Enron boss Lay: My American nightmare

Published on Tuesday 25 April 2006 02:31

FORMER Enron chairman and chief executive Kenneth Lay took the witness stand at his criminal trial yesterday, declaring his innocence and telling the jury in Houston, Texas, he had been devastated when the company collapsed.

"I guess you could say in the last few years I've achieved the American nightmare," Lay said during questioning by his lawyer, George McCall Secrest.

Lay is on trial with former Enron chief executive Jeffrey Skilling on charges that they lied to investors about the true financial condition of the company, once the seventh-largest in the US, as it crumbled into bankruptcy in December 2001 with debts of $31.8 billion (18bn). He is facing a potentially lengthy jail sentence.

Enron's dramatic collapse - the largest ever at the time - was the first in a wave of corporate scandals that went on to include Worldcom and Global Crossing and which sent Wall Street into steep decline.

The crash left thousands jobless and wiped out many investments. Lay denies the charges but will have to rebuff witness claims, including those by Enron's ex- finance chief, Andrew Fastow, who told jurors last month that Lay lied to the stock market, company workers and the public about the state of Enron.

Lay, 64, headed Enron for 15 years from its inception until 2001, when he turned over the CEO job to Skilling. He resumed his role as CEO when Skilling resigned six months later.

Prosecutors have contended that Lay then took charge of a conspiracy to lie about the energy company's financial health.

He faces six counts of conspiracy and fraud, while Skilling, 52, faces 28 charges of conspiracy, fraud and insider trading. Both face decades in jail if convicted.

Lay, the son of a minister, grew up in poverty in Missouri, but landed a senior position in the US department for energy in the 1970s after earning a doctorate in economics.

He repeated his assertion that Enron was brought down by a crisis of investor confidence stemming from revelations that Fastow had skimmed millions of dollars from the company.