Kenneth Lay

"Ken Lay" redirects here. For the Chief Commissioner of Victoria Police, see Ken Lay (police officer).

Kenneth Lay
Mugshot of Lay upon his arrest in 2004
Born	Kenneth Lee Lay (1942-04-15)April 15, 1942 Tyrone, Missouri, U.S.
Died	Snowmass, Colorado, U.S.
Occupation	Businessman
Political party	Republican
Spouse(s)	Linda Lay Judith Ayers
Children	Elizabeth Ayers Lay Vittore Mark Kenneth Lay Robyn Anne Herrold Lay Vermeil Todd David Herrold Robert Ray (Beau) Herrold

Kenneth Lee "Ken" Lay (April 15, 1942 – July 5, 2006) was an American businessman. He played a leading role in the corruption scandal at Enron Corporation. Lay was the CEO and chairman of Enron from 1985 until his resignation on January 23, 2002, except for a few months in 2000 when Jeffrey Skilling was chief executive officer (CEO).

Lay was indicted by a grand jury on 11 counts of securities fraud and related charges. In 2006, following four and a half years of preparation by government prosecutors, Lay's trial began in Houston and was found guilty on 10 counts. Lay died while vacationing in Snowmass, Colorado, on July 5, 2006 just months before his October 23 sentencing. A preliminary autopsy reported Lay had died of a heart attack caused by coronary artery disease and his conviction was vacated

Early life

Lay was born in the Texas County, Missouri town of Tyrone, the son of Ruth (née Rees) and Omer Lay. He moved to Columbia, Missouri and attended David H. Hickman High School and the University of Missouri where he studied economics, receiving a B.A. in 1964 and an M.A. in 1965.He served as president of the Zeta Phi chapter of the Beta Theta Pi fraternity at the University of Missouri. He went on to earn his Ph.D. in economics from the University of Houston in 1970 and soon after went to work at Exxon Company, USA.

Career

Lay worked in the early 1970s as a federal energy regulator. He then became undersecretary for the Department of the Interior before he returned to the business world as an executive at Florida Gas Transmission. By the time energy was deregulated in the 1980s, Lay was already an energy company executive and he took advantage of the new climate when Omaha-based Internorth bought his company Houston Natural Gas and changed the name to Enron in 1985. He was also a member of the board of directors of Eli Lilly and Company and a director at Texas Commerce Bank.

Ken Lay was a close friend of the Bush family. He first established a relationship with Vice President George H. W. Bush, making large campaign contributions to him and heading several critical committees in the Republican Party. Lay was co-chairman of Bush's 1992 re-election committee. At the request of George H. W. Bush, Lay helped to orchestrate the World Economic Summit in Houston. Lay remained close friends with the senior Bush, eventually establishing a close relationship with his son, then Texas Governor George W. Bush & his Manchester UK operations.

As President Bush and his wife flew to Washington with Lay on an Enron corporate plane. In December 2000, Lay was mentioned as a possible candidate for President Bush's Treasury Secretary along with head Douglas A. Warner III of J.P. Morgan & Co., but Paul O'Neill was eventually selected.

From 1989 to 2002, his political contributions included $5.8 million, with 73% going to Republicans, and 27% going to Democrats. From 1999 to 2001, his political campaign contributions include $365,410 to the Republican Party.

Lay was one of America's highest-paid CEOs, earning a $42.4 million compensation package in 1999.

Indictment and trial

Main article: Trial of Kenneth Lay and Jeffrey Skilling

On July 7, 2004, Lay was indicted by a grand jury in Houston, Texas, for his role in Enron's collapse. Lay was charged, in a 65-page indictment, with 11 counts of securities fraud, wire fraud, and making false and misleading statements. The trial commenced on January 30, 2006, in Houston, despite repeated protests from defense attorneys calling for a change of venue on the grounds that "it was impossible to get a fair trial in Houston" — the epicenter of Enron's collapse. Enron's bankruptcy was the biggest in U.S. history when it was filed in December 2001. It cost 20,000 employees their jobs and many of them their life savings. Investors lost billions of dollars. Before Lay was put on trial he was estimated to have a gross wealth of approximately US$40 million. It is believed that most of it was spent on his legal defense.

During his trial, Lay claimed that in 2001 Enron stock made up about 90 percent of his wealth, and that his net worth (in 2006) was in the negative by $250,000. He insisted that Enron's collapse was due to a conspiracy waged by short sellers, rogue executives, and the news media. It was reported that Lay's congenial reputation took a blow as he appeared confrontational and irritable at several points during his testimony. On May 25, 2006, Lay was found guilty on all six counts of conspiracy and fraud by the jury. In a separate bench trial, Judge Lake ruled Lay was also guilty of four counts of fraud and making false statements. Sentencing was scheduled to take place on 11 September 2006, but was later rescheduled for 23 October 2006.

Lay liquidated more than $300 million in Enron stock from 1998 to 2001, mostly in stock options. As the scandal unfolded, Lay insisted he wanted to "tell his story," but later reneged on a promise to testify to Congress, taking the Fifth instead.

Death

Lay died on July 5, 2006, while vacationing in Colorado. The Pitkin Sheriff's Department confirmed that officers were called to Lay's house in Old Snowmass, Colorado, near Aspen at 1:41 am MDT. Lay was taken to Aspen Valley Hospital, where he was pronounced dead at 3:11 am MDT. The autopsy indicated that he died of a heart attack brought on by coronary artery disease, and found evidence that he had suffered a previous heart attack.

A private funeral with around 200 in attendance was held in Aspen four days after his death, his body cremated and the ashes buried in a secret location in the mountains. A memorial was held a week after his death at the First United Methodist Church in Houston, attended by nearly 1,200 guests including former President George H. W. Bush, who did not speak.

Vacating of conviction

On October 17, 2006, since Lay died prior to exhausting his appeals, his conviction was vacated. Precedent in the Fifth Circuit Court of Appeals, the federal appellate court governing the district where Lay was indicted, indicates that vacation of the conviction had to be automatically granted. When vacation occurs, the law views it as though he had never been indicted, tried and convicted. The government opposed Lay's attorneys' motion, and the Department of Justice issued a statement that it "remains committed to pursuing all available legal remedies and to reclaim for victims the proceeds of crimes committed by Ken Lay." Civil suits are expected to continue against Lay's estate. According to legal expert Joel Androphy, claimants may not recover punitive damages against a deceased defendant, although claimants may recover compensatory damages.

Legacy

Condé Nast Portfolio ranked Lay as the 3rd worst American CEO of all time. A number of books have been written on Lay and Enron including Conspiracy of Fools (2005), Icarus in the Boardroom, The Tao of Enron: Spiritual Lessons from a Fortune 500 Fallout (2002), Enron: Anatomy of Greed (2001), The Smartest Guys in the Room (2003), 24 Days, Business Fairy Tales and Power Failure. The Smartest Guys in the Room was adapted into a documentary film titled Enron: The Smartest Guys in the Room, released in 2005.

rey Skilling]]

• August 2001: Returns as CEO after Skilling's departure
• January 2002: Under extreme pressure, Lay resigns as Enron CEO, leaves Board
• July 2004: Indicted by grand jury
• May 2006: Found guilty on ten counts of fraud and conspiracy
• July 2006: Died at age 64, near Aspen, Colorado, while on vacation
• October 2006: A federal Judge vacates conviction

Awards and honors

• Anti-Defamation League—Torch of Liberty Award
• Beta Theta Pi (National Fraternity)—Oxford Cup
• Brunel University (London)—Honorary Doctor of Social Sciences
• Child Advocates—Super Hero Honoree Award
• Episcopal High School—Campaign Fundraiser Award
• Gas Daily—Man of the Year Award
• Horatio Alger Association of Distinguished Americans—Annual Membership Award
• Houston Area Women's Center—Honoree
• Houston Children's Chorus—Honoree
• Houston Community Partners—Father of The Year
• Kenneth Lay Day—Proclaimed by Kathryn J. Whitmire, Mayor of Houston, Texas
• Kiwanis Club of Houston and the Greater Houston Partnership—International Executive of the Year
• March of Dimes—Award of Distinction
• NAACP Freedom Fund Banquet—Mickey Leland Humanitarian Award
• National Conference of Christians and Jews—Brotherhood Award
• Oswego State University—Honorary Doctor of Humane Letters Degree
• Phi Beta Kappa—Outstanding Alumnus Award
• Private Sector Council—Annual Leadership Award
• Stanford Business School Alumni Associations—Houston Business Man of the Year
• Texans For Lawsuit Reform—Award
• Texas Association of Minority Business Enterprises—Texas Corporate Partnering Award
• Texas Business Hall of Fame—Inductee
• Texas Navy Admiral—Commissioned by William P. Clements, Jr., Governor of Texas
• Texas Society To Prevent Blindness—Man of Vision Award
• The Brookwood Community—Honoree Award
• The Rotary Club of Houston—Distinguished Citizen Award
• The Wall Street Transcript—Chief Executive Officer Award
• United States Energy Association—United States Energy Award
• United States Navy—Navy Commendation Medal & National Defense Service Medal
• University of Colorado, College of Business and Administration—Ben K. Miller Memorial, International Business Award
• University of Houston—Distinguished Alumnus Award
• University of Houston—Honorary Doctor of Humane Letters Degree
• University of Missouri—Honorary Doctor of Law Degree; The Hebert J. Davenport Society Benefactor Award
• Volunteer Houston—Honoree Award
• The YMCA in Cinco Ranch in unincorporated Harris County, Texas, was named after Lay. Following the collapse of Enron, his name outside the building was made 70% smaller. Ultimately, the YMCA was renamed the "Katy Family YMCA" after the city of Katy.

Works

Articles by Ken Lay:

• Megatrends Of Energy - World Energy Magazine Vol. 1 No. 1
• Electricity Restructuring Update - Increasing Efficiencies and Customer Choice are Integral to the Market Transition - World Energy Magazine Vol. 1 No. 2

Personal life

Lay had been married to his second wife and former secretary, Linda for 22 years, whom he married on 10 July 1982. He had two children, three stepchildren, and twelve grandchildren.

See also

• Timeline of the Enron scandal

External links

Listen to this article (info/dl)

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More spoken articles

• US v. Skilling and Lay, indictment document (2.3MB PDF).
• Film documentary: The Smartest Guys in the Room
• Calling Inquiries a Distraction, Enron Chief Quits Under Pressure, The New York Times, January 24, 2002
• Ken Lay's political donations
• Alternative History: Treasury Secretary Ken Lay
• Jury selected in Lay's trial - CNN Money
• Ken Lay's political campaign contributions
• Some charges dropped, Enron prosecution rests
• Lay, Skilling guilty in Enron Scandal - MSNBC
• Enron's Founder Kenneth Lay, 64, Dies in Colorado
• No Redemption Now: Thoughts on the Death of Ken Lay, JURIST
• The Times, Obituary