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Former Enron Chief Pleads Not Guilty - 2004-07-08

Former Enron Corporation Chief Executive Kenneth Lay has pleaded not guilty to charges connected to the financial collapse of the energy trading company he headed. Mr. Lay appeared in a Houston federal court Thursday and was released on payment of a $500,000 bond. The case is part of an effort by U.S. authorities to restore confidence in the stock market and U.S. business in general.

The indictment unsealed in federal court charges Kenneth Lay with 11 counts including conspiracy, wire fraud, securities fraud and bank fraud. In an appearance before reporters in downtown Houston only a couple of hours after his court appearance, Mr. Lay denied any wrongdoing.

"As CEO of the company I accept responsibility for Enron's collapse, however that does not mean I knew everything that happened at Enron and I firmly reject any notion that I engaged in wrongful or criminal activity," he said.

Mr. Lay said he wants a speedy trial so that he can prove his innocence as soon as possible.

In Washington, FBI Director Robert Mueller said that the indictments of Mr. Lay and other former Enron executives are part of an overall attack against corruption in Corporate America.

"The FBI and our partners remain dedicated to investigating corporate fraud at all levels," he said. "The Corporate Fraud Task Force will continue to prosecute corrupt executives. Together, I am confident, that we can continue to restore public confidence in the financial markets that are so important to America's future."

The attorney who heads the U.S. Justice Department's Enron task force here in Houston, Andrew Weissman, rejected Kenneth Lay's claim to innocence, saying he was part of a scheme to defraud Enron investors.

"Ken Lay could have been truthful about what he knew about Enron, but he chose not to be," Mr. Weissman said. "Mr. Lay did not want and did not allow the public to learn what he already knew that Enron, absent criminal schemes, was in dire straits."

The federal investigation of Enron began in late 2001 after the collapse of the company left investors with stock certificates that were practically worthless. The stock had been trading at over $90 a share at one point. Thousands of company employees lost their pension funds as well as their jobs when the company filed for bankruptcy on December 2, 2001. In the following months there were several other corporate scandals, some of which led to successful prosecution of top executives.

In addition to Mr. Lay, prosecutors have also charged his successor as CEO at Enron, Jeff Skilling and several other former executives. Much of the case is based on information provided by former Enron chief financial officer Andrew Fastow, who pleaded guilty to several charges in January and has since been cooperating with prosecutors. Kenneth Lay says Mr. Fastow is himself the chief culprit in the Enron scandal and that he betrayed both Mr. Lay and the company's shareholders by engaging in fraud.