Even for those already familiar with the Enron debacle and its continuing effect on the global economy, Enron: The Smartest Guys in the Room is a shattering, depressing experience; akin to being boiled alive in assorted spices and oils, but only after having your genitals pounded with an ax. For the few remaining holdouts who don’t believe that capitalism — while the only viable economic system we’ve got — is inherently dehumanizing and corrupt, this masterfully executed documentary from director Alex Gibney should bring you into the camp of enlightenment. I say “should,” however, because there will no doubt be those who claim that Enron was a freakish aberration; a collection of bumpkins and idiots who took a vibrant corporation and flushed it down the toilet. In reality, Enron was symptomatic of a larger cultural rot, where quick profits and massive layoffs were seen as ends in and of themselves.
Moreover, the Enron collapse was far from a quiet conspiracy among a few well-paid executives, as guilty as they no doubt are. For the greed and callousness that smashed one of Wall Street’s darlings to bits permeated the entire structure of the organization, from the boardroom to the trading floor. If Ken Lay and Jeff Skilling are madmen lusting for private gain, there are hundreds, if not thousands, of equally self-serving cocksuckers willing to do their bidding. For every Hitler, there are millions of “little Eichmanns” eager to man the camps.
The primary focus of the film concerns the criminality of Ken Lay, Jeff Skilling, Andy Fastow, and other well-connected “dreamers,” which is important when one considers that many reports of the doomed company often cite “stupidity” and “recklessness” rather than cold-hearted deliberation. At every step of the way, these men knew exactly what they were doing, even if they didn’t quite know when the castle would tumble into the sea. Take the policies of “mark to market” or “hypothetical future value.” On their face, they are typical of vile corporate-speak, where seemingly benign (and inspiring) phrases are concocted to sell investors and stockholders on the idea that the company is simply swimming in money. But upon further review, they reveal their bitter truth — in order to make companies profitable in the short-term (and thereby appeal to the Wall Street Journal crowd), they must count “profits” not yet earned. In other words, if a deal is discussed — without regard for feasibility or contractual obligation — the “revenue” is deposited as if consisting of cash-in-hand. In many cases, the “earnings” in question may not come to pass for many years (if ever), but quarterly reports act as if checks are in the mail.
Despite what others may tell you, you can bet that Enron was not the first (and far from the last) to perform accounting in this manner (especially since Arthur Anderson was helping cook the books). Because everything is about the stock value today, the means by which companies arrive at that number are simply irrelevant. Enron, the poor saps, simply got caught doing what is a standard (and largely acceptable) business practice.
While having to listen to the CEO, CFO, and COO rationalize their behavior was revolting enough, the other employees — most of whom will remain forever nameless — are as equally deserving of long prison sentences and/or the firing squad. These gullible, sanctimonious men accepted the official cheerleading as gospel and proceeded to ruin thousands of lives in the process. Take the California energy crisis, one of the vilest results of deregulation in U.S. history. To believe Rush Limbaugh and other right-wing liars, the rolling blackouts occurred because “environmentalist wackos” refused to allow more power plants to be built, as they obviously cared more about the spotted owl than everyday people. They even helped tar the Governor with the moniker “Gray-Out Davis,” thereby ensuring his putsch-like removal from office a short time later.
In reality, the shortfalls were wholly artificial and cruelly calculated; brought about by manipulations at Enron to create demand and drive-up prices. But don’t take my word for it, listen to the audio tapes of Enron employees who discuss cheating grandmothers out of their money and rooting for wildfires because they were bringing millions of dollars to the company they so slavishly admired. People suffered and the state of California lost billions, and these paid enforcers of Enron doctrine are directly, unavoidably responsible. And yet we still have policy wonks who insist that deregulation works. And sure it does, only not for the public.
One of the few heroes in this mess is the late Cliff Baxter, an Enron executive who thankfully committed suicide as the pressure started to build. Remarkably, he felt a pang of conscience (or so he says in his suicide note), but I have a feeling it was the prospect of facing a future without his mansion and numerous cars. Again, he blew his head off, so he must at least be applauded for sparing the taxpayers a trial where he would have no doubt used some pathetic defense to paint himself as a victim. It’s always amazing that these creeps justify their exorbitant salaries and stock options by saying how indispensable they are to the company’s future, but when corruption and criminal behavior are uncovered, they are the first to plead ignorance.
If a man “deserves” $30 million a year for helping bring a company forward, that same man must be publicly flogged (or shot) when his direct involvement results in massive job losses and out and out theft. Or consider someone like Lou Pai, who actually cashed out to the tune of several hundred million dollars before the shit hit the fan. Now, he’s lounging on some beach and just happens to be one of Colorado’s largest landowners. Oh, and he’s also a pervert and adulterer; the sort of man who leaves his wife for a stripper, and would most likely be the first in line to attack any “assault on America’s values.” If he resides in or even visits my fair state, rest assured that I will work diligently to bring about his painful termination.
All told, this is a rather conventional documentary in terms of presentation, but it never remains anything but compelling; infuriatingly so. But whereas some films bring righteous indignation to the level of pursuing social justice, this is the sort of rage that quickly turns into a crippling paralysis. As with the equally maddening film The Corporation, I was held fast by the realization that Enron was able to perpetuate its rank swindle solely because there were banks, legislators, and so-called regulators who helped them along every step of the way. No one checked the fine print because they knew what it contained.
Why spoil the party when so many people are making buckets of cash? Yes indeed, these are the same financial institutions that will chase a college student to the ends of the earth in order to settle a $600 overdue credit card payment, but when it comes to inflating stock prices, gutting pension plans, and helping to throw the economy into a tailspin, they are strangely quiet about the possible moral implications. And despite the dubious connections to President Bush and other Texas Republicans, Enron is an American problem; the result of a system-wide capitulation to the forces of greed that knows no party label. Remember, it was on Bill Clinton’s watch that the stock market ballooned to heights that could not be justified by any form of reality. Start-ups and other hot companies made billions, even though the money could never be located on planet Earth. Eventually, the hypothetical must be called to account. And when it is, the downfall begins.
Gibney’s film, then, indicts anyone who has believed that one could make something from nothing, or fell for the promise that for only a little down, one could build an empire. The Enron Era, though far from over, made assholes and suckers of us all, as we traded concerns in public health, education, literacy, and civil liberties for quick fixes and the promise of a 36,000 Dow Jones. In some ways, despite the official arrogance that warrants life sentences for the perpetrators, I am strangely unmoved by the stories of those foolish enough to throw everything into the lone basket of a company pension.
Of course, it needs to be said that as the Enron stock fell and those at the top cashed out, lower-level employees were frozen out and made to suffer unjustly. Nevertheless, these same folks believed the rah-rah newsletters and company e-mails, and didn’t once question the idea that corporations could make billions by merely pushing paper around. And if you’re putting every spare dollar into a market that is pumped up by rumor and speculation, you can’t be altogether surprised when facts come knocking.
One can only hope that Mr. Lay and his band of merry criminals will face the big house, but I’m not holding my breath. And even if they are convicted and sentenced to jail, the time will be soft and frustratingly rape-free. Those in possession of marijuana face muscle-bound punks and neo-Nazi madmen, but executives are handled with care and dignity. Their convictions, if secured, will be largely symbolic, as are the “perp walks” which satisfy our need to see brief, televised humiliation before supper. But here is an understanding — let’s get this over with, satisfy the public, and keep capitalism strong. It’s their way of saying that if the bad apples are removed, the system pushes on — healthy, vibrant, and scandal-free.
But these men, as loathsome and worthy-of-death as they are, have a strange way of being replaced by the like-minded; grinning clones who demand a “new accountability” and promise to “shake things up,” but do little that isn’t cosmetic and shallow. Once the spotlight has dimmed (and it will, my friends, with our perpetual Orwellian war to distract us), it will once again be business as usual, and we’ll scratch our heads and wonder how it all happened. Because if there is one certainty to our way of life in these United States, it is the promise that those with wealth (and hence, those with power) will remain so, but only at our collective expense.