A team of 150 attorneys and assistants working on the Enron Corp. case for 18 months failed to find any direct evidence or testimony to indicate that former Chairman Kenneth Lay was aware of wrongdoing at the now-bankrupt company, a court-appointed examiner who led the effort told The Washington Post.

Atlanta attorney R. Neal Batson, who is now free to discuss his role, concluded that Lay should have known about the use of widespread accounting abuses by executives to bolster the company’s earnings, but he said the evidence against the former chairman is “circumstantial,” according to the newspaper.

His conclusion supports that of Sherron Watkins, who had warned Lay months before the Enron filed for bankruptcy that the company was about to “implode” in a wave of accounting irregularities.

A former vice president of corporate development, Watkins told Congress in February 2002 that Lay was “duped” by both ex-CEO Jeffrey K. Skilling and one-time CFO Andrew S. Fastow. “It is my…opinion he [Lay] did not understand the gravity of the situation that the company was in,” she said, adding that Lay was “a man of integrity.”

Batson, however, said in his report that Lay was a “hands-on” executive who was fully involved in Enron’s activities. This contrasts with others that saw Lay as a “president emeritus” who was more involved in philanthropic and civic activities rather than his own company.

For more than three years, Enron routinely had to rely on accounting ruses to reach its profit and cash-flow targets, which the Batson report said were clear “red flags” that Lay and other executives should not have missed, the Post reported.

Lay is one of the few high-echelon Enron executives not charged with a crime. He is, however, under scrutiny by the Department of Justice and the Securities and Exchange Commission, sources told the newspaper.

Lay, who has denied any wrongdoing in the Enron scandal and collapse, provided Batson’s team with an off-the-record interview, but he left behind little evidence of his decisions in inter-company e-mails or other records, Batson said. Lay has talked little about his role in the Enron collapase in public, instead asserting his Fifth Amendment right against self-incrimination.

Batson has come under attack for the $91 million price-tag for the investigation. “This is my 37th year [as a lawyer]. I have never, never ever seen a case that was more complex in terms of the financial machinations,” he said in defense of the cost.

Batson’s team filed four investigative reports with the bankruptcy court totaling 4,500 pages before ending its inquiry, the newspaper said.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.