The Smartest Guys on the Movie Screen

I was fortunate enough to get an invite to preview the movie Enron: The Smartest Guys in the Room on Tuesday. There's no simple way to describe the event as a whole, though. One part movie ... that part's easy to understand. But the people milling about in the lobby (many of them former Enron employees) catching up on old times also gave the vibe of a High School reunion. But when the Q&A session started after the movie, it became something completely different alltogether. So this tale comes in three parts:

I.
The place was packed with an assortment of viewers actually ... Enron employees, movie personnel, authors ... and even a few media types (of which, I was counted). I'm sure there's a mere handful of moments where non-media folk will develop a hatred of the media than when they try to find a seat in a crowded theater only to be told that the two prime rows of near-empty seats they're looking at are reserved for the media. Everyone survived just fine, though, as we all got cozy by showtime.

The mood overall was rather positive ... former Enronites happy to see people they hadn't seen in a while, locating a few pleasant surprises that they didn't expect to see at the theater. Like I said, very much akin to a high school reunion. You got the immediate sense that this would not be your average ordinary reunion, though, since the movie was pretty much about the "classmates" in attendance.

II.
This is an impressive movie regardless of how it strikes you. Let's face it, this is a hard story to tell in that medium. It's a business story, it's a numbers story, etc, etc .... The movie attempts to put this in the context of being a people story, and it succeeds at that. The basic underlying question of the movie is "How did the world's biggest bankruptcy happen?" Why? What were the forces at work that led up to it?

On one level, I think it succeeded in highlighting the usual suspects of this story: Lay, Skilling, and Fastow. Each are given adequate depth in documentary form. The story is nearly impossible to tell without ample focus on those three, and the basics are covered: from Lay's malign neglect, to Skilling's hyper-driven focus, to Fastow's amazing ability to look a room full of Merril Lynch bankers in the eye and tell them there's no conflict in his partnership arrangements within Enron. On all the big parts, the movie succeeds.

The only major quarrel I have with any aspect of the movie was when it attempts to dig deeper into the human nature explanations of how Enron can happen. Two elements come close to tapping into this explanation: interviews with the minister of a church on the doorstep of Enron's new building and an historical explanation of a psychological experiment whereby people are convinced to shock an unseen victim until they (hypothetically) die. The lesson from the experiments is that people will basically do bad things if the prevailing surroundings are encouraging of such efforts. But what I took as a disappointing omission from the movie was a more theological point that sin resides in all of us.

This wasn't, in other words, a black and white story about three bad men in a big business. This was a story about a lot of people - the vast majority being fine, upstanding people. But the net sum is well documented: energy traders thinking nothing of shutting off power supply for California and putting people's lives at risk, executives willing to offer bald-faced lies to investment bankers - and Enron employees themselves.

This is where an already difficult story is admittedly even more difficult to tell. Who's the bad guy in all of this? Where's the "black?" There's no easy answers outside of the obvious misdeeds of the major players involved.

To be sure, I'm not sure there's a single best way to tell the story of Enron and come away pleasing everyone. For that, I think the movie deserves some allowance to stand as it is - a movie that may hopefully pique interest in the larger, more complex story. Being based on the book by the same name, there's ample material that had to be left on the cutting room floor.

III.
The Q&A session immediately got off with a resounding alert that this would not be an ordinary "So what was it like working on the film?" session. After the movie itself started on the somber note of reenacting Cliff Baxter's suicide, the first question came from Baxter's widow who wanted to ask author Bethany McLean how she could describe her late husband as manic-depressive when he'd not been diagnosed as such.

No, this was going to be more like HG Bissinger doing a session in Odessa after the release of his book, Friday Night Lights. There was the occassional "Why didn't you include so-and-so in the movie" since many felt that others should shoulder the blame for how Enron went downhill. Naturally, brevity is still the soul of wit. A few questions from Enron people that I thought were insightful to what the prevailing mood seemed to be in the audience (or at least the occassionally loudly articulated view).

One involved an explanation that despite the "Free Market Gospel" of Ken Lay and others in the company, Enron still worked in a heavily regulated environment. The tenor of the question was along the lines of "the downfall (or a portion thereof) is the failing of the remaining overregulation." It's true that there was a dichotomy of Ken Lay's zeal for deregulation while at the same time operating in heavily regulated fields, but Enron's success was predicated on knowing those rules better than anyone else and devising ways to game the system (ie - California energy markets).

One, from a non-Enronite, asked about the views of another book, Conspiracy of Fools, by Kurt Eichenwald. The conclusions of the book, as discussed, seem to be different in a macro-sense, but the tone of the question seems to suggest a belief (shared by others in the room) that this was not a bad thing done by bad people (save maybe for the big three). I mean, who wants their resume to be stamped with a scarlet letter E for the rest of their lives, after all?

And this is where I think the nature of the audience on hand for this was rather unique ... there was some heckling at the movie on points under dispute. There was laughter at some of the ironic portrayals and musical cues. Would a New York audience truly get the irony of Ken Lay's segment leading off with the strains of "Son of a Preacher Man?" I'm guessing not. Would the somber hush of the audience be the same in LA when Cliff Baxter's gun goes off in the car? Again ... probably not. This is a movie that hits home for a lot of people in Houston ... even those only tangentially knowledgable about the story. We lived it in real time.

Aftermath ...
As stated, it's difficult to find enough white knights and black villains in the story. The white knights are especially tough. Was Sherron Watkins a white knight? If you conclude that she was, then why did her actions lead her to Ken Lay instead of the SEC? The Chronicle reporter on hand for the Q&A even told the crowd that on the heels of Watkin's 15 minutes of fame, she openly denied seeing herself as a whistleblower.

If there's one lesson worth taking from the movie, I think it's that the old Enron motto: "Ask Why" ought to be lived up to more often by those with the roles to do just that. Bethany McLean certainly did when her Fortune article on "Is Enron Overpriced?" came out. But there's also the Prudential analyst who asked why and found herself getting replaced on that beat after a complaint by Skilling to Prudential. Asking why will occassionally have a cost attached, and the payoff may never arrive for the individual who asked why. So there's some real risk involved. It's not easy. But it is a necessity. Perhaps the encouraging thing is that in a company where too few asked why the company was anything more than a house of cards, the more hopeful sign is that a mere handful asking why can eventually get to the core of the problem.

The movie opens Friday. Here in Houston, it's at the Landmark theaters. Definitely worth a viewing. However many thumbs I can give up for it, it gets that many. Just go see it and draw your own conclusions.

SIDENOTE: Kuff's DVD screeening is also worth a read and the movie's blog is another handy reference for those interested.