A leading figure in what was then the biggest corporate collapse in American history three years ago, is to be indicted Thursday morning in Texas. The charges are against former Enron chief executive Kenneth Lay, who says he was not aware of the fraud that occured in his company and is expected to plead not guilty.
Mr. Lay has been the central figure in the Enron scandal. At age 62, Mr. Lay created the energy trading company from a small Texas based pipeline firm. Once the toast of Wall Street, the now disgraced former Enron chairman is being charged with securities fraud and insider stock trading.
Enron collapsed in late 2001, after revelations that its accounting was fraudulent, with millions of dollars of losses presented as profits. The fast-growing and then-highly respected company, saw its stock price collapse, costing investors billions of dollars. When Enron was forced into bankruptcy, over 5,000 jobs were lost, most of them in the Houston area.
The government investigation of the Enron scandal has been going on for over two years. Last February, former Enron chief Jeffrey Skilling was charged with fraud and similar charges were filed against Andrew Fastow, the company's chief financial officer. Mr. Fastow has pleaded guilty. Mr. Skilling is awaiting trial. The Enron scandal also brought down the accounting firm of Arthur Anderson, the firm's auditor which raised no alarms about Enron's shady practices.
Mr. Lay had been paid over $8 million by Enron in 2000. Once regarded as the most powerful business person in Houston, as well as influential in U.S. politics, he was a principal donor to the 2000 presidential campaign of President Bush.
Mr. Lay recently reflected on the demise of the company he built. "I wish what happened hadn't happened. But we can't redo history now. And the main thing I've always prayed for from day one is that all the truth come out," he said.
Enron's collapse was a year later in 2002 overtaken in size by the bankruptcy of WorldCom, then the second biggest U.S. telecommunications company. Congress subsequently passed legislation aimed at remedying the accounting failures by requiring U.S. companies to implement more rigorous financial controls.