The Annotated Lay

May 25th, 2006 by

The Insider has followed trial of former Enron CEO Ken Lay with considerable interest. Just as we like to track the memory lapses of CEOs who plagiarize the work of others (did someone say “Raytheon“?), we are intrigued when one of the most powerful corporate leaders in America claims that he didn’t know what his people were doing. “You just do your thing and tell me about it when you get around to it. Even better, don’t tell me. I don’t want to know.” Yeah, right. Throughout the trial, Lay continued to blame his fall on the Wall Street Journal. Bad press caused a collapse in confidence. The Journal, of course, is famous for its muckraking attacks on corporate giants. One after another, the Fortune 500 fall.
Insider readers might enjoy a visit to Ken Lay’s own website, where his Barnum-like persona is in full swing. He hasn’t had a chance to update the site with details of his conviction (that might take a while). Meanwhile, here’s an annotated look at his most recent letter to the world:
As my trial draws to a close, I reflect back on my case. [Do I ever!] The trial began in late January, and the defense rested on Monday, May 8. [The legal fees are amazing. I sure hope my alma mater returns $1.1m I gave to them.] The jury is now deliberating on the case. [Here’s hoping for a hung jury!]
I wanted the truth to come out about Enron, and elected to testify on my own behalf. [These two items are not necessarily related.] I believe that my legal team and I brought out important facts about Enron and its collapse. [We also omitted certain facts that we considered, well, immaterial.]
Enron was a strong, profitable, growing company even into the fourth quarter of 2001. In February 2001, I stepped down as CEO of Enron. I was confident that Enron was financially strong, highly profitable and growing rapidly and we had the numbers to prove it. [Boy, did we have the numbers. You want numbers? I’ll give you numbers!]
Yet, in less than 10 months, in December 2001, Enron was forced to file for bankruptcy protection. Although many events contributed to Enron’s bankruptcy, the actual triggering event for Enron’s bankruptcy was the loss of confidence by the financial community and by Enron’s trading counter parties, which began a collapse that ultimately could not be reversed. The notion that Andrew Fastow, Enron’s CFO, might be involved in illegal activities provoked the loss of confidence, leading to a classic run on the bank. This business was dependent on trust—and the actions of Andrew Fastow and his cohorts breached that trust. The result for Enron, its shareholders, employees, retirees and others was catastrophic. [The corollary of trust is the sucker. See P. T. Barnum, even if he never really said it.]
I failed to save the company that I helped build and loved. As I have said many times, I am devastated by this failure and its negative impact on so many lives. [Good thing I salted away a fortune prior to the collapse.] But failure does not equate to a crime. [To quote the immortal Richard M. Nixon: “I am not a crook.”]
Reviewing the government’s case against me, I believe that the Enron Task Force did not fulfill the burden of proof. The vast majority of the Enron Task Force witnesses in this case reached plea agreements with the government, which made testifying against others in their best interest. [Excuse me, but the former employees presumably plea bargained because they were guilty.]
Instead, the Enron Task Force spent days upon days raising arguable issues not in any way related to the charges in the indictment against me in an effort to personally attack me and make the jury question my character. We firmly believe that the jury will see through this maneuver. [Mission accomplished. The jury saw right through all the maneuvers…]
I have read that some people were surprised by my forcefulness when I testified on my own behalf. I will continue to forcefully defend myself against all false accusations as I proclaim my innocence of the crimes of which I have been accused. We are confident that I will be found not guilty of all charges. [OK, we’re not so confident about that any more. However, we are confident that we will prevail on appeal. After that, we are confident that we will win a Presidential pardon. One hundred thousand smackeroos ought to buy you something! If that fails, I’ll, I’ll rat out someone else. Let’s make a deal!]
Thank you. [And good night]