Enron: The Smartest Guys in the Room
Written and directed by Alex Gibney
Dendy Cinemas from October 13
REVIEW BY LACHLAN MALLOCH
"Burn baby, burn!" These malicious, greedy words of an Enron trader, referring to a bushfire threatening power lines during the height of California's 2001 energy crisis, are the dramatic climax of Enron: The Smartest Guys in the Room, Alex Gibney's new documentary about the US's second-biggest corporate bankruptcy.
The audio recording of Enron traders in the midst of their rapacious game is one of the great scoops in this film. The other is the highly revealing sources who appear in the film, some of whom break ranks with their erstwhile cronies and help Gibney take us deep inside the secret world of US big money capitalism.
Enron was formed in the mid 1980s and rose to dizzying heights of wealth and power during the '90s. Enron was hailed as a new corporate messiah. The company's peak market value of US$70 billion was only part of the picture. Enron's size, its strategic position in the energy market and its political connections made it more powerful than California, the largest state in the US and the seventh-largest economy in the world. All of these factors combined to make Enron virtually an extension of the US ruling clique.
How then did this corporate monolith crash to bankruptcy in just 24 days? Who was responsible and why could they get away with it?
Gibney's sharply crafted documentary goes a considerable way to answering those questions, in an intriguing way that viewers can easily follow. That's an impressive achievement, given the complicated nature of the company's (fraudulent) accounts, its myriad devious tricks and the large number of accomplices involved.
The film makes a big deal of Enron's advertising slogan, "Ask Why". Ironically, while the company's share price and financial reports reached incredible heights and continued to climb, most people didn't ask why. The small handful of doubters outside the company, including Fortune magazine reporter Bethany McLean and Merryl Lynch analyst John Olsen, were targeted as corporate enemies.
This is hardly surprising when we learn of the extraordinarily aggressive, macho culture inside Enron, which only increased with the rise of CEO Jeff Skilling and his cabal of top executives. The nastiest internal expression of this was the Performance Review Committee — known as "rank and yank" — whereby the lowest-ranking 15% of the work force would be automatically sacked following an annual peer review.
Externally, Enron's corporate machismo reached its extreme in California's energy crisis, when the company's traders "gamed" the market to push up electricity prices and help create the rolling blackouts of 2001. Enron helped to create the crisis, which cost the state over $6 billion, then made obscene profits while the state lay crippled.
The film itself "asks why" only to some extent, as it's mostly devoted to investigating how Enron became so rich and managed to evade the law in the process. Gibney deliberately focuses on key major characters and their psychology, leaving the audience to think for themselves about larger political questions. This is partly why the film works so well as a crime thriller, but it also means there are shortcomings.
For example, it is naive and misleading to lash Enron for profiting from "gaming" the Californian electricity market while it was in crisis, without pointing out that the capitalist market itself is set up as an enormous money-spinning game.
It's only when the losses are so great and top executives face criminal charges that capitalism stops being a game for the big players. Several criminal convictions have already occurred. Skilling and former Enron chairperson Ken Lay face fraud and conspiracy trials commencing on January 6.
But Enron was never a game for the 20,000 employees who lost their jobs and received average severance pay of only $4500, or the 29,000 workers made redundant when Arthur Andersen lost its licence to practice accounting in the USA, or the millions of Californians who suffered blackouts and prohibitively high power bills.
No, they are merely chips to be gambled in the giant casino of the capitalist economy. And unfortunately, this film doesn't give them much of a look either, barely mentioning their fate. Not a single sociologist, trade unionist or political activist appears on screen to discuss the social consequences of Enron, which seems a glaring omission.
After all, the film convinces us that Enron was not a rogue corporation. Virtually every aspect of the US establishment was complicit in the Enron disaster, from prestigious Arthur Andersen, to leading investment banks, leading lawyers and successive government administrations. Thus the stupidity and social recklessness of capitalist "self-regulation" is at the same time starkly revealed, yet largely untouched, by this film.
Perhaps it's best to see Enron as a companion piece to two other superb recent documentaries, The Corporation and The Take. The former characterises companies as inherently "psychopathic", while the latter gives us a glimpse of what's possible when ordinary people decide they're not going to be excluded from deciding their future.
From Green Left Weekly, October 12, 2005.
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