Enron is back

The word Enron has become shorthand for corporate malfeasance, but the scandal itself was forgotten a couple years back. Then along came Alex Gibney’s documentary “Enron: The Smartest Guys in the Room” (Magnolia Pictures) to remind us of all the damning details. It may seem like old news, but Gibney makes a strong case for Enron’s continuing relevance. “It’s a story about immoral behavior, about a fundamental threat to our democracy and it’s about our pocketbooks,” he said in a Hatchet interview. “It’s really a story about people and in some cases good people gone wrong, about pride, arrogance, avarice – juicy stuff worth digging into.”

“Enron” is based on a book by the same name by Peter Elkind and Bethany McLean, two Fortune reporters. Gibney uses McLean’s commentary and quotes from former Enron employees to depict a “macho culture” built by “former nerds” who discovered the confidence millions of dollars can bring.

Gibney casts the scandal as a sign of larger problems in our corporate culture, not the machinations of one rogue group of CEOs. Enron isn’t an anomaly, the director says; what Ken Lay and his associates did is just “an exaggeration of business as usual” – the shady dealings endemic to a deregulated, free market economy.

Gibney depicts Enron as the corporate Oedipus, and in a way it is. Sometimes his analysis is a little flippant – not everyone who likes strippers steals $350 million from their company, as CEO Lou Pai did. But Gibney convincingly shows how over-competitive management and an emphasis on “creativity” encouraged employees to be ruthless and unethical. One of the most shocking bits of the movie is a recording of Enron traders laughing about raping “Grandma Millie” by manipulating the power crisis in California.

Gibney also shows how financial institutions let Enron get away with fraud. “Nobody wants to take responsibility for the fact that they knew in their gut that was something was wrong here,” Gibney says. “The investment banks – there are lots of e-mails that show they knew what was going was wrong, and they did it anyway. Why? Because they were making too much money.”

Gibney keeps things light with familiar documentary tricks. Anachronistic music – “a toe-tapping Greek chorus,” in Gibney’s words -introduces each segment. “Lovefool” by the Cardigans plays as stock prices are artificially raised. Ken Lay’s biography is overlaid with “Son of a Preacher Man.” Clips of a rabbit coming out of a hat and a mad scientist at work play while ex-employees talk about Enron’s fictional prosperity.

But what really keeps the movie going is the footage Gibney uncovered. At a company meeting just before Enron’s total collapse, Ken Lay reads an employee question off an index card: “Are you on crack? Because that would explain a lot.” During the energy crisis, President Bush refuses to help California regulate pricing and says that the best way to help the state is “to be good citizens.”

This is humor at its blackest, and Gibney devotes the end of the movie to the victims of the tragedy – low-level Enron employees. One California power line worker explains that he wasn’t even allowed to access his stock portfolio as Enron collapsed; he went from a high of $348,000 down to $1,200 in savings.

Gibney ends with a bit of hope: Skilling and Lay will go on trial in January 2006. “I’m not sure by the time the trial’s over whether anybody will still be interested, but I think a lot of stuff will come out,” Gibney says. After seeing “Enron,” you’ll have trouble waiting that long.

“Enron: The Smartest Guys in the Room” opens Friday at Landmark E St. Cinema.

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