Just finished watching Enron: The Smartest Guys in the Room, and I'm extremely disappointed. Filmaker Alex Gibney completely missed the mark in this adaptation of Peter Elkind and Bethany McLean's book of the same name. What should be a complex dissection of CFO Andy Fastow's financial shenanigans, an unforgiving examination of Jeff Skilling and Ken Lay's dealmaking corporate environment, and a scathing indictment of Wall Street in the bull market of the 90s is instead little more than a dumbed down story of the big company that fell down and went boom.

Gibney inexplicably spends 30 minutes, well over a quarter of the movie, discussing Enron's role in the California electricity crisis of 2000-01. Nevermind that Enron, as Elkind and McLean clearly explain in the book, 1) never broke the letter of the law with their California transactions, 2) was just one of many companies engaged in profiteering during the crisis, and 3) actually made money from these transactions (whereas Enron went bankrupt because it ultimately lost money from other transactions -- most of which are ignored in the film). As if wasting our time with an irrelevant tangent isn't enough, Gibney concludes this segment of the film by implying that Enron is to blame for Arnold Schwarzenegger becoming governor of California.

The film also tries to make much of alleged links between Enron and the Bush family, but as any reader of the book knows that while Ken Lay did little to deny a close tie to each President Bush, in reality his ties were tenuous at best, and in the case of the younger Bush virtually nonexistent.

Oh, and Arthur Andersen is barely mentioned.

The heart of Enron's misconduct was the creation of several partnerships by Fastow designed both to keep Enron's losses off the books and to make millions of dollars for Fastow and his cronies, yet Gibney devotes only about 10 minutes to these schemes. Most of those 10 minutes are consumed by Fastow's own conflict of interest and provide little information on what the partnerships were or why they were illegal. While it's true that descriptions of these special purpose entities are hard to follow (I suffered a lot of headaches while reading about them), their inexplicability was one of the reasons they succeed for so long -- because Wall Street analysts couldn't make enough sense of them to see the frightenting truth.

All in all, it seems Gibney simply wanted to make a movie everybody could watch and understand without actually dealing with the details. To accomplish this he played up the human (Lay and Skilling) and emotional (California and lost pensions) elements while downplaying the financial (everything that mattered). What this leaves is an oversimplified version of events that is nearly as deceptive as the one told by Enron itself.

Read the book.