In an unusually bold move in connection with an incredibly difficult case to defend, former Enron chairman and CEO Kenneth Lay is the subject of a wide-ranging interview on the Enron criminal investigation that appears in this NY Times Sunday front page article.
Normally, a defense attorney would never allow a client under scrutiny from multiple grand juries to discuss the subject of those investigations on the front page of the NY Times. However, the Enron case is not normal, and Mr. Lay’s able defense attorneys likely figure that Lay will be indicted and has nothing to lose at this point in attempting to mount a public relations campaign in a probably futile attempt to counter the extraordinarily negative image that anyone related to Enron evokes throughout American society.
Mr. Lay said that he had remained silent on the advice of lawyers, but is coming forward now to explain his views of a story that he says has become infused with myths. While not saying so explicitly, he suggested that he was motivated by a desire to tell his side both to the prosecutors on the Justice Department?s Enron Task Force who have been investigating him and the citizens of Houston who may well sit in judgment on him.
That said, the article is simply astounding given Lay’s current situation:
“If anything, being friends with the Bush family, including the President, has made my situation more difficult,” Mr. Lay said in a recent interview, “because it’s probably a tougher decision not to indict me than to indict me.”
Now, on the eve of what may be the government’s final decision on whether to charge him with a crime, Mr. Lay is talking for the first time about the company’s collapse in 2001 and the scandal that enveloped it. In more than six hours of interviews with The New York Times, Mr. Lay remained steadfast in his expressions of innocence, even as he acknowledged, as head of the company, accountability for the debacle rests rightfully with him. “I take full responsibility for what happened at Enron,” said Mr. Lay, 62. “But saying that, I know in my mind that I did nothing criminal.”
And even though Mr. Lay takes full responsibility, that does not stop him from pointing the finger of fault against others, including his probable main accuser:
As Mr. Lay describes it, the Enron collapse was the outgrowth of the wrong-headed and criminal acts of the company’s finance organization, and specifically its chief financial officer, Andrew S. Fastow. He says that both he and the board were misled by Mr. Fastow about the activities and true nature of a series of off-the-books partnerships that played the decisive role in the company’s collapse.
In the end, Mr. Lay said, the Enron story is one of corrupt executives in a finance organization led by Mr. Fastow, the former chief financial officer, who took advantage of the company for their own personal benefit and ultimately destroyed it. Mr. Fastow has pleaded guilty to fraud and is cooperating with the government.
?At our core, regrettably, we had a chief financial officer and a few other people who in fact mismanaged the company?s balance sheet and finances and enriched themselves in a way that once we got into a stressful environment in the marketplace, the company collapsed,? he said. ?But by the same token, most and I mean 98 percent of the people who worked at Enron were good, honest, hardworking individuals. They were not crooks.?
And what about Mr. Lay’s former net worth of almost a half billion?:
The years since the Enron collapse have transformed Mr. Lay. The changes in his financial status are stunning. At the beginning of 2001, Mr. Lay said, he had a net worth in excess of $400 million ? almost all of it in Enron stock. Today, he says his worth is below $20 million, and his total available cash not earmarked for legal fees or repayment of debt is less than $1 million.
The article goes on to do a reasonably good job of explaining Lay’s Enron stock sales during the company’s demise in late 2001, most of which were forced sales to meet margin calls. Those stock sales are reportedly a big part of the current criminal investigation against Lay, who continues to maintain his innocence of any criminal wrongdoing:
Despite the rumblings that criminal charges against him could well be imminent, Mr. Lay says he is sanguine. ?I know in my mind I did nothing wrong and nothing criminal,? he said. ?But I?d say if it does happen, it?s a great miscarriage of justice.?
But, if faced with indictment, would Mr. Lay consider pleading guilty? ?Absolutely not.?