By Owen Gleiberman
Updated April 21, 2005 at 04:00 AM EDT

A good scandal can get your blood up; it has villains and victims, the cleansing fury of injustice made public. Yet there was little righteous or cathartic about the collapse of Enron. To follow the greedy machinations of Kenneth Lay and company was to enter the vortex of a new kind of virtual corruption, with its own universe of fine print. The scandal was a triumph of almost metaphysical obfuscation, which seemed to live on well after the company went bankrupt. The more you learned about Enron, the more it made your head hurt, until your anger shared space with impotence.

The cure for that malaise is Alex Gibney’s Enron: The Smartest Guys in the Room, a deeply straightforward yet beautifully crafted documentary (it’s like a great Frontline episode with hipper music) that turns the vortex inside out, and does it with a thrilling moral clarity. The film invites us to zero in, for instance, on the moment that Enron seems to take the leap from routine go-go bravado to a fearless new dimension of financial insanity: It’s when Jeffrey Skilling, the company’s CEO, pushes ”mark-to-market” accounting — thus booking potential future profits as if they’d already been realized. In a single stroke, Skilling, who resembles an angry Peter Jennings with a touch of a Charles Grodin weasel, appears to make it possible for Enron to declare its profit to be whatever the company wants it to be. The income statement therefore becomes a fiction, one that exists to keep the stock price high. The success of the stock acts as the proof of the company’s glory, which then fuels the stock — a cycle of illusion destined to unravel.

Based on the book by Fortune magazine reporters Bethany McLean (who broke the story) and Peter Elkind, The Smartest Guys in the Room lays bare, in funny and shocking video clips, the culture of arrogance at Enron, a corporation that exploited deregulation to turn the buying and selling of energy into a kind of private casino. It captures how the company was given favorable treatment by the Bush administration, and the bigger picture of how its fraudulence emerged from — and depended on — the speculative mania of the dotcom era. By the time Enron is shutting down electricity plants, exploiting — and perpetuating — the California energy crisis for its own ends (we hear a recording of one trader, during a brush fire, as he says ”Burn, baby, burn!”), you may be sitting there slack-jawed, wondering how they got away with it for so long. Or when it will happen again.