Enron: The Smartest Guys in the Room
Enron The Smartest Guys in the Room is a 2005 American documentary film based on the bestselling 2003 book of the same name by Fortune reporters Bethany McLean and Peter Elkind, a study of one of the largest business scandals in American history. McLean and Elkind are credited as writers of the film alongside the director, Alex Gibney.
The film begins with a profile of Kenneth Lay, who founded Enron in 1985. Two years after its founding, the company becomes embroiled in scandal after two traders begin betting on the oil markets, resulting in suspiciously consistent profits. One of the traders, Louis Borget, is also discovered to be diverting company money to offshore accounts. After auditors uncover their schemes, Lay encourages them to keep making us millions. However, the traders are fired after it is revealed that they gambled away Enrons reserves the company is narrowly saved from bankruptcy by the timely intervention of executive Mike Muckleroy, who managed to bluff the market long enough to recover Borgets trading losses and prevent a margin call. After these facts are brought to light, Lay denies having any knowledge of wrongdoing.Lay hires Jeffrey Skilling, a visionary who joins Enron on the condition that they utilize marktomarket accounting, allowing the company to record potential profits on certain projects immediately after contracts were signed, regardless of the actual profits that the deal would generate. This gives Enron the ability to subjectively give the appearance of being a profitable company even if it isnt. With the vision of transforming Enron from an energy supplier to an energy trader, Skilling imposes his interpretation of Darwinian worldview on Enron by establishing a review committee that grades employees and annually fires the bottom fifteen percent, a process nicknamed within the company as rank and yank. This creates a highly competitive and brutal working environment. Skilling hires lieutenants who enforce his directives inside Enron, known as the guys with spikes. They include J. Clifford Baxter, an intelligent but manicdepressive executive and Lou Pai, the CEO of Enron Energy Services, who is notorious for using shareholder money to feed his obsessive habit of visiting strip clubs. Pai abruptly resigns from EES with 250 million, soon after selling his stock. De
Source: Wikipedia