Film About Enron’s Collapse Opens Up Wounds in Houston
On the movie poster for a new documentary on Enron Corp.’s financial scandal is the tagline: “It’s just business.” But in these parts, it’s personal.
You can’t swing a dead cat in Houston without hitting someone in the energy industry.
Since “Enron: The Smartest Guys in the Room” opened last month at the River Oaks Landmark Theatre, crowds have flocked to the documentary chronicling the 2001 meltdown of a pillar of Houston’s energy business that was once ranked by Fortune magazine as the nation’s seventh-largest corporation.
“It was everyone’s scandal,” 70-year-old retiree Barbara Hornbeck said after attending a matinee. “Everyone knows somebody in the industry.”
During its opening week, the film grossed $30,000, more than it did at either of two New York City theaters where it also premiered, said Rob Arcos, city manager for Landmark Theatres.
“It’s got people talking,” said John Smaistrla, general manager of La Griglia, the upscale Italian restaurant that was once a favorite of top Enron executives. “There’s no comfort level. They’re still upset about Enron, and this movie just regenerates those feelings.”
People here have good reason to be bitter. Nearly 6,000 employees’ lives were thrown into chaos when it was discovered that executives at the energy trader were cooking the books.
Workers lost their jobs, retirement savings and health insurance. Resumes were stained with a name that embodied scandal. Small businesses that supplied Enron were abruptly left hanging.
“We all lost money in it,” said Jim Walker, owner of Earth Color Houston, which printed Enron’s annual reports. “I have friends who lost money in it. It’s part of our community.”
“Enron” is refocusing attention here on the accountability of the company’s three top former executives -- Chairman Kenneth L. Lay, Chief Executive Jeffrey K. Skilling and Chief Financial Officer Andrew S. Fastow. Lay and Skilling are scheduled to go on trial on criminal fraud charges in January; Fastow agreed to cooperate with officials in exchange for a 10-year prison sentence. He also will pay nearly $30 million in restitution.
All three men are featured like movie stars on a blue banner hanging from the River Oaks marquee. For Lay it’s an especially dubious honor -- he once was an elite member of Houston’s business community, a benefactor to its arts and a close friend of President Bush. The year before Enron collapsed Lay cashed in stock and options worth $123 million.
Now Lay is one of the nation’s most recognized faces of alleged corporate fraud and excess. At the film’s premiere last month, attendees were handed paper Lay masks to wear.
Attorneys for Lay and Skilling said the film was loose with the facts.
“It’s a caricature,” said Lay’s attorney, Michael Ramsey. “Houston’s a lot closer to the Enron story than anywhere else, so I would expect more people would go see it than in Dubuque. But that also makes me very anxious about a movie that obviously is not founded on truth. They’re contaminating a jury pool.”
Ramsey cited as an example the filmed testimonial that Enron employees were barred from accessing their 401(k) retirement funds while the company tumbled toward bankruptcy. A lineman from Portland General Electric, a company acquired by Enron in 1997, said his retirement fund of more than $300,000 was reduced to $1,200 by the time he could get to it.
“That’s just not true,” Ramsey said. “It is a lie.”
Skilling’s attorney, Daniel Petrocelli, said his client had not seen the movie but worries that prospective jurors will be influenced.
“It’s false, fictional and a real disservice to all the people who worked at Enron,” Petrocelli said.
The film is reopening other wounds. During a question-and-answer session with the filmmakers after a screening for ex-Enron employees, Carol Baxter, widow of the former Enron Vice Chairman J. Clifford Baxter, who committed suicide in 2002, challenged her husband’s portrayal as manic-depressive. She said he had never been diagnosed with the disorder.
But “Enron” is mostly drawing praise from critics. It was nominated for the Grand Jury Prize at this year’s Sundance Film Festival. The film was funded by HDNet Films and distributed by Magnolia Pictures, both owned by Dallas Mavericks owner Mark Cuban and partner Todd Wagner. They also own the Landmark chain.
The film is directed by Alex Gibney, whose past works include the Emmy-nominated “The Soul of a Man,” and was produced in association with Fortune based on a book by reporters Bethany McLean and Peter Elkind.
“Enron” is now playing on 126 screens nationwide, and continues to do such a bang-up business at the 500-seat River Oaks that the owners plan to extend its run until at least August. The theater is in one of Houston’s most expensive enclaves, known for enormous chalets and fastidiously landscaped grounds.
It’s just the kind of neighborhood where Enron’s elite lived during the company’s halcyon days. Indeed, one recent afternoon the theater’s manager and an employee spied Skilling at a nearby Starbucks. Theater employee Josh Trotter approached Skilling, asking him to autograph an “Enron” poster.
He politely declined.
