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Articles: Law catches up with Ken Lay

Posted by admin on Friday, July 09, 2004 - 06:30 AM

THE SIGHT of Ken Lay in handcuffs sure was a long time coming. The collapse of the Enron Corp. resulted in charges against 31 people and shattered dreams for thousands more who had invested their faith -- in the form of retirement dollars -- in the once high-flying Texas company. Pension funds for government workers and teachers in California alone took a combined hit of $159 million.
Even after three years of investigations, the additional revelations never ceased to shock and appall. Just last month, audiotapes from a legal case in Washington state showed traders bragging about artificially inflating prices and stealing money from grandmothers. Enron's corporate culture seemed rotten to the core. Through it all, one question festered above all others: Why was Ken Lay, Enron's former chief executive, still enjoying the good life in Aspen while so many of his former employees were fighting criminal charges? That question was finally answered Thursday, when an indictment handed up by a federal grand jury in Houston added 11 counts against Lay to charges already filed against his successor, former CEO Jeffrey Skilling, and former company accountant Richard Causey. Unrepentant as ever, the indicted Lay held a news conference after his court appearance. He called it "a tragic day for me and my family" and said "I firmly reject any notion" that he engaged in criminal wrongdoing. Lay reiterated that he assumed responsibility for Enron's downfall, but "that does not mean I know everything that went on at Enron." The indictment sharply contradicted Lay's claim of obliviousness to the deviousness all around him. It asserted that he and other executives enriched themselves through salaries, bonuses and stock deals. He was charged with conspiracy, wire fraud, securities fraud and making false statements to banks. If convicted, he could receive up to 175 years in prison and fines of more than $5.7 million. Also Thursday, the U.S. Securities and Exchange Commission filed a civil suit against Lay, accusing him of fraud and insider trading, partly for dumping $90 million of Enron shares while publicly insisting the company was financially sound. The long-awaited indictments complete the fall from grace for a man who once commanded a private audience to brainstorm national energy policy with Vice President Dick Cheney. The Lays had donated $139,500 to George W. Bush's political campaigns over the years, according to the Center for Public Integrity. Naturally, the spinmeisters at the Bush White House were going out of their way Thursday to distance themselves from the buddy Bush used to call "Kenny Boy." Kenny Boy will now get his day in court to answer these charges. But none of the charges relate to Enron's alleged manipulation of the California market. The state continues to be frustrated in its efforts to pressure the Federal Energy Regulatory Commission for billions of dollars in refunds from companies that exploited the 2000-01 crisis. Lay's indictment is an important milestone. But the quest for justice must continue.

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