California is fairly unique in that it burns more energy in the summertime than the winter, so it was pretty strange goings in the Sunshine State when it was plunged into darkness in January 2000 through rolling black-outs. The reason for this would be the infamous Enron Corporation, the final desperate and greedy actions of one of the world’s biggest companies to keep that illusion alive, before its sensational and unprecedented collapse in 2001 to the then world’s biggest corporate fraud., but Mr Madoff recently topping it. Three weeks after 911, a company that had built up a $60 billion dollar business in ten years was gone in just 24 hours, a vulgar fraud cynically allowed to flourish to make a lot of important people a lot of money across the US business spectrum for most of the late nineties. After seeing this the recent financial meltdown was no suprise.

This excellent and informative documentary takes us through the history of the company. From its early days in Texas, the Bush family influence at the heart of its early success, to its eventual implosion, Dubya not helping out his biggest campaign contributor in Chairman Ken Lay (when he really needed the new president’s influence, most say he had bought) let him hang, Bush only moral decision so far in his presidency. Not only does this intelligent and alarming documentary explore its founders close ties to America’s most powerful family but how the countries biggest and respected business community in Manhattan kept the fraud going, regardless of the risk to the man on the street, milking it until the last possible moment. You know it’s a shame Bush Junior cant be lead away in handcuffs for his more devastating corruption in Iraq like the top executives of Enron eventually were on live TV for this.

The story…

In 1989 the chairman of the fledgling Enron energy company-the said Ken Lay, the Bill Gates of the energy sector-had been involved in the perpetration of the exact same fraud some12 years earlier that would finally collapse his energy giant in 2001, but fortunately nipped in the bud by people who were honorable and prepared to act back in 1989. Fake joke companies called ‘M Yass (My Ass)’ were obvious signs that things weren’t right in the late 80s, humor he would duplicate in his later fraud by using Star Wars characters to name phantom companies to hide catastrophic debt in the late nineties. Unfortunately, back in 89 at the trail no one went to jail for long enough and Lay and Enron were allowed to keep trading to do it all over again. In once such criminal act they took over a state energy company in 1999, purely to rifle their pension funds, leaving 4000 public sector power workers with next to nothing, just 6 months after Enron bough them.

The arrival of Jeff Skilling to the potent mix in the early nineties would galvanize the company; he and his geeky mates would introduce energy trading to the US market to make Enron huge sums. By changing the way domestic gas and electricity was traded in the nineties the biggest energy companies would be able to manipulate the price (sound familiar!), resulting in California’s infinite crash, costing the state 13 billion dollars of public money. At the peak of the crisis a loop-hole allowed Enron traders to send one third of Los Angeles power into a desert ghost town hut (one you see in Westerns), casing the price to spike, so the desperate Governor off California had to pay impossible amounts for each thermo to get the lights back on in his beleaguered state. It was the classic supply and demand con. Take it away and then let the price rocket and sell it back. Listening into tape conscripts during the documentary you could hear the traders sneering as the price rocketed with their personal profits, whilst L.A was in darkness and people were dying.

“What’s the difference between the Titanic and Enron?”
“At least the Titanic went down with its lights on”.

The real crime here was when the company was ready to collapse like a house of cards, the top guys-known as the smartest people in the room-still trying to hype the share price and telling the employees to buy stock to support the company, then cashing in millions of dollars just before the game was up and the whistle blower stepped in to stop the slaughter of its employees lives. One top manager walked away with $123 million dollars and has never been charged. It’s also noticeable that all through this saga its women that blew the whistle on the predominantly male fraud.

We learn the narrative that the whole company was built on hype and false accounting. The green light for Lay to commit the same type of fraud as he allegedly did in the 80s was to get ‘mark to mark’ accounting status. This is when the big companies are allowed to book ‘predicted’ profits from day one on what they think they will make from a deal in five to ten years time, no guarantees needed to be given or documented that those business ventures can ever generate the predicted and expected revenue, but boosting stock prices there and then. A national broadband venture was one such ploy, Lay and Skillet predicting huge profits that never materialized, bumping the stock price by 30%, practically overnight.

Enron’s skill was to constantly hype up its image and so share price as the company itself was hemorrhaging money on the sly, no one brave enough to check the books. Lay and co would make up false companies to hide the millions of debt as the share price would rise on good press and corrupt accounting alone, accounting that would see the downfall of America’s most respected book keepers of Anderson Consulting. Instead of selling shares to clear the debt they just kept hyping the price and investing it in new projects to show they had cash streams, pocketing the rest. When one plucky journalist confronted Skillet and asked him directly:” how do you make your money’? And if you don’t tell me then I will run my thoughts on it in an article in Fortune Magazine, the threats began. But she was right. At this point they were 30 Billion in debt. Ironically the company’s motto was ‘Ask Why!’

The film points out that its greed that bought down Enron, Americas top banks, accountants, lawyers and analyst, all paid millions to go along with the hype, all standing back and taking the money instead of stopping Enron when they all knew something was up. Independent Analyst were paid big sums for favorable reports to boost the share price, attorneys and accountants turning a blind eye, in return paid double. For ten years this was allowed to happen, the financial institute’s regulatory bodies sitting back and also avoiding their responsibilities. If it was blatantly going on at Enron then it’s going on everywhere else.

The whole Enron ethos was greed and back-stabbing. They operated a ‘Rank and Yank’ policy with their employees, each worker allowed to vote on their subordinate’s performance, marking them between one and five over the year. The bottom 10% would automatically be ruthlessly fired in January from those results.

Director of the movie in Alex Gilbey compares the way the company was run with the infamous “Milligram Experiment”. That was the one where students and volunteers were told to give increasing amounts of voltage to other volunteers (actors for the experiment) behind a screen. If the actors got questions wrong under duress, men in white coats instructed the unwitting volunteers to press the button and deliver the voltage, regardless. Because they were told to do what they did and not left to make their own call, 50% would theoretically deliver enough voltage to eventually kill the person wired up. That was the Enron way, responsibility taken away because mistakes were buried, just like bad doctors do. But who has ever heard of bad doctor.

SPECIAL FEATURES
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-AUDIO COMMENTARY by Director Alex Gilbey

I think I learnt enough from the movie and let it be.

-DELTED SCENES-

More extended than deleted.

-MAKING OFF-

Straight forward talking heads.

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90 minutes Run time
ANy 5 films for 5 nights for £5 at Blockies
Imdb.com scores it 7.1 out of 10 (2,398 votes)
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Summary: Big business and corruption..