Strong Response: Enron: The Smartest Guys in the Room

Enron: The Smartest Guys in the Room is a documentary based on the bestselling book, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron. The book was written by Bethany Mclean and Peter Elkind, and they both provide insight into the figures behind the scandal and the events that took place around the rise and fall of Enron. Additionally, they provide a sense of narration and continuity to the film filling in between interviews with Enron insiders. The movie is organized around a series of sections much like a novel with titles such as the first and last sections: “Kenny Boy” and “It Was a Wonderful Life.” Only two of the section titles were actually taken from the book: “Guys with Spikes” and “Ask Why, Asshole.” The documentary begins by establishing that it will focus on the people of the company rather than just the numbers. This approach is expressed by one of the authors of the book, Mclean. They argue that behind the scandal these were “just people.” The first two sections of the documentary focus on the two key figures behind the scandal: Ken Lay and Jeff Skilling. The documentary also presents information about other executives in the third section particularly Lou Pai, CEO for Enron Energy Services (EES). However, the majority of the film focuses on Ken Lay, Jeff Skilling, and Andy Fastow, CFO of Enron. Sections four through six focus on how the stock analysts and the bull market contributed to the rise of Enron. Section seven is about the CFO, Andy Fastow, and his fraudulent business dealings between Enron and the company he was a partner of, LJM to cover up the massive debt that Enron had accrued. This section leads into the eighth section addressing the fact that part of the reason the Enron scandal was allowed to occur was because there were no checks and balances on them. The accountants, Arthur Andersen, lawyers, Vincent & Elkins, and financial institutions, which included J.P Morgan Chase, Deutsche Bank, and Merill Lynch were all basically knowing participants in fraud. Section nine kicks off the fall of Enron with the failure of their broadband venture and the rolling blackouts that occurred during deregulation in California. The last three sections chronicle the fall of Enron. Finally, the documentary ends with comments from several people interviewed in the film about the greed and lack of questioning methods and fraud that contributed to Enron.

The approach to covering this scandal is unique and definitely helpful when appealing to a mass audience. Alex Gibney opens the scandal up to people without knowledge of business and stock trading. It provides enough information and history about the company and executives to give the audience a basis to understand the scandal. Additionally, the structure kept the film interesting and also easy for the audience to follow and comprehend events while they placed them within a larger framework. Interviews with former Enron employees provided firsthand experience that included both factual information but also the emotional and personal experiences that they saw as the company progressed. They begin very early in the film promoting a look beyond just the numbers of the corporation and scandal to the people involved, because they claim that “they were just people.” Although the limited scope of the film and concentration on a few key figures inside Enron can be criticized, this documentary was accessible and provided additional information about the history of the company and business practices that the general public would typically not have access to. This film provides a more complicated and also enlightening approach to the topic than most of the audience probably would have considered before. It also provides a useful lesson and warning about the ease with which a corporation can slide into illegal and unethical practices in their quest for increasing profits.

Most criticism of this film is mostly due to time constraints and the limited knowledge that a mass audience can bring to the film. The book was probably able to provide more information and insight as well as look at more figures and events surrounding Enron due to the nature of the media. The filmmakers made excellent choices choosing topics and figures to focus on in the film especially to reach the widest audience possible and provide the most information and richest view. However, there were some topics left unexplored that perhaps would have explained many of the questions surrounding the scandal. Gibney provided a greater context outside of Enron and its executives that helped contribute to the scandal, which many people would probably not consider. Blame is not strictly limited to the company and the fraud that was committed on the inside; however, the film mostly just begins to lay blame on outside financial institutions and stock analysts. Although, many of the analysts admit in the film to realizing how Enron was able to rise without any actual evidence of profits and then suddenly fall, I think the film would have benefited by focusing on this message more. The film mentions the involvement of banks in fraudulent business dealings, but they lack the elaboration on this point that they demonstrate with the analysts. Perhaps it was easier to gain access to stock analysts and traders, but the actual actions of the banks seemed to be downplayed. Additionally, the focus on the three main figures, Lay, Skilling, and Fastow, seemed to detract from the message that this event occurred within a larger economic and political system. The film seems to demonize these men as unethical people that did not care about the law or their own employees. However, the audience does not get the same sense of evil with the banks and other figures involved with the scandal even though it seems that their actions and motivations were quite similar.

The biggest criticism of the film would be that it does not provide many solutions to the problems. It falls short by focusing on laying the framework and history of illegal and unethical practices. The audience is left asking: how can we keep from allowing this to happen again? Many of the people blamed in the film are still working and probably acting in the same way they did when they were involved in Enron. Obviously, the major players in Enron and Arthur Andersen have been disciplined. However, many of the traders that worked for Enron were featured in what could be described as horrifying audio involving the blackouts in California. It seems as though perhaps the biggest message of the film is almost a useless one. They seem to be attack the basic system of business and free markets in America, but they do not provide a lot of answers about how the situation can be remedied.

The film does take a moralistic view and at times it seems to preach against the greed and lack of protection that exists in free market systems. However, this view may be justified, because as this film points out, Enron was not an isolated incident involving a few greedy corporate executives. People outside of the company had to be involved for Enron to be allowed to act as they did. This documentary in the end does more than document the rise and fall of Enron. It exposes the flaws in the economic and political system that need to be remedied to prevent a future tragedy.