Enron: The Smartest Guys in the Room - The movie

[NNN0LHI]

http://rogerebert.suntimes.com/apps/pbcs.dll/article?AID=/20050428/REVIEWS/50413004

This is not a political documentary. It is a crime story. No matter what your politics, "Enron: The Smartest Guys in the Room" will make you mad. It tells the story of how Enron rose to become the seventh largest corporation in America with what was essentially a Ponzi scheme, and in its last days looted the retirement funds of its employees to buy a little more time.

There is a general impression that Enron was a good corporation that went bad. The movie argues that it was a con game almost from the start. It was "the best energy company in the world," according to its top executives Kenneth Lay and Jeffrey Skilling. At the time they made that claim, they must have known that the company was bankrupt, had been worthless for years, had inflated its profits and concealed its losses through bookkeeping practices so corrupt that the venerable Arthur Anderson accounting firm was destroyed in the aftermath.

The film shows how it happened. To keep its stock price climbing, Enron created good quarterly returns out of thin air. One accounting tactic was called "mark to market," which meant if Enron began a venture that might make $50 million 10 years from now, it could claim the $50 million as current income. In an astonishing in-house video made for employees, Skilling stars in a skit that satirizes "HFV" accounting, which he explains stands for "Hypothetical Future Value." Little did employees suspect that was more or less what the company was counting on. snip

One Enron tactic was to create phony offshore corporate shells and move their losses to those companies, which were off the books. We're shown a schematic diagram tracing the movement of debt to such Enron entities. Two of the companies are named "M. Smart" and "M. Yass." These "companies" were named with a reckless hubris: One stood for "Maxwell Smart" and the other one ... well, take out the period and put a space between "y" and "a."

more

[glitch]

1. Now this is my kind of movie. Of course it would be better if we had

a sequel with Elliot Spitzer (or equivalent) indicting them and their co-conspirators in high office, complete with court trial and sentencing.

But maybe that will come out next year. :)

[warrens]

4. The extra with the DVD, no doubt

I can't wait to see those two scumbags in jumpsuits. The kind with a button up flap on the back, ifn you know what I mean.

[candy]

2. It's at my neighborhood theater now! Can't wait to see it.

[EC]

3. And this is what our nations bookkeeping is becoming

made up....


I thought this was an interesting point:
Strange, that there has not been more anger over the Enron scandals. The cost was incalculable, not only in lives lost during the power crisis, but in treasure: The state of California is suing for $6 billion in refunds for energy overcharges collected during the phony crisis. If the crisis had been created by Al Qaeda, if terrorists had shut down half of California's power plants, consider how we would regard these same events. Yet the crisis, made possible because of deregulation engineered by Enron's lobbyists, is still being blamed on "too much regulation." If there was ever a corporation that needed more regulation, that corporation was Enron.




I think most Americans think this doesn't affect them, just like when Neil Bush stole from the S&L, they didn't know how it affects their lives, being the taxpayers footed the loss...

[noiretextatique]

5. Sarbanes Oxley notwithstanding

i am an accountant currently working for a publicly held corporation. i cannot beging to describe how screwed up this company is, but to give you a hint, the controller (a pathetic buffoon), calls debits and credits "goesinta and goesouta" :eyes:
their records are non-existent (literally) and they have been late with all their required reporting and filings...from payroll to county property taxes...and everything in between. they've racked up hundreds of thousands of dollars in penalties, simply because no bother to file the required forms. the controller has gotten away with blaming all of his underlings, hence my contract here.
did i mention that the accounting system is a complete disaster?
they are being audited as we speak, and if this controller manages to keep his job after the audit, i will know the auditors didn't do their job.
in fairness, i have worked for some companies who take compliance very seriously, however i am certain there are many, many companies run just like this one out there. and then there was enron...