We are told Arthur Andersen reportedly received $1 million a week for their external auditing. As the well-established accounting firm Arthur Andersen sanctioned this practice, no one seemed to inquire too deeply. The company could effectively make any assumption it chose about projected earnings. Hypothetical future value, the basis of mark to market (mtm) accounting, the documentary’s voice-over explains, gave Enron total freedom in grossly misleading their stock-holders. Unfortunately Skilling’s creative business instincts, fostered by Lay’s seeming disregard for anything but the appearance of accruing dollars, paved the way for Skilling’s implementation of a valuation system christened “hypothetical future value”. You can't help but wonder what the outcome for Enron may have been if Skilling had not lost his original vision - if he had not been sucked into what appeared the easier option of diddling figures to create wealth and prestige, and instead attempted to make real progress by implementing his innovative (real) ideas. He created the business of trading oil and natural gas at a time when US government deregulations were kicking in. Skilling was a very bright spark, and quite probably a man destined for great things. Succeeding Borget (whose greed actually did come back to bite him with Lay pleading ignorance of Borget's activities at the trial), Jeff Skilling was brought into Enron as CEO. The precedent to reward criminal activity was set. He actually upped Borget’s trading budget. After discovering the company’s most profitable oil trader at that time, Louis Borget, had stolen US$3 million from Enron, Mr Lay overlooked the criminal activity, because he believed the massive profits made far out-weighed the theft.
ENRON THE SMARTEST GUYS IN THE ROOM WATCH ONLINE FULL
What could have been a great and innovative enterprise sadly turned into a black box full of manipulated numbers.Īs far back as 1987, founder Ken Lay was encouraging malpractice. This was the road to rewards "the Enron way". One of the many sad things shown in this documentary is how so many really bright people not only failed to realise their potential, but worse, regressed into ignorant liars and cheats. In its wake tens of thousands of lives were ruined. Enron went from being the seventh largest corporation in the United States, with assets estimated at just under US$70 billion, to being worth next to nothing by the end of 2001. It is a revelation of massive fraud, and the deceit that would eventually become the lifeblood of Enron. Film-maker Alex Gibney takes us through the history of Enron’s internal corruption and its outward spread.