The life and times of Ken Lay, and now his sudden death, will forever symbolize an era of corporate greed as practiced in the frenzied trading rooms and executive suites of Enron Corp.
Lay, the face and former chairman of Enron, died of an apparent heart attack Monday in Aspen, leading a reader of the Houston Chronicle to write, “I was surprised [he] had a heart.” Such shocking sentiment reflects the harsh toll Enron’s 2001 demise took among Enron employees in Houston.
Lay had become a poster boy for the ills of corporate America, an image cultivated in their heyday by the Enron go-getters. Lay was facing 25 years or more in prison for helping to create a web of deceit that led to the company’s collapse.
His death came just days after the prosecutors moved to seize his remaining assets. During his trial, Lay claimed his net worth had declined to minus $250,000, yet he still had holdings in an investment account valued at $6.3 million. His Houston apartment was valued at $1.5 million.
Lay’s death may stymie federal efforts to recover his ill-gotten gains, providing no comfort to thousands of former employees who now must scrape together money to patch their tattered retirement safety nets.
Enron’s collapse cost shareholders more than $60 billion in market value, and more than 5,600 employees lost their jobs. More than $2 billion was lost in employees’ retirement funds.
Lay moved in the highest circles in Houston – the president called him “Kenny Boy” – but in May he and Jeff Skilling were convicted of multiple counts of conspiracy and fraud in the collapse of the energy and commodities giant. Skilling will go to prison for his role – a measure of comfort for the thousands of Enron employees who lost their jobs and hard-earned savings. Lay, on the other hand, went to Aspen after his conviction, where he continued to live his life of luxury with the help of friends.
Enron employees looking for justice in Lay’s conviction could well be disappointed. “The death of Mr. Lay in all likelihood will render the government’s hard-fought victory null,” said Christopher Bebel, a fomer federal prosecutor. It will hurt the federal efforts to seize his assets, since the death of a criminal defendant before sentencing may void the case against him. Civil lawsuits against Lay – and others who may have profited from illegal dealings with Enron – will continue.
Lay’s sad legacy, and the conviction of other Enron executives, will linger for years, a clear message to corporate CEOs that fraud and sleight of hand can’t be tolerated.
