story of brilliant business success.
However, regardless of how they overcame many of their shortcomings, Lay, Skilling and many of their associates ultimately failed to overcome the most important one - greed. Partly due to the weakness of their own character, partly due to the fundamentalist interpretation of the neoliberal free market doctrine that allowed getting rich in every possible way, and partly due to the system that encouraged or at least tolerated all this, Enron's directors sought to amass wealth even when there was no justification for it in business results. For this purpose, the stock exchange success became the end in itself, and maintaining a high price of Enron shares became more important than maintaining the company's finances on a sound basis. For this purpose, "creative" arithmetic began to be used in business reports and the creation of a complex network of phantom companies whose only purpose was to hide Enron's losses, i.e. to treat potential future profits as already made.
What makes this film disturbing is the fact that a whole range of institutions such as auditing firms and large investment banks participated, alongside Enron, in the mass deception of employees, shareholders and the American public. The scandal was just the tip of the iceberg. By watching this film, a viewer could conclude that there were a large number of potential "Enrons" among American corporations, an impression which was, three years after the film's premiere, confirmed by real-life events related to the Global Financial Crisis.
Gibney very skilfully puts forward these points, combining interviews, archival footage and narration by Peter Coyote, as well as songs with suggestive titles and content. But nothing in the film is as effective as Enron's own propaganda materials, i.e. the video clips in which Skilling, as a person with an obvious sense of humour and self-promotion, mocks the very activities for which he has been accused.
Enron is a very good documentary, but in the end, Gibney, like many American filmmakers at the time, still couldn't resist the temptation to attack Bush. Although he claims that his efforts to find evidence of Bush's involvement in the Enron case did not yield any result, the film nevertheless contains scenes suggesting close family ties between Lay and the Bush family.
Even less convincing is the suggestion that the California energy crisis and the role Enron's speculative energy trading had in it was the result of a conspiracy aimed at removing the popular Democratic Governor Gray Davis, who had allegedly been considered a serious contender against Bush in the 2004 election. On the other hand, this segment contains extremely disturbing audio recordings of Enron's energy brokers expressing joy at the collapse of California's electricity grid and forest fires that will drive up electricity prices and Enron's profits to the sky.
The biggest shortcoming of the film is the lack of objectivity in portraying the political dimension of the case. The film thus forgets the prosaic fact that Enron had its golden age during Clinton's presidency, and that its directors provided financial support to both leading parties in the US. Thus, Kenneth Lay once slept over at the White House - an honour Clinton usually bestowed on financiers of his election campaign. And it was the Clinton administration that put pressure on governments in whose territory Enron had business ambitions, like in Croatia, where there was a serious attempt by the US corporation to take over the national power company.
Nevertheless, even with these essentially irrelevant shortcomings, this documentary restored faith in the future of the genre shaken by the triumph and fiasco of Fahrenheit 9/11.
RATING: 7/10 (+++)
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