When Enron collapsed, top executives of the company walked away with hundreds of millions of dollars while stockholders -- including employees with large amounts of their life savings tied up in Enron stock -- absorbed devastating losses. The U.S. Justice Department has been investigating criminal behavior on the part of top Enron executives -- several of whom have been convicted and sentenced to lengthy prison terms.
The nation's financial media has provided a running account of the misery caused by one of the largest corporate scandals in U.S. history. "Enron: The Smartest Guys in the Room" is based on the book of the same name by Fortune reporters Bethany McLean and Peter Elkind.
Gibney -- whose writing, directing and producing credits include "The Trials of Henry Kissinger" and the PBS miniseries "The Blues" -- undertook the project because he was amazed at the extent to which journalists, stock analysts and others who earn their livings explaining the financial world to the rest of us blew it on Enron -- buying the deception that Enron executives such as Kenneth Lay, Jeffery Skilling and Andrew Fastow perpetrated on the public.
By the time Gibney started screening the picture for audiences, the public had a fair idea what had gone on at the company's headquarters in Houston.
At a screening in Austin, Gibney said the audience howled when they saw footage of Skilling getting a pie in the face at a public appearance.
"There was about a 30-second ovation," he said. "You couldn't hear anything for the next 30 seconds."
The mood was somewhat different Sunday night at the Directors Guild of America in Los Angeles, where the movie was screened for a Hollywood crowd that included Warren Beatty, Annette Bening, director William Friedkin, former Paramount Pictures head Sherry Lansing and former California Gov. Gray Davis -- who lost his job in a recall election largely because of fallout from the energy shock caused by the Enron scandal.
The film includes extensive sound bites taken from audio recordings of Enron traders laughing it up as they manipulate the energy market in California -- a stunt that cost the state billions of dollars even as California was battling a series of wildfires.
"There is a certain black humor to the sound bites, that gets laughs in other parts of the country," said Gibney. "There were a lot fewer laughs in the audience last night. The people here felt it more acutely."
Gibney said the differing audience reactions to what Enron did in California seemed to underscore an attitude that has been described in other parts of the United States -- that California might as well be another world.
"I think people always look with a sense of envy and resentment at California," he said. "It's 'the frontier meets the front lawn.' I think the initial reaction when this was happening to California was to just say, 'Well, California screwed up. Those wacky Californians don't know how to keep the lights on."
However, Gibney's film makes clear that by the time Enron traders were gouging California in 2000 and 2001, the company was desperate for earnings.
"If the success of your company is based on the idea that the whole country should deregulate," he said, "why would you try to screw your customers? They couldn't help it. They needed the revenue."
Born in New York and raised in Boston, Gibney said he deliberately made the movie to get an emotional reaction from viewers.
"By the time you get to California you should be properly angry," he said. "You get people laughing as the state is going up in flames, literally. The surprise is that people's blood hasn't boiled more."
At a running time of just under two hours, "Enron: The Smartest Guys in the Room" omits some of the more thoroughly chronicled disgraces associated with the Enron scandal -- but Gibney said that was unavoidable.
"There's only so much perfidy and corruption you can put into two hours," he said.
The movie was produced by HDNet Films, a division of 2929 Entertainment -- founded by Todd Wagner and NBA Dallas Mavericks owner Mark Cuban. It is being distributed by 2929-owned Magnolia Pictures.
Gibney said Cuban backed the project from start to finish.
"It was the fastest green light I've ever gotten," he said. "Late in the process, Ken Lay's attorneys raised questions with (Cuban), and he was entirely supportive of me."
"Enron: The Smartest Guys in the Room" -- an official selection at the 2005 Sundance and South By Southwest film festivals -- is scheduled to be released theatrically in New York and Houston on April 22. Magnolia Pictures plans a national rollout for the film following an April 29 opening in Los Angeles.
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