I returned to California again and while scrabbling to find a film I hadn’t seen, watched this documentary about the fall of Enron. (I’ve not seen it reviewed in Empire either, but that’s my fault; they gave it 5 stars. ) Well made, very informative, mixing interview with recorded material from both Enron’s corporate archives and the congressional investigating committees. The failings summed up by the ex-trader who states, the Enron tag line was “ask why?”, I didn’t!, although some people come out of it really well. I wonder if we’ll be talking about Bethany McLean, a Fortune journalist who wrote the first questioning article in the same breath as Woodward & Bernstein. Probably not, because despite the Bush family and the Republicans being obviously entwined with Enron, it won’t bring down the President, although it did contribute to the recall of Schwarzenegger’s predecessor in California. (I certainly wasn’t aware of the impact of Enron and the politics of energy in that episode.)

I suspect its hard to explain “Mark to Market” accounting in a film, or anything short of a term long course in an accountancy or business school, but Bethany McLean followed the money and asked where the revenue was, a simple enough question. The answer was in the manipulated Californian energy market and a corruptly hidden debt mountain.

I had just finished reading a “Management Today” article on the private equity (PE) fund business in Europe, and they asked who pays for the PE companies super-profits and argue that its the banks (or their customers) and the same occurred here. Enron’s profits (when not fraudulently enhanced) were at the expense of the banks and eventually the Enron staff. In the banks case, their actions in support of Enron were where not illegal, sometimes deeply questionable.


Originally posted on my sun/oracle blog, republished here in March 2016

Enron: The smartest guys in the room
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