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Former Enron Chairman and CEO Ken Lay has “that innocent childlike look, and I hope the jurors do not fall for it,” says Deborah Perrotta who, along with 21,000 of her co-workers, lost everything when the company went belly up five years ago in a maze of bogus offshore companies, outright lies and fraud.
“When he (Lay) finally found out about all the underhanded deals at Enron, it was too late, but he was not honest with his shareholders and employees,” Perrotta says. “The board also knew, and along with Lay they were able to save some of their stock.” Lay’s reported smoothness and affability were expected to put him in good stead with the jury. But once on the stand for the first time last week, Lay repeatedly “bristled, snarled and quarreled on cross-examination with the federal prosecutor who had secured the indictment against him,” according to The Washington Post. The Post added:
Lay’s unexpected aggression and the government’s portrayal of him as an arrogant elitist who treated his company like his personal bank could damage some or all of whatever good will he may have had with jurors, experts said. The Wall Street Journal put it this way:
He’s been uncharacteristically irascible at times. His defense sometimes seemed caught off guard by bombs lobbed by prosecutors. And finally, the relative simplicity of the case against Mr. Lay has, oddly, seemed to work against him by leaving prosecutors freer to zero in on his credibility.Lay and former CEO Jeff Skilling are on trial in Houston for fraud. Perrotta, who now works for the Texas Federation of Teachers, is watching the trial closely and periodically comments for AFL-CIO Now as the trial progresses. While on the stand, Lay declared he did not know the company he founded was in deep financial trouble. He laid blame for Enron’s demise at the feet of former chief financial officer Andrew Fastow, conspiring short-sellers and financial journalists.“I accept full responsibility for everything that happened at Enron,” Lay said in his first day of testimony. “Having said that, I can’t take responsibility for illegal acts I had no knowledge of.”
But then prosecutors, in cross examination, showed it was Lay’s own son who short-sold thousands of shares of Enron stock in 2001, driving down the stock’s value.“Even employees who were not part of the ‘the Mighty Tower’ [Enron’s executive offices] mentioned their concerns to me about Enron’s finances, and he did not know?” Perrotta says. Lay also disputed the testimony of quite a few individuals who testified against him, including former Vice President Sherron Watkins, who said she sent Lay a memo warning of a looming accounting scandal. Lay said he was not aware of her concerns before he met with her in August 2001, just four months before the company declared bankruptcy and laid off workers.
“I have a loss for words; how can he blatantly deny her testimony,” Perrotta adds. “Why would she make these accusations—she had nothing to gain. Even Lay said she was serious-minded and credible in his testimony.” Perrotta also has no sympathy for Lay’s financial problems. Lay said he made more than $100 million in cash and stock gains in 2000. Since Enron collapsed, Lay said he and his wife sold three houses in Galveston, Texas, and three in Aspen, Colo. Lay, whose defense has cost nearly $23 million, said he now is worth negative $250,000—and still owes $7.5 million to Enron for money he borrowed from a corporate revolving credit account.
“Is he still living in his $7 million dollar penthouse? Drive the same expensive cars? How much money did he put in his children’s name before the collapse? I don’t feel sorry for him at all,” says Perrotta, who was unable to make mortgage payments after she lost her job at the same time her husband lost his. “How can he say he’s lived a nightmare? Those of us who lost everything are in a nightmare, not him and his rich friends,” Perrotta adds.
by James Parks |
