Former Enron Corp. Chairman and CEO Kenneth Lay admitted responsibility for his company’s bankruptcy last week, but he said he had not committed any crimes worthy of an indictment.

In comments that appeared on the New York Times‘ Internet site on June 27, Lay blamed former CFO Andrew Fastow for most of the problems that occurred at the fallen energy giant. Fastow pleaded guilty in January to conspiracy to commit wire fraud and conspiracy to commit securities fraud (see NGI, Jan. 19).

“I take full responsibility for what happened at Enron,” Lay, 62, told the Times. “But saying that, I know in my mind that I did nothing criminal.”

The former chief said that he and the board of directors had been misled by Fastow. Less than two months before the company declared bankruptcy, Lay publicly supported Fastow during a conference call with financial analysts (see NGI, Oct. 22, 2001). Even though details of the massive financial fraud were beginning to come to light, Lay allowed Fastow to discuss Enron’s liquidity position, and introduced him by saying that the company continued “to have the highest faith in Andy, and I think he’s doing an outstanding job as CFO.”

Fastow was fired less than a week later, and Lay has since changed his opinion.

“At our core, regrettably, we had a chief financial officer and a few other people who, in fact, mismanaged the company’s balance sheet and finances and enriched themselves in a way that once we got into a stressful environment in the marketplace, the company collapsed,” Lay was quoted as saying. “But by the same token, most, and I mean 98%, of the people who worked at Enron were good, honest, hardworking individuals. They were not crooks.”

Fastow faces a 10-year prison sentence for his guilty plea, but the sentencing is part of an agreement to cooperate with the Department of Justice’s Enron Task Force. Rumors continue to circulate that Lay will be indicted on criminal charges in the next few days.

During the Times interview Lay also said that his relationship with the Bush family has become a liability.

“If anything, being friends with the Bush family, including the president, has made my situation more difficult because it’s probably a tougher decision not to indict me than to indict me,” Lay said.

However, Lay said he is not guilty of anything, and believes that if he is indicted, it would be a “great miscarriage of justice.” Federal authorities involved with the U.S. Justice Department’s Enron Task Force expect a federal grand jury will return an indictment of Lay this week.

Lay’s net worth at the beginning of 2001 was $400 million, but his worthless Enron stock has put the current estimate below $20 million. Most of the remaining amount is earmarked for legal fees and debt repayment, he said.

©Copyright 2004 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.