Skip to comments.Enron's Lay 'betrayed' by Fastow - lawyer
Posted on 01/15/2004 4:09:08 PM PST by sarcasm
HOUSTON, Jan 15 (Reuters) - Ken Lay's lawyer offered a wide-ranging defense of the former Enron chairman on Thursday, laying blame for the financial scandal that brought down the energy giant on former financial mastermind Andrew Fastow.
Lay's lawyer, Michael Ramsey, told reporters that Lay had asked him "to express to the public at large the sense of betrayal that he feels relative to what occurred yesterday."
Fastow, Enron Corp.'s <ENRNQ.PK> former chief financial officer, pleaded guilty on Wednesday to two charges of conspiracy to commit wire and securities fraud that will send to him to prison for up to 10 years. He will also pay nearly $24 million in restitution.
As part of the plea deal, Fastow will cooperate with the prosecutors' ongoing investigation into the accounting scandals that drove the company into bankruptcy amid an uproar that shook Wall Street and the energy markets.
Neither Lay nor Jeff Skilling, Enron's former chief executive officer, has been charged with any crimes.
Ramsey said Lay had no knowledge that any of Enron's "special-purpose entities" that Fastow created had been used to illegally bolster the company's books, or that Fastow and others were siphoning money into their own pockets.
"Absolutely Andy Fastow had the trust of Ken Lay and the board up through at least October of 2001," Ramsey said.
"Lay had the right to rely on that person at the very top of the chain," he added.
Fastow was fired in October 2001, just weeks before the company entered the bankruptcy proceedings that are still ongoing.
Fastow's diversion of Enron's money to himself indicated that Lay had no knowledge of the crimes, Ramsey said.
"When a ring of thievery is going on at the very heart of a corporation, you don't tell the boss and you don't tell the board," he said.
Ramsey said Lay would emerge to defend himself in public in the coming weeks.
"He's insistent that he wants to talk.... He's suffered about as much he wishes to suffer hearing rumors and things that are not true in the press," Ramsey said.
With Lay at the helm, Enron grew from an obscure pipeline company into one of the world's largest and most sophisticated energy traders, becoming the darling of Wall Street before its demise.
Although the investigation into Lay continues, Ramsey reiterated he did not expect any charges to be filed against his client, who he said lost hundreds of millions of dollars when Enron collapsed.
"He himself crashed with Enron," Ramsey said.
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I also bet that Ken Lay has called Willie and asked if he still had any pull for a pardon and, if so, how much would it cost. Lay probably knew what Willie's answer was, but would also be willing to pay Willie for the contact number of the guy who did Vince Foster.
Do they grow worms at Harvard Business School?
Inquiring minds want to know.
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