Kenneth L. Lay,
Ex-Chairman of Enron, Dies
By AP from the
NYTimes on the Web, July 5, 2006
 |
|
|
Michael Stravato for The New York Times
Kenneth L.
Lay, former Enron chief, was convicted May 25 of defrauding
investors and employees by repeatedly lying about the company's
financial strength in the months leading up to its collapse. |
|
HOUSTON -- Enron Corp. founder
Kenneth Lay, who was convicted of helping perpetuate one of the most sprawling
business frauds in U.S. history, has died. He was 64.
Nicknamed "Kenny Boy" by President Bush, 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 No. 7 on the Fortune 500 in 2000 and claimed
$101 billion in annual revenues.
He 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
finances. He was scheduled to be sentenced Sept. 11.
Lay had built Enron into a high-profile, widely admired company, the
seventh-largest publicly traded in the country. 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 U.S. District Court Jan. 30, it had been
expected that Lay, who enjoyed great popularity throughout Houston as chairman
of the energy company, might be able to charm the jury. But during his
testimony, Lay ended up coming across as irritable and combative.
He also sounded arrogant, defending 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 defense 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, Mo. 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 Corp. (NYSE:XOM) predecessor Humble Oil & Refining upon
graduation.
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, Neb. to form Enron, and Lay became chairman and CEO of
the combined company the next year.
|
