Former Enron chairman and chief executive Ken Lay took responsibility for the energy company’s spectacular downfall but insisted he had committed no crimes in an interview with The New York Times.
Lay, in comments published in Times’ Sunday editions, said Enron’s former chief accounting officer Andrew Fastow was largely to blame for the Houston-based firm’s collapse into bankruptcy in December 2001.
“I take full responsibility for what happened at Enron,” said Lay, 62. “But saying that, I know in my mind that I did nothing criminal.”
Enron was the nation’s top power trader and a Wall Street darling until it was disclosed the company used off-the-books deals to hide billions of dollars in debt and inflate profits.
Lay told the Times he and the board were misled by Fastow, who was accused of siphoning off millions of dollars from the off-the-books deals into his own bank accounts.
“At our core, regrettably, we had a chief financial officer and a few other people who, in fact, mismanaged the company’s balance sheet and finances and enriched themselves in a way that once we got into a stressful environment in the marketplace, the company collapsed,” he said.
“But by the same token, most, and I mean 98 percent, of the people who worked at Enron were good, honest, hardworking individuals. They were not crooks.”
Fastow has pleaded guilty to fraud and is cooperating with prosecutors, who according to news reports are expected to indict Lay on criminal charges in the next few days.
Political ally
Lay was a friend and political ally of President Bush and his father, former President George H.W. Bush, but he said that relationship has become liability.
“If anything, being friends with the Bush family, including the president, has made my situation more difficult because it’s probably a tougher decision not to indict me than to indict me,” he said.
But he said that if he is indicted it would a “great miscarriage of justice” and that he would not plead guilty to any charges.
He said his net worth at the beginning of 2001 was $400 million, but is now below $20 million, with most of that earmarked for legal fees and debt repayment. His fortune has plummeted because most of it was tied up in now-worthless Enron stock, he said.