This operation was later decommissioned and about one billion U.S. Managers were pushing this course and silvered after their stock options in a process they called " pump up and throw it away " ("pump and dump " ) called.Įnron is also launching a massive PR campaign in which the company presented although their global operations poorly developed as a profitable and stable.Ī huge miscalculation was the construction of the " Dabhol Power Plant", a power producer in India. While in the stock market through the Internet bubble prices increased, Enron tried to deceive the analyst by reaching the quarter goals. Pai bought with his money, a large ranch in Colorado and was the second largest landowner in the state. Regardless of the amount of such sum, the once rich Pai, made the subsidiary, which he directed, a loss of a billion dollars - a fact that was covered by Enron. Pai sold his shares for $ 250 million left after surprising the company.
Pai was known that he regularly paid with corporate funds visits to strip clubs and allegedly even invited strippers to his office. Clifford Baxter, a manager who was known as manic-depressive, and Lou Pai, CEO of Enron Energy Services. They were known internally as " the guys with the spikes. Skilling presented a so-called " lieutenants " who expressed through the implementation of its instructions in the company. This led to a strong competitive spirit within the company and an extremely poor working atmosphere. This had the requirement to dismiss 15 % of employees each year.įor this purpose, we classified the employees about their performance, and then fired the weakest, which were deemed insufficient for the achievement of corporate goals. The film describes in minute detail how Skilling Enron imposing his Social Darwinist viewpoint of corporate governance when he instituted an in-house review committee. This Enron could subjectively give the impression to be a highly profitable venture. Thus, expected long-term income were reported immediately after conclusion of the contract as existing revenue, debt appeared in the books as assets, and investments in tangible projects were valuable supposedly out already before they were ever realized. He wanted to buy natural gas as a share similar product and sell.īut most importantly, he made sure that certain projects in the balance sheet were rated higher new and especially ( "Mark to market" ). Kenneth Lay then set a new one CEO, Jeffrey Skilling, who saw to it that Enron went from being an energy producer to a company that in the commodity markets with energy, especially natural gas, acted like a stockbroker. "Īfter it emerged that Enron's reserves were put at risk by this procedure and the company was on the brink of ruin, the staff were including Louis Borget dismissed and sentenced to prison for embezzlement.Īlthough he was aware of the extremely risky business, Kenneth Lay denied any involvement in the scandal. In addition, it is reported that Enron's CEO, Louis Borget, corporate funds diverted to an offshore financial center.Īs in an audit these machinations were not revealed, Kenneth Lay encouraged his employees " to rake in billions more. Just two years after the founding of Enron was involved in a scandal when graduating two securities dealers with company funds risky transactions in the oil market. The film won the Independent Spirit Awards 2006 for Best Documentary and was nominated for the 2006 Oscar.Īgainst the background of the hearing will be conducted later career and the scandals of Kenneth Lay, who founded Enron in 1985, pointed out. It includes interviews with the authors McLean and Elkind, with former Enron executives Enron brokers, analysts, journalists, former California Governor Gray Davis, and contains proprietary recordings of staff meetings as well as original recordings of the hearings after the bankruptcy. The film deals with the collapse, which was caused by extensive accounting fraud of the responsible manager.Īlso, the film shows the involvement of the company in the California electricity crisis. energy giant Enron and led in 2001 one of the largest bankruptcies in economic history brought that destroyed over 20,000 jobs and, among others, the staff pension fund over two billion dollars. In 2008, the original DVD was released with German subtitles.ĭue to consistent accounting fraud to enrich the managers in charge of U.S. The documentary, released in 2005 based on a book by Bethany McLean and Peter Elkind.īoth are in the credits of the film as authors mentioned together with director Alex Gibney. Enron - The Smartest Guys in the Room is a documentary about one of the biggest bankruptcies of U.S.