Enron founder Ken Lay is on the stand answering defense questions about Enron’s collapse. Houston Public Radio’s Ed Mayberry reports. Aired 4/25/06 during the KUHF Morning Business Report.
Ken Lay blames Enron’s collapse on criminal actions by former Chief Financial Officer Andy Fastow and “probably no more than one or two others,” as well as short-sellers and the Wall Street Journal.
Lay and Skilling are accused of deceiving outsiders about the condition of Enron. But Lay said Enron’s problems were being addressed by management, and both he and Skilling were candid about the company’s challenges in public statements.
Lay said he didn’t know about the contents of the famous Sherron Watkins memo warning of accounting irregularities until the day he met with her in his office. Skilling has testified that he and Lay did not discuss the memo when they met about a week after Skilling’s departure, on the very day that Lay was to meet with Watkins. Lay recounted the concerns that Watkins had about accounting on the LJM transactions. He said he asked her whether there was anything illegal about the deals, but said she was just concerned about an appearance or public relations problem. Lay said he assured her that Fastow would not be allowed to retaliate.
He called his hiring of Fastow his biggest mistake. Lay said his second biggest mistake was promoting Fastow to CFO.
Ed Mayberry, Houston Public Radio News.