Thursday, February 15, 2007

Movie: The Smartest Guys in the Room

Based on Bethany McLean and Peter Elkind book of the same name, Alex Gibney’s documentary The Smartest Guys in the Room is a necessary reduction and simplification of the Enron scandal gratefully explained in non-business, pedestrian terms. The book Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron was an exhaustive look at the scandal by Fortune magazine journalist Bethany McLean, who penned the first story questioning the market dominance of Enron, “is Enron Overpriced,” published in Fortune, March 5, 2001. By all accounts, this was the first negative or even questionable coverage of Enron to appear in print. Authors McLean and Elkind do all but take the credit for getting the Enron death spiral started. Nevertheless, the Peter Coyote-narrated documentary is assembled in such a way to demonstrate both the arrogance and naivety of the three Enron principles, Ken Lay, Jeff Skilling, and Andy Fastow.

The documentary remains faithful to the book insofar as what is dealt with on celluloid is concerned. In deference to an obvious time factor, director Gibney leaves out entire sections of discussion, most critically Rebecca Mark, the Pussy Galore of Enron who wasted billions of dollars on the ill-conceived deals in Dabol, India and later with the Enron water concern Azurix. She would have added sex-appeal to the case but her absence in the documentary is no deal killer as there are plenty of other examples of faulty thinking to consume. Time is allotted to Ken Lay and Jeff Skilling humble upbringings and to their ultimate academic and political successes in the early years of Enron. They are certainly not treated sympathetically, but the authors and director do take a human interest position in the documentary, carefully illustrating how otherwise good people can make profoundly bad and, in many cases, illegal decisions. Time is also given to the early Enron Energy scandal that took place in the New York offices in the late 1980s that threatened to sink Enron then, setting up the pattern of pushing the business envelope far into the red area of impropriety.

The perspective of both the book and documentary is well beyond the simple contemporary journalism surrounding the Enron story as was the case with Wall Street Journal writers Rebecca Smith and John R. Emshwiller’s 24 Days: How Two Wall Street Journal Reporters Uncovered the Lies That Destroyed Faith in Corporate America, which focused on the 24 days between Enron’s 2001 third quarter earnings report and the company’s bankruptcy. McLean, Elkind, Gibney spend much more time behind the stories than on the revelation of the story. The non-technical content of the documentary helps define the level of graft and mismanagement that took place at Enron, placing blame with everyone involved. It is a must see for anyone interested in corporate scandal in the early twenty-first century.

This review was first published in

© Copyright, C. Michael Bailey, 2007