Thieves like them

One simple question: How exactly are you making your money?" When a FORTUNE magazine reporter dared to ask that of Enron's president Kenneth Lay, it was enough to puncture a huge corporation's stock market balloon. For a decade, the Texas energy company had been posting unbelievably high earnings and nobody, from Wall Street to Washington, D.C., seemed to want to question the numbers. Now a new documentary, Enron: The Smartest Guys in the Room, takes a clear look at a financial rise and crash that is still unraveling in court.

Based on the best-selling book by FORTUNE writers Peter Elkind and Bethany McLean (who asked that daring question in 2001), the documentary is the latest in a line of slick, savvy movies, like Fahrenheit 9/11 and The Corporation, that examine American business, politics and social affairs. Director Alex Gibney, who made 2002's The Trials of Henry Kissinger, was at first daunted by the idea of tackling such a complex subject.

"The Enron way of dealing with questions like Bethany's was to make you feel foolish," Gibney says. "Arrogance. That was part of their masquerade; hence the film's title. But if you know how to balance your checkbook, you can grasp what was going wrong at this company." When Enron collapsed under an avalanche of debt, ill-conceived deals and fraudulent accounting, thousands lost their investments and pensions. Top executives made out like bandits.

Fortunately for Gibney, the image-conscious corporation had filmed, videotaped, audiotaped and photographed it all. "Enron spent a lot of time and money creating and burnishing the grand illusion," the filmmaker says. "We licensed photos of executives standing like titans, always shot from low angles, standing there like Jimmy Cagney in White Heat: 'Made it, Ma! Top o' the world!'"

Most damning, though, are the supposedly humorous skits in which former CEO Jeff Skilling mocks the company's sketchy "mark to market" accounting method. When the bottom fell out, cameras capture a morale-building "town meeting" with employees, at which the first query to Lay is, "Are you on crack? And if you're not, maybe you should be."

Gibney, who calls the film "an ethical report card" on cutthroat corporate culture, hopes the courts will deal fairly with Lay and Skilling, who are scheduled for trial next year. He hopes that Lay will, in addition to repaying ill-gotten gains, serve "a ten-year stint being a grill man at a downtown McDonald's, living in public housing, riding public transport": A symbolic punishment, he says, for someone who had so lost touch with "the reality of money."