2006/04/25

Lay claims "witch hunt" brought Enron down

By Matt Daily
Tue Apr 25, 1:55 PM ET

HOUSTON (Reuters) - Enron Corp. was a victim of a "witch hunt" that unfairly criticized the giant energy company's business and drove it toward bankruptcy, former Chairman and Chief Executive Kenneth Lay testified at his criminal trial on Tuesday.

In his second day on the witness stand, Lay told the jury that in October 2001 the Wall Street Journal had reported that Enron had engaged in dubious deals through partnerships operated by Enron's former Chief Financial Officer Andrew Fastow.

"We thought in fact the Wall Street Journal was on a witch hunt," Lay said under questioning from his lawyer George "Mac" Secrest. "We didn't have any information that Andy Fastow had done anything inappropriate."

Lay, 64, is on trial with former CEO Jeffrey Skilling on charges that they hid from investors the decaying financial state of a company that was once the seventh largest in the United States.

The Wall Street Journal articles were the first to scrutinize the Fastow partnerships, which Enron used to hide billions of dollars in debt while inflating its profits. Those articles and the intense media coverage that followed helped drive the company into its December 2001 bankruptcy, then the largest in U.S. history.

Still, Lay said, the company believed that Fastow's deals were legitimate and that any problems with them had been solved through an asset write-down that quarter and Fastow's break with the controversial LJM partnership months before.

"They had been reviewed and scrubbed quarterly since they were put in place by Arthur Andersen. We thought all that had become history, and it was now news," Lay said.
Auditor Arthur Andersen imploded and ceased accounting services after it was charged with wrongdoing at Enron. The company was found guilty of obstruction of justice, although that conviction was later overturned.

Lay faces six counts of conspiracy and fraud linked to the few months he returned to the CEO position abandoned by Skilling before the company collapsed, while Skilling faces 28 charges of conspiracy, fraud and insider trading.

Both men have denied any wrongdoing and would face decades in jail if found guilty.
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So lets see if we understand this, If it wasn't for someone actually carring enough to investigate, something that was obviously fishy, none of this would have ever happened. That bastard!!! We should hang him by the short hairs, who does he think he is, causing this big mess, by reporting the truth!! For Shame!!!!

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