In this worth-seeing documentary Enron: The Smartest Guys in The Room, cliches and metaphors are bandied about like candy. The Emperor Has No Clothes. Turning Hay into Gold. Jeff Skilling used Andy Fastow like Kathleen Turner used William Hurt in Body Heat. These phrases would be comical if they weren't so darn apt.
I finally dragged my husband and some friends to see the Enron documentary. Overall, I thought it told the story the best way that it could be told. (As I've mentioned on my blog Conglomerate, I practiced law and was a law professor in Houston from 1994-2003, and Enron was my client in 1997-98). Instead of focusing on the structured finance vehicles and conflicts of interest that merely covered up losses, the documentary begins by looking at the culture and personality of the company that may have resulted in the losses themselves. The interesting part of the Enron story that makes it different from every other accounting fraud story is the risk-taking culture there that resulted in such hubris-filled business risks that backfired, such as (my project) the Dabhol, India power plant, the Azurix water plant, and the dreams of broadband. The documentary begins by examining that personality that enabled Enron to create markets and industries that did not exist beforehand but that would ultimately be its downfall.
If you are an expert on any piece of the puzzle, you will be able to criticize that piece of the puzzle in the documentary. For example, the documentary describes "mark-to-market" accounting in about 3 sentences, so of course, the description is not entirely apt. Of course, the movie could have tried to describe mark-to-market in 300 sentences, but then everyone would walk out of the movie. When the narrator tells the audience that Merrill-Lynch bought a barge from Enron, the audience chuckles because what would ML need a barge for? But, in 1999, many financial firms were buying assets, but that detail is omitted. The documentary describes the California power crisis and details how Enron called "the Power Plant" (words on the screen) to tell it to shut down in order to increase demand for electricity. But, the documentary does not mention that Enron did not own that power plant (or any in California) and does not mention the big power company that did.
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