Houston – Enron Corp. founder Ken Lay received a barrage of written warnings from employees questioning the energy giant’s accounting integrity in the fall of 2001 but said Monday he was too busy trying to save the company to investigate.
The former chairman was combative during his fifth day on the witness stand in his fraud and conspiracy trial, accusing a federal prosecutor of highlighting only negative information.
“I didn’t have that luxury (of hindsight) when I was right in the middle of battle,” Lay protested.
Prosecutor John Hueston, in his third day of cross-examination, sought to show that Lay ignored warnings of accounting impropriety and financial doom after resuming as chief executive upon the resignation of co-defendant Jeff Skilling from that role in mid-August 2001. Enron filed for bankruptcy protection that December.
Yet in November 2001, with Enron’s stock and reputation already in the tank, Lay told employees he could “not have ever contemplated” what lay ahead for the company and its stockholders.
As he did last week, Lay bristled and bickered, claiming he had received positive information along with negative.
One warning came in October 2001 via an e-mail from Jim Schweiger, a longtime trader, three days after Lay announced a massive third-quarter loss and a $1.2 billion write- down in shareholder equity.
