FORMER ENRON CEO KENNETH LAY WAITS AT HEARING ON CAPITOL HILL
Larry Downing  /  Reuters file
“[Skilling's indictment] does not in any way signal the inevitable indictment of Ken Lay,” said Robert Mintz, a former federal prosecutor.
updated 2/19/2004 6:45:20 PM ET 2004-02-19T23:45:20

Is Kenneth Lay next?

With former Enron Corp. chief executive Jeffrey Skilling indicted , the fate of Enron's former chairman is perhaps the biggest question hanging over the escalating federal investigation into wrongdoing at the fallen energy giant.

Former employees said Thursday they'd like to see prosecutors bring charges against Lay, too, although some see Skilling as the biggest culprit. But both legal experts and those who worked for Lay agreed it was unlikely that Skilling would cooperate with prosecutors and help them get Lay.

"This does not in any way signal the inevitable indictment of Ken Lay," said Robert Mintz, a former federal prosecutor and an expert in white-collar crime. The indictment against Skilling does not show clear-cut acts of criminality and "the very broad and sweeping nature" of it suggests the charges are becoming "more diffused rather than more focused," he said.

By contrast, the previous indictment of former chief financial officer Andrew Fastow alleged fraud in several particular transactions and prompted a guilty plea and 10-year sentence in exchange for his cooperation.

Skilling has never wavered from his public statements that his sudden resignation in August 2001 had nothing to do with the faltering of Enron. The company went bankrupt less than four months after he left and the collapse led to an extensive two-year federal investigation into alleged schemes to mislead government regulators and investors about the company's earnings.

Skilling pleaded innocent Thursday to nearly three dozen counts of fraud, insider trading and other crimes in the highest-reaching indictment yet stemming from the Enron scandal.

"He's not going to plead (guilty). That's just how arrogant he is," said Carol Elkin, one of the more than 4,500 Enron workers who lost their jobs and retirement funds in the company's collapse, on the likelihood of Skilling agreeing to a plea bargain.

"If you have any experience with the both of them, it's not hard to figure out that Skilling — at least as the perception goes — is the evil twin," said Elkin, who worked at Enron for nearly five years and watched her young daughter's stock-based college fund dwindle from about $100,000 to nothing in a matter of weeks.

Prosecutors say Skilling knew that several partnerships were created to help Enron achieve financial reporting goals and that they were a means for Fastow and others to be "heavily compensated," the government alleges.

Some of the counts against Skilling allege insider trading of Enron stock. Lay sold nearly $100 million worth of shares in 2001, though his attorneys say the sales were made to repay debts and he was not trying to dump stock. Lay is not mentioned by name in the Skilling indictment.

However, the indictment against Skilling mentions his former boss by title only in two instances: Skilling reported directly to Enron's CEO and chairman; and Enron's chairman/CEO briefly mentioned a $1.2 billion writedown in shareholder equity during a conference call with analysts the same day Enron announced massive third-quarter losses in mid-October 2001.

One of Lay's attorneys, Michael Ramsey, did not immediately return telephone a message left by The Associated Press on Thursday. After Fastow's plea deal in January, Ramsey said Lay had no worries as long as everyone told the truth.

Charles Prestwood, 65, who now lives day to day after losing $1.3 million in retirement savings, said no one will ever convince him that Lay didn't know everything that was happening.

"It's impossible for a man to be in that position and be totally ignorant. I'll never buy that," he said.

Former worker Diana Peters believes Lay was negligent but not criminal.

"If they find concrete evidence on Ken Lay where they can press charges, I'm going to really be heartbroken," she said.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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