Everybody knows about the corporate disaster known as Enron. But not many people, myself included, really know just what the scandal was about, outside of a giant company ripping people off and then folding. Enron: The Smartest Guys in the Room, based on the bestselling book, is as informative as it is entertaining. It's important viewing material for anybody who doesn't yet have an informed opinion about what happened.
For the uninitiated, Enron was a Houston-based corporation that invented a new way of doing business: buying and selling energy futures. Basically, they created a stock market for energy. What went wrong? Well, they never made much money, but they told everybody otherwise, thanks to some shady trade loopholes where they could announce profits based on projected (as opposed to actual) earnings. Once that started falling apart, Enron's traders pulled the dirtiest of tricks: making millions for the company by inventing a false energy crisis in California. Shocking phone messages reveal traders literally calling up power plants and telling them to shut down at random, in order to convince the people of California that there was a shortage – thereby driving the cost of energy sky high. After investors and whistleblowers smelled a rat, Enron quickly went out of business, taking all the money out of its employees' 401k plans with it.
CEO Jeff Skilling and Chairman Ken Lay are the de facto bad guys in the scenario, but it seems they were no more or less to blame for Enron's criminal activities than the scores of greedy, amoral traders working the floor below their cushy offices. Arriving a year after the glut of liberal documentaries in 2004, The Smartest Guys in the Room seems like a johnny-come-lately, but the film itself is less a dig at right-wing corporate culture (George W. Bush's infamous connections with Enron are only briefly touched upon) as it is an angering, useful, nonpartisan look at the fallout of unchecked greed.
There are some bone-dry facts and figures – no matter how Gibney tries to play up the human drama (even opening his film, noir style, with a re-enactment of Enron exec Clifford Baxter's suicide), the scandal remains very much about accounting and shifty policy – and this may require a bit of concentration on the part of a numbers-challenged audience member. But there's enough truly weird stuff – the sordid life of mysterious executive Lou Pai; Enron's bizarre idea of trading shares of Internet bandwidth; the suggestion that California was the chosen target for an energy crisis as a means of ousting Governor Gray Davis, replacing him with corporate yes-man Arnold Schwarzenegger – to keep even the most mathphobic viewers entranced. It won't change your opinion about Enron or what should happen to those responsible, but it will inform that opinion greatly.