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Bill Lerach, screen star

A couple of weeks ago I attended an advance screening of the new agit-documentary "Enron: The Smartest Guys in the Room" (overdesigned website here), courtesy of the film's busy publicists. The film, which opened on Friday, derives tritely leftist lessons from the collapse of the Houston-based energy giant, which director Alex Gibney thinks illuminates "the predatory nature of 'business as usual'". Since I don't think Enron's collapse demonstrated any such proposition, it was perhaps inevitable that I would find the film's persuasive efforts coming up short.

Long (too long for most casual viewers, I'd think), slick, and replete with the now-standard array of manipulative techniques perfected by other advocacy documentaries, the film nonetheless didn't get into satisfying detail about the financial/accounting maneuvers Enron used, didn't persuasively sort out the evil from the foolish from the ordinary actors in the saga, and didn't provide credible guidance as to which aspects of Enron's operations will be buried and forgotten with the company and which if any will endure as important innovations (even as the junk bond market lives on long after the Milken scandals). And while we can all agree that events decisively discredited the misbegotten scheme that traveled under the name of electricity deregulation in California, other states deregulated power by way of different rules and got results which were neither disastrous nor unpopular.

Oh, and Lerach. The San Diego class action impresario, who's suing on behalf of shareholders, gets ample screen time to expound his views, which predictably are highly unfavorable toward banks and other deep pockets in the vicinity of the implosion. By the end, I must say, Lerach was actually beginning to come off as a voice of reason and moderation within the framework of the film, compared with other figures who also get pressed into service as on-screen experts, such as (groan) Kevin Phillips and Harvey Rosenfield. Pajama Guy also comments. For more on the Enron legal aftermath generally, Houston-based lawblogger Tom Kirkendall has had extensive ongoing coverage including two good recent posts (first, second) on sentencing in the Nigerian barge case (see also Sept. 20). And Lyle Roberts also devotes a section of his excellent 10b-5 Daily blog to Enron issues.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.