Enron founder Ken Lay dies
Enron founder Kenneth Lay, who was convicted of helping perpetuate one of the most sprawling business frauds in United States history, died on Wednesday in Aspen, Colorado. He was 64. Lay died of a heart attack, his pastor in Houston said.
“Apparently, his heart simply gave out,” said Pastor Steve Wende of Houston’s First United Methodist Church. Lay, who lived in Houston, frequently vacationed in Colorado.
Lay was convicted May 25 along with former Enron CEO Jeffrey Skilling of defrauding investors and employees by repeatedly lying about Enron’s financial strength in the months before the company plummeted into bankruptcy protection in December 2001. Lay was also convicted in a separate non-jury trial of bank fraud and making false statements to banks, charges related to his personal
Skilling, reached by telephone at his home in Houston, told the Associated Press (AP) that he was aware of Lay’s death.
“No, I don’t have any comment,” he said quietly.
Prosecutors in Lay’s trial also declined comment on Wednesday, both on his unexpected death and what may become of the government’s effort to seek a $43,5-million judgement from Lay that they say he pocketed as part of the conspiracy. Lay’s death will not affect their case against Skilling.
Both were scheduled to be sentenced October 23. Lay faced decades in prison, as does Skilling.
The Pitkin, Colorado, Sheriff’s Department said officers were called to Lay’s house in Old Snowmass, Colorado, shortly after 1am local time (7am GMT). He was taken to Aspen Valley Hospital, where he was pronounced dead at 3.11am (9.11am GMT).
Pat Worcester, executive assistant to the CEO at Aspen Valley Hospital, said the hospital would release a statement later.
Family spokesperson Kelly Kimberly issued a statement saying, “Ken Lay passed away early this morning in Aspen. The Lays have a very large family with whom they need to communicate. And out of respect for the family, we will release further details at a later time.”
Burt Palmer, the church’s executive pastor, told AP that the Lays attended church in Houston on Sunday. “The church continues to love them and help them walk through this difficult time.”
Lay led Enron’s meteoric rise from a staid natural gas pipeline company formed by a 1985 merger to an energy and trading conglomerate that reached number seven on the Fortune 500 in 2000 and claimed $101-billion in annual revenues. Lay travelled in the highest business and political circles.
For many years, his corporation was the single biggest contributor to President George Bush, who nicknamed him “Kenny boy”.
But Enron collapsed after it was revealed the company’s finances were based on a web of fraudulent partnerships and schemes, not the profits that it reported to investors and the public.
When Lay and Skilling went on trial in US District Court on Januray 30, it had been expected that Lay, who enjoyed great popularity throughout Houston as chairperson of the energy company, might be able to charm the jury. But during his testimony, Lay came across as irritable and combative.
Lay also defended his extravagant lifestyle, including a $200 000 yacht for wife Linda’s birthday party, despite $100-million in personal debt and saying “it was difficult to turn off that lifestyle like a spigot”.
Both he and Skilling maintained that there had been no wrongdoing at Enron, and that the company had been brought down by negative publicity that undermined investors’ confidence.His defence didn’t help his case with jurors.
“I wanted very badly to believe what they were saying,” juror Wendy Vaughan said after the verdicts were announced. “There were places in the testimony I felt their character was questionable.”
Lay was born in Tyrone, Missouri, and spent his childhood helping his family make ends meet. His father ran a general store and sold stoves until he became a minister. Lay delivered newspapers and mowed lawns to pitch in. He attended the University of Missouri, found his calling in economics, and went to work at Exxon Mobil.
He joined the navy, served his time at the Pentagon, and then served as undersecretary for the Department of the Interior before he returned to business. He became an executive at Florida Gas, then Transco Energy in Houston, and later became CEO of Houston Natural Gas. In 1985, HNG merged with InterNorth in Omaha, Nebraska, to form Enron, and Lay became chairperson and CEO of the combined company the next year. - Sapa-AP