Lay ‘devastated’ by Enron failure

Enron’s collapse caused more “enduring pain” than the death of a loved one, the energy giant’s founder Kenneth Lay has told a US court.

Mr Lay made the claims as he began his defence against charges of fraud and conspiracy over Enron’s collapse.

He also laid the blame for the energy firm’s failure firmly at the feet of former finance chief Andrew Fastow.

Mr Lay is facing six charges of conspiracy, and wire and securities fraud. He denies the charges.

During his first day on the witness stand at the Houston court Mr Lay proclaimed his innocence saying he had been devastated by Enron’s collapse.

“I’m sure there’s absolutely nothing in my life, including the loss of life of many of my loved ones, that even comes close to the same level of pain, and the same enduring pain, that has caused,” he said.

“I guess you could say in the last few years I’ve achieved the American nightmare,” he added.

Prosecutors say Mr Lay knew the company faced huge problems with fraudulent accounting, overvalued assets and struggling business ventures in the months before the crash.

The 64-year-old headed Enron for 15 years from its inception until 2001, when he turned over the chief executive’s job to Jeffrey Skilling.

After Mr Skilling resigned six months into his job, Mr Lay took over at the helm once more, and prosecutors allege he then took charge of a conspiracy to lie about the energy company’s financial health.

But Mr Lay dubbed the claims “ludicrous”, saying: “The last thing I would do is step back in as CEO and take over as the leader of a conspiracy.”

Instead he repeated defence claims that Enron was brought down by a lack of market confidence in the firm triggered by revelations that chief financial officer Andrew Fastow had stolen millions from the company.

He added that Mr Fastow had done a “tremendously brilliant” job of hiding his crimes from the energy giant’s executives.

Mr Fastow – one of the prosecution’s star witnesses – has claimed that Mr Lay and Mr Skilling lied to the US stock market, company workers and the public about the state of Enron.