Making his case

December 22, 2005

In the American legal system, everyone is innocent until proved guilty. Everyone is entitled to a vigorous defense. Everyone can tell his side of the story, if he chooses. And one way or another, well-heeled defendants often seem to make the most of all that, though of course exceptions abound.

Now comes Kenneth L. Lay, the former Enron chairman, quoting Winston Churchill, attacking his federal prosecutors and calling on former employees of the bankrupt energy behemoth to join in his defense - a little more than a month before he finally goes on trial on seven conspiracy and fraud charges that could put him away for 175 years.

It used to be that criminal defense lawyers tended to keep their clients tightly under wraps, for fear they'd shoot themselves in the foot with public statements. But there's the recent example of another fallen CEO, Richard M. Scrushy, the former head of the HealthSouth Corp. in Birmingham, Ala. Before his fraud trial, Mr. Scrushy launched a pervasive public relations and charitable works campaign that even included his own cable TV show. In June, he was acquitted; local observers joked that he had so gilded his image in Birmingham that the verdict stemmed from the world's greatest act of jury-pool tampering.

So last week at a distinguished civic forum in Houston, Mr. Lay took to the podium to proclaim that Enron was an honest company and that any fraud was at the hand of the company's convicted chief financial officer. So be it; we're sure we'll hear more about those assertions during his trial next month. But when Mr. Lay asked Enron's 4,000 former employees to stand with him to create a "wave of truth," he might have been overreaching a bit.

After all, about 20,000 Enron employees, retirees and their beneficiaries lost hundreds of millions of dollars in their retirement and savings accounts when Enron's stock crashed in 2001. In its bankruptcy, employees ended up with no more than $13,000 apiece in severance, but they learned that 152 top executives were paid a total of about $800 million in the year before the company crashed - with Mr. Lay getting $104 million that year.

It's Mr. Lay's right, as we said, to speak up. But in exhorting former Enron employees - many of whom are still angry over their lost savings and careers - to stand up, he might end up with more than he's bargaining for.

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