Have you heard of the Milgram Experiment? (Oddly enough we were talking about this at dinner with a friend last night. Come to dinner. I'll tell you about humanity's proclivity to torture.) The Milgram experiment explores participants willingness to obey an authority figure who asks them to do things against their own conscience. We learn that many many people will obey authority figures to the point that they are literally willing to kill other human beings.
Much like in the Milgram experiment, at Enron, smart people, just doing their jobs, did horrible things. Enron: The Smartest Guys in the Room explores the culture of Enron and the accounting practices, including "mark to market accounting."
I'm not sure I can properly describe how they manipulated the electricity market in California by shutting down power plants, so I'll quote Wikipedia:
California had signed legislation allowing for a free market in energy. As a response to this, Enron created a demand by causing blackouts across the state. Following this the price of electricity sky-rocketed, right in time for Enron to ship back the energy they took out of California back into California, making billions upon billions of dollars in profits. The controllers who were doing this discussed how much energy they had transferred knowing full well that it was going to blackout the cities in California.
Guess why the President Bush didn't help California fight Enron? He's great friends with Ken Lay.