Ex-company chairman speaks out a month before his two trials

Lay blasts U.S. over Enron

December 14, 2005|By NEW YORK TIMES NEWS SERVICE

HOUSTON -- The well known and the powerful often appear before the Houston Forum, one of the city's elite speaker venues. Sen. John McCain gave a recent talk, as did Michael Chertoff, the homeland security secretary.

But the speaker who incited the greatest interest was one of Houston's own: Kenneth L. Lay, the former chairman of Enron Corp., who spoke yesterday.

It was a rare appearance for Lay, one of particular note because he goes on trial next month in Houston on criminal charges that could send him to prison for decades.

Lay used the opportunity to make his case before the crowd of well-heeled Houstonians, forcefully proclaiming his innocence and contending he was the victim of a "wave of terror" in a speech invoking the Scripture and the wisdom of Winston S. Churchill.

"We must create our own `wave of truth,' " said Lay, 63. "I believe the return to sanity has begun."

Lay used the bulk of the speech to assail the actions of the Justice Department.

"Let me cut to the chase," Lay said. "In this trial - apparently unlike most criminal defense cases - defendants are trying to get the truth in and the prosecutors - the Enron Task Force - are trying to keep it out."

He also said he planned to testify at his trial, even while acknowledging that the tactic is risky. "Others will be viewed more objective, more credible than I will be," he said.

Lay accepted an invitation in late November to appear before the Houston Forum. Standing between large flags of Texas and the United States, Lay laid the blame for Enron's dramatic collapse four years ago on an underling, Andrew S. Fastow, then chief financial officer.

Fastow pleaded guilty to fraud, is cooperating with the government and faces 10 years in prison.

Lay's decision to go public with his feelings runs counter to the advice of many criminal defense lawyers, who generally prefer to have their clients remain silent until a trial starts. Not so in the case of Lay, represented by one of Houston's most aggressive lawyers, Michael Ramsey. Ramsey arrived at the ballroom of the J.W. Marriott hotel in this city's upscale Galleria shopping district clad in a pinstripe suit and cowboy boots.

"We got an opportunity to talk in a rather dignified setting, a place with some gravitas," said Ramsey. "Of course, until you put the ax to the wood, you don't know what you're going to get."

Lay faces charges that he engaged in a conspiracy to deceive investors and employees of the company's financial troubles just before it collapsed. On trial with him will be Jeffrey K. Skilling, Enron's former chief executive, and Richard A. Causey, a former chief accounting officer, who both face additional counts, including lying to auditors and insider trading.

Lay's move to criticize the actions not just of Fastow but also the Justice Department's Enron Task Force is taking a page from the playbook of another embattled former chief executive, Richard M. Scrushy, the onetime leader of HealthSouth Corp. in Birmingham, Ala.

Scrushy rarely missed an opportunity to publicly declare his innocence before and during his trial, joining a large church in Birmingham, Ala., and hosting an evangelical Christian television program for viewers in Alabama. A jury acquitted him in June, though he has since been indicted on separate charges in a political corruption case.

Unlike Scrushy's fiery style, however, Lay's polished delivery of his speech yesterday was reminiscent of the days before Enron's collapse when he was this city's most prominent business leader, frequently speaking before business, political and religious organizations. Lay and his wife, Linda, have still made occasional appearances at charitable events in recent months in Houston.

Lay is taking a chance with his re-entry into the public eye in Houston, given the emotions associated with his leadership of Enron. More than 4,000 employees lost their jobs as a result of the company's demise, and the city has yet to find another hometown company with similar flash and prominence.

The capacity crowd of about 250 politely applauded him at the beginning and end of his speech, and a representative of the Houston Forum gave him a copy of 1776, the book by the historian David McCullough, which Lay said reminded him of the "importance of faith and God in the founding of this country."

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