Analysis Of The Movie The Smarted Guys - 1584 Words

Ethics Paper OBHR 330 Jayson Havill The history of Enron is described in detail in the film â€Å"The Smarted Guys in the Room†. According to the film, Enron was founded by Kenneth Lay in 1985, functioning originally as a producer and supplier of natural gas. Enron built and operated power plants and pipelines all over the United States. The company’s wealth expanded quickly due to marketing, promotional strategies and stock price. One of the important aspects noted in the film was Lay’s relationship with the Bush family. This will be described in detail later on and becomes a crucial piece of information during the California energy scandal. Enron’s traders were involved in a scandal early on in the company’s history involving the misappropriation of money and oil betting, this became known as the Valhalla scandal. Lay encouraged traders to continue these activities until the company was near bankrupt and finally the top traders involved were fired and convicted. When Jeffrey Skilling was hired, the company started using mark-to-market accounting which allowed the company to record potential profits and giving the appearance that the company is extremely profitable even when it isn’t. Enron continuously created deals and new projects to increase potential profits for the company and never actually making any money in the process. Skilling’s best idea was to turn Enron into a stock market for natural gas. Enron began to move towards trade of energy rather