Lay's faith in Enron -and ours

25 April 2006 By Dan Ackman

Enron s failed boss blamed the company s fall on Andrew Fastow and added short sellers and newsmen to his list of villains. But his testimony shows not the strength of the forces that knocked the structure down, but the failure of its architect.

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Kenneth Lay, longtime chairman and chief executive of Enron, took the stand in his own defence Monday and denied any wrongdoing in the energy giant's collapse.

Lay blamed Enron's 2001 demise on its former chief financial officer and witness for the prosecution, Andrew Fastow, and added short sellers and The Wall Street Journal to the list of those responsible for the company's demise. Borrowing a phrase from former chief Jeffrey Skilling, Lay said that they all provoked a "classic run on the bank," which led to bankruptcy. He also portrayed himself as a man pained and stunned by his current condition, saying he moved from the American dream—great wealth and friendship with presidents—to the American nightmare.

The folksy Lay follows the intense Skilling in the witness chair. His testimony was replete with references to his wife and family and his religious upbringing. Whether the jury accepts their testimony could go a long way toward determining whether he and Skilling are sent to prison for decades.

Before Skilling, a series of government witnesses, including former Enron executives and accountants, have testified that the defendants knew about the company's unstable finances and lied to the investors about them repeatedly.

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