Enron: los tipos que estafaron a América

When Enron filed for bankruptcy at the end of 2001, it was a shock to most Americans. But as "Enron: The Smartest Guys in the Room" shows, it shouldn't have been. The documentary, narrated by Peter Coyote, traces the energy giant's origins - including CEO Ken Lay's childhood - to its rise as one of the largest corporations in the United States.

What's really interesting is the intricacy of Enron's actions around the world, and how it pulled off all its shenanigans (aided, of course, by Kenny Boy's contributions to George W. Bush's first presidential campaign). Among Enron's more vicious acts was its manipulation of California's electricity in summer, 2001, and how Arnold Schwarzenegger let the company off the hook. Not to mention that Enron's collapse was accompanied by Lay's draining of the employees' retirement.

Enron's downfall - followed over the next year by the implosions of Adelphia, WorldCom and Tyco - just goes to show the dangers of letting corporations run rampant. The whole way through, the documentary manages to be funny, just at the sight of what Enron was doing, abetted by Arthur Andersen.

All in all, I definitely recommend "E:TSGITR".

PS: In "Bowling for Columbine", Michael Moore proposed a TV show called "Corporate Cops" (based on "Cops!"), in which people like Ken Lay would get strip-searched.

I agree with previous posts: "Enron: The Smartest Guys in the Room" is right up there with the biggest horror films of our time. And this one is scarier because it's real.

It's hard to say what boggles the mind most:

the complicity of Arthur Andersen, the banks, and the traders in this elaborate scheme of making a failing company look profitable;

the fact that the executives cashed out their stock at high prices and froze the employees' stock accessibility until it was worth nothing;

the derisive laughter of the traders over the Enron-caused blackouts in California ("let them fall into the ocean - let them use candles);

that Lu Pi, a guy who ran a failing Enron company, left that company with $250 million in his pocket;

or the fact that Ken Lay died before they could convict him of anything. Take your pick, it's all disgusting.

When one of the California power companies called Enron and said there was a fire in the plant, the trader chuckled and said, "Burn, baby, burn."

That sums up Enron's, the banks, the traders', and Arthur Andersen's attitude toward the common man - burn, baby, burn. Let's hope that's what Ken Lay is doing right now.

This is a great documentary even if you don't understand business. The only part I didn't quite get were these dummy corporations that Flatow started up to hide Enron's losses which were then invested in by the banks.

That was a little complicated, but you'd think someone would have realized that the CFO of Enron running companies that were supposedly selling to Enron was a conflict of interest. Funny, no bank picked it up. They won't give you a mortgage, but they'll pay a fortune to a dummy corporation.

Probably my favorite part was the mark to market accounting system employed by Enron and signed off on by Arthur Andersen. I have no understanding of a reliable accounting firm allowing such a thing.

In other words, if I have a book proposal, I can report a profit of, say, $30,000 on the book even though it isn't sold and I haven't seen a dime. And one wonders how they cooked their books. With help, that's how.

How did Enron become the world's largest corporate bankruptcy? A culture of greed, and fraud, coupled with an accounting system ripe for abuse, was part of it. But one also needs to understand the way that markets work (ironically, since Enron claimed to know this better than anyone else). The rise in Enron's share price had all the hallmarks of a classic pyramid scheme, whereby, if you claim to be making enough money, you can get away without proving it, because investors all want in, not out. Meanwhile, Enron bankrolled its regulators with the money it did have to stop them asking about the money it didn't. Finally, when all this was exposed, the firm was worthless, even though there had been at least some successful businesses within it, because, fundamentally, like all businesses, Enron has sold confidence and now this commodity was in very short supply; but Chief Executive Jeff Skilling's claim that "it was a classic run on the bank" is disingenuous to say the least, given that the real money that Enron did (at one time) make was earned through deliberately operating with very low reserves. 'The Smartest Guys in the Room' tells some of the story of Enron's collapse: and it's a compelling tale, although I found the use of background music rather annoying (the story is divided up into titled sections, with each section being the name of a song, which feels rather heavy-handed and obvious). But is gives a good flavour of what went on at Enron, although it doesn't go into the full details of the crooked financial transactions, and (like all the books I have read on the same subject) doesn't manage to answer the killer questions: what were, year-on-year, Enron's real profits and losses? and who knew what, when? Probably, these are impossible questions to answer: the picture that emerges is of a company where the bosses didn't want to know, everybody's job was to keep their superior happy and rich, and if you could do this, they wouldn't ask how you had managed it (or how rich you had made yourself in the process); a happy conspiracy until, eventually and inevitably, the money ran out. And as I said before, the irony is that this company that tried and failed to buck the markets was itself the high priest of market capitalism. If Enron's failure at least induces a dose of scepticism about the self-proclaimed (and invariably loaded) champions of market economics, some good at least will have emerged from what is otherwise a sorry tale.

...because I can't see what's different from what happened here and what the banks did that caused the global collapse of 2008. Turning hard assets into derivatives and selling them on the market? Knowing that a product is worthless and encouraging its trade anyways? This sounds familiar, it's just Enron traded derivatives on fuels and the banks did it on real estate. Thus I guess there is nothing different here other than the banks committed crimes on such a large scale that all of the criminals wouldn't fit into prisons without us building more, plus all of those campaign contributions! Congress couldn't let THAT dry up! So here we sit with 0% interest rates on our savings until the banks recoup every cent that they lost, so I don't see how this is different from what was threatened in Crete - confiscation of a portion of all depositors' funds to make the banks there whole, except here in the U.S. it is happening slooooowly, so nobody complains of outright theft. But I digress.

Now to the film itself. It takes almost two hours to chart the history of Enron, from the beginning in the mid 80's to its sudden collapse in 2001. There are interviews with everyone involved with the company from accountants to regular employees, and like all Ponzi schemes, people might have had their doubts and suspicions, but nobody wanted to upset the money train especially if they are on that train. And like all Ponzi schemes Enron came to a sudden abrupt end when there was no way to hide the fact that all of the money and the profits were not real.

Also very interesting is the gladiator/macho corporate culture described, largely caused by COO Jeff Skilling waking up one day, realizing he was a nerd, and wanting to throw off that nerd persona. He lost weight, worked out, got Lasik done on his eyes, and began to organize adventure trips for himself and an inner circle of Enron executives, some of which involved actual bodily danger. He instituted an Enron employee ranking system in which employees were ranked from 1-5 and those in the lowest ranks were automatically terminated. It was the Billionaire Boys Club minus the murder and involving a much bigger club.

Of course, now the scandal looks almost quaint compared to what we've been living with since 2008.In 2005, when this film was made, such an implosion by a company that had been named "most innovative company" for six consecutive years by CEOs, 1996-2001, the last year being the year of Enron's collapse, was still quite the spectacle. The irony is that if Enron had collapsed in 2011 instead of 2001, I doubt anybody would have gone to jail. Heck, it might not have even been newsworthy except in Texas! Also, the company might have even received a federal bailout.

The highlight of the film for me - a video "Christmas card" to Ken Lay made by Enron execs in which they do a comedy sketch about "creative accounting" which turns out to be EXACTLY what the company was doing that hid their problems.

A very interesting expose on the greed, hubris, lies, etc. that brought Enron down. This film is well-done and digs up a lot of dirt. The PBS viewing showed a little clip after the film which discussed the strange trial results, which was probably the biggest problem with the film - it pretty much ends with the bankruptcy of enron and doesn't show much about the trials, since they took place later, although they would make for a great inclusion. To me, the most incredible part of the film is that fact that these guys would stand up every day and tell bold-faced lies to the employees, the government, the investors, and make it all sound good. They had to be thinking in the back of their head "it's all going to come crashing down someday"...