The Smartest Film at Sundance

Alex Gibney tells the story of Enron's rise and fall -- and you won't need an economics degree to understand it

Please don't misunderstand: Alex Gibney has no great beef with capitalism. Indeed, many of his best friends back in Summit, New Jersey, are investment bankers. But when Gibney looks at the prodigious rise and precipitous fall of Enron in Enron: The Smartest Guys in the Room, the remarkable documentary that premiered January 22 at the Sundance Film Festival, the award-winning filmmaker sees the collateral damage of an economic system dangerously out of whack. And when he looks at Ken Lay and Jeff Skilling, the former Enron executives now charged with perpetrating egregious fraud and deception during their stewardship of the now-bankrupt company, Gibney sees the lead players in a worst-case scenario that eventually could undermine capitalism itself.

Midway through the recent Sundance festivities in Park City, Utah, Gibney popped into a trendy eatery on Main Street, the main drag of this faux-rustic ski resort, to promote his film. Magnolia Pictures, the distributor of Control Roomand Capturing the Friedmans, has Enron tentatively scheduled for a 2005 theatrical run. And yet, speaking in a quietly impassioned tone, Gibney insisted that when it comes to hard-sell tactics, he's a rank amateur compared to his "stars."

During their Enron heyday, Gibney said, "Ken Lay and Jeff Skilling saw themselves as being the apostles for the purest possible form of capitalism. All the markets were going to be open. They were going to be ruthless inside the company, and ruthless outside the company, because that was going to make everything more efficient.

"But I think that for everybody else who's in business, they would look at these guys and think they're capitalism's worst nightmare. Because if capitalism works like this, there are going to be some winners, but there also are going to be a lot of losers. And sooner or later, those losers are going to get very, very angry."

Thousands of Enron employees and investors lost untold millions of dollars when the company, once America's seventh largest, collapsed in 2001. But even after all the congressional investigations, criminal indictments, plea bargains and made-for-TV docudramas, the "Enron tragedy" (to use Gibney's term) defies comprehension. All this talk about negative cash flow, document shredding, deregulated markets, mark-to-market accounting -- it's enough to make your head swim.

The beautiful part of Enron: The Smartest Guys in the Room is that, to a degree unrivaled by almost any other account, the movie manages to clarify the issues. To be sure, some might complain Gibney's narrative is a tad too facile, with rapid-fire intercutting of speculation, stock footage and sometimes jokey imagery, all linked by pop tunes. Gibney does to Enron's disgraced management what Michael Moore did to the Bush administration in Fahrenheit 9/11. But Gibney makes no apologies for using flashy style to illuminate substance.

"Someone asked me how I'd explain what happened at Enron to my nine-year-old daughter," Gibney said. "I guess to a nine-year-old, I would say, 'They took money that wasn't theirs…They lost people jobs and a lot of money. And they lied to people in a way that had terrible consequences.' "

For grown-ups, Gibney has painted a more comprehensive picture. Using additional reporting on the latest revelations and indictments, C-SPAN coverage and newly filmed interviews, he cleverly expands on his chief source, The Smartest Guys in the Room, a 2003 best-seller by Fortunemagazine reporters Bethany McLean and Peter Elkind. Gibney spent five weeks in Houston while producing Enron in 2004. Interview subjects include whistle-blower Sherron Watkins; Gibney offered Lay and Skilling a chance to appear, but, it's not surprising, they declined.

Which is not to say they are absent from the movie. Actually, they qualify as above-the-title lead players, thanks to their frequent (and sometimes inadvertently revealing) appearances in news footage, C-SPAN clips, and a treasure trove of corporate audio and video tapes Gibney obtained "from a network of former employees and other interested parties."

"I was stunned when I took a look at this stuff," Gibney said. The videotapes, mostly morale-boosting speeches, presentations and -- no kidding! -- comedy skits designed for employee-only viewing, let the filmmaker tell the story from the inside out. "Instead of having experts talking about Enron, you could let the people at Enron tell the story themselves…[Executives] just made stuff up. They were very skilled at making the Enron story seem so convincing that everyone wanted to believe it."

One of the many darkly comical highlights in Enron is a corporate-approved comedy skit designed to celebrate mark-to-market accounting, which Skilling introduced shortly after being hired in 1990.

"In the stock market," Gibney said, "mark-to-market accounting actually is a conservative kind of accounting. Because at the end of a portfolio on any given day, you mark to market. That is, if you've made $10 million, or lost $10 million, it's reflected in that kind of accounting. So, you know, in that context, it's extremely conservative. And it's valuable for some companies. But what Enron did was just grossly abuse it. They saw a loophole, and so they would just project out, say, 'Ten years down the road, this power plant we're building in India is going to make millions of dollars. So we're going to take that as profit today.'

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