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Marcin Sochacki (Wanted) Blog, Internet, Technology

» Enron: the meanest guys in the room

The title above is a paraphrase of a great documentary movie title: Enron: The Smartest Guys in the Room (2005). I watched the film at least five times and I think it was done really professionally. For those, who have not heard about Enron, I would like to remind that it was about the biggest corporate bankruptcy in the history of the USA, which in 2001 sank not only Enron and its multiple subsidiaries, but also a well known consulting giant Arthur Andersen. Thousands of employees lost their jobs in one day and, what's worse, they also lost their life's savings, which they invested into artificially inflated Enron stock.

While majority of analysts were blind with the apparent Enron's success and inflated their shares price, one of the few people who had a critical view of their financial condition was Bethany McLean, a Fortune journalist. In the aforementioned movie she has shown extreme perfidy and a desperate pursuit of success of the management. In Polish, we have a proverb “the fish starts going bad from its head”, which refers to management (or government) being a bad example for their people because of their actions. We had a situation like that in Enron – the company's brokers became extremely agressive and malicious as well. After the discovery of the scandal and announcing bankruptcy one of the executives, John Clifford Baxter, commited a suicide – presumably because of the responsibility he felt was unbearable. But he was not the main guy responsible for the collapse. Kenneth Lay and Jeffrey Skilling, former presidents of the company found themselves on the defendants' dock in court, in a trial which was bound to last several long years. The former unfortunately didn't hear what penalty the jury prepared for him – died of heart attack soon after the jury announced their verdict (which couldn't be much different from “guilty!”).

Just today the jury announced the verdict for the other one – Jeff Skilling. 24 years in prison and a fine of 45 million dollars. The fine may seem not very high when compared with the damage he has done, but I think the sentence is a reasonable one. Most likely it would be impossible to exact more money, as he had enough time to move the assets out of his account.

Recently, the case of the documentary about smart guys also had an impact on Google, as several days ago a judge ordered to remove its illegal copy from Google Video, which was obviously promptly done. In the meantime, I recommend several excerpts and comments on YouTube. A great parody from Daily Show about the Enron traders phone calls is worth watching too, especially the last part with grandma Millie call:

2006/10/27 01:20 | i_like_it/film/

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