Just ask Why

I just finished watching the documentary about the spectacular collapse of Enron. It is called Enron, the smartest guys in the room. I don't know about that. But, they are clearly the creepyist guys in any room.

Here is the trailer.

And go on and click on the home site. It's a lot of fun and its well done. I entered under the code name Piggy.

Being in the energy business, I have had my scrapes and run-ins with these guys. They always came off to me as low rent, in over-their- heads hucksters. I guess because, well, that's what they were.

I will spare you all but one detail.

Once, when Ken Lay had his political plans foiled by a good public servant, he made his displeasure known by squeezing her hand in a reception line to the point of pain.

Now there is a real class act for you.

Here is Roger Eberts take:

"This is not a political documentary. It is a crime story.

No matter what your politics, "Enron: The Smartest Guys in the Room" will make you mad. It tells the story of how Enron rose to become the seventh largest corporation in America with what was essentially a Ponzi scheme, and in its last days looted the retirement funds of its employees to buy a little more time.

There is a general impression that Enron was a good corporation that went bad. The movie argues that it was a con game almost from the start. It was "the best energy company in the world," according to its top executives Kenneth Lay and Jeffrey Skilling.

At the time they made that claim, they must have known that the company was bankrupt, had been worthless for years, had inflated its profits and concealed its losses through bookkeeping practices so corrupt that the venerable Arthur Anderson accounting firm was destroyed in the aftermath.

The film shows how it happened.

To keep its stock price climbing, Enron created good quarterly returns out of thin air. One accounting tactic was called "mark to market," which meant if Enron began a venture that might make $50 million 10 years from now, it could claim the $50 million as current income.

In an astonishing in-house video made for employees, Skilling stars in a skit that satirizes "HFV" accounting, which he explains stands for "Hypothetical Future Value." Little did employees suspect that was more or less what the company was counting on.

Skilling and Lay were less than circumspect at times. When a New York market analyst questions Enron's profit and loss statements during a conference call, Skilling can't answer and calls him an "a-hole;" that causes bad buzz on the street. During a Q&A session with employees, Lay actually reads this question from the floor: "Are you on crack? If you are that might explain a lot of things. If you aren't, maybe you should be."

The documentary is based on the best-selling book of the same title, co-written by Fortune magazine's Bethany McLean and Peter Elkind.

The most shocking material in the film involves the fact that Enron cynically and knowingly created the phony California energy crisis. There was never a shortage of power in California. Using tape recordings of Enron traders on the phone with California power plants, the film chillingly overhears them asking plant managers to "get a little creative" in shutting down plants for "repairs."

Between 30 percent and 50 percent of California's energy industry was shut down by Enron a great deal of the time, and up to 76 percent at one point, as the company drove the price of electricity higher by nine times.

As the company goes belly up, 20,000 employees are fired. Their pensions are gone, their stock worthless. The usual widows and orphans are victimized. A power company lineman in Portland, who worked for the same utility all his life, observes that his retirement fund was worth $248,000 before Enron bought the utility and looted it, investing its retirement funds in Enron stock. Now, he says, his retirement fund is worth about $1,200.

Strange, that there has not been more anger over the Enron scandals. The cost was incalculable, not only in lives lost during the power crisis, but in treasure: The state of California is suing for $6 billion in refunds for energy overcharges collected during the phony crisis.

Yet the crisis, made possible because of deregulation engineered by Enron's lobbyists, is still being blamed on "too much regulation."

If there was ever a corporation that needed more regulation, that corporation was Enron."

Enron is not just a crime story.

It is a metaphor of the age.

It is a tale of the greed and corruption that permeates Corporate Culture.

Ken Lay's former best pals are the POTUS and Daddy POTUS.

That's why they call him Kenny Boy.

These guys are not the exception.

They are the norm.

And we have been led down to the altar of the almighty market.

To find that our Priests have betrayed our confidence.

And that we may all be their altar boys.

This movie makes you mad.

And it should.



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