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Lay: Truth Victim of 'Wave of Terror'

Kenneth L. Lay told a Houston audience last Tuesday that when he stepped down as CEO of Enron in February 2001 "he was confident that Enron was financially strong, highly profitable, growing rapidly...." Yet 10 months later the company filed for bankruptcy.

Lay said former Enron CFO Andrew Fastow is the individual most at fault for the collapse of the company. However, "The amount of money that Fastow and [Fastow lieutenant Michael] Kopper have admitted they stole from Enron did not bring Enron down. As despicable and criminal as their deeds were, the amount they stole -- tens of millions of dollars -- given Enron's size, was relatively small. It was the stench of possible misconduct by Fastow -- the notion that Enron's CFO might be involved in shady or even illegal activities that provoked the loss of confidence causing the run on the company's treasury."

Lay spoke before about 400 attendees and 35 reporters at a Houston Forum luncheon. He fielded a handful of questions from luncheon attendees but would not take questions from reporters. When asked what he would have done differently knowing what he does today, he said, "I wouldn't have hired Andrew Fastow."

Lay also was queried about his response to concerns raised by so-called Enron whistleblower Sherron Watkins. Lay said he did not ignore Watkins allegations and had them investigated by outside attorneys. Someone else asked Lay how he could not have known what was going on at the company, and he said he believes in hiring the best people he can and delegating. "Sometimes I am too trusting, but I do believe in delegation."

In his prepared remarks, Lay blasted the Enron Task Force for failing to seek the truth of the events leading up to Enron's downfall and instead persecuting him and others. Alluding to Winston Churchill, Lay said "the great rock" of truth has been submerged by a "wave of terror" by the Enron Task Force. In order to exonerate himself and rehabilitate the reputation of the fallen energy giant and its employees, "we must create our own 'wave of truth,'" Lay said in a speech titled "Guilty, Until Proven Innocent." He goes on trial next month along with former CEO Jeffrey Skilling and former Chief Accountant Richard Causey.

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