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Title

Enron: the Smartest Guys in the Room

Review

I took a class in Business Law a few years ago. My professor thought ethics was so important it was the first thing he covered. To kick things off, we watched the documentary Enron: the Smartest Guys in the Room, based on the book by Peter Elkind and Bethany McLean. I was well into adulthood when the Enron scandal broke in 2001, but because they were on the other end of the state and I didn’t do any business with them that I was aware of, I didn’t pay much attention at the time. It was impossible to ignore complete, however. It was really big news.

A couple of headlines in the New York Times from 2001:

  • January 23: "Enron Earnings Up 34% in 4th Quarter [2001]"
  • January 24: "Bush Adds 2 Weeks to Orders Ensuring California Power: But No More Extensions; State is Warned That it Must Line Up Enough Electricity on its Own After Feb. 7"

These headlines seem unrelated, but the documentary shows that not only are they related, but in the aftermath, also just how ridiculous they both are, and how neither ever should have happened.

I had been aware that the Enron meltdown had to do with “cooking the books,” according to the buzzphrase going around at the time. But evidently, there was even more involved. The company had become so enamored of its own power that it began tinkering with the power supply, causing the rolling blackouts in California that were initially blamed on excess consumption. California was forced to purchase more power from neighboring states, which contributed to the budget woes that eventually helped force the governor out of office.

The effects of the Enron scandal were widespread. This documentary describes in vivid detail how Enron employees contributed to the problem and what was done in the aftermath to prevent this sort of disaster in the future. And it follows the trials of the company leaders as they faced criminal charges for their actions. If you want to understand the world of finance, watching this documentary breaks it down into nail-biting details. It will help you fully understand why there are so many confusing accounting rules. Most of all, it’s an excellent demonstration of what happens when professional ethics are allowed to take a back seat to making money. ~ Jana Atkins

Review Date

Reviewed May 2014