Indictment of Enron's Lay Seen Next Week
Fri Jul 2, 4:07 PM ET
WASHINGTON (Reuters) - Former Enron Corp. (Other OTC:ENRNQ - news) Chairman Ken Lay is expected to be indicted next week over his role in the scandal that rocked corporate America, sources familiar with the matter said on Friday.
While a last-minute delay was still possible, federal authorities involved with the U.S. Justice Department (news - web sites)'s Enron Task Force expect a federal grand jury next week will return an indictment of Lay, the sources said.
The sources would not discuss what charges might be brought against Lay.
Lay, 62, guided Enron for years, shaping the once-obscure pipeline company into the nation's seventh-largest corporation and a world-leading energy trading concern.
Lay's lawyer, Michael Ramsey, told Reuters the government lacked the evidence to win an indictment from a grand jury, and said an internal dispute at the Justice Department had triggered the recent leaks about impending charges.
"I don't think there's going to be an indictment. I think the Task Force is leaking in order to put pressure on Washington" to seek charges, he said.
Ramsey said he met with Enron Task Force officials last week to discuss media reports that an indictment would be handed down soon, but he declined to comment on the specifics of the meeting.
Enron collapsed in a massive scandal in 2001 after the Wall Street darling's abuse of off-the-books partnerships to hide billions of dollars of debt and inflate profits became known.
Prosecutors have tapped former Enron employees for information about its inner workings, including former Chief Financial Officer Andrew Fastow. He agreed to cooperate with investigators in exchange for a 10-year prison sentence.
Lay -- a political ally of President Bush (news - web sites) and his father, former President George H. W. Bush -- returned to Enron's chief executive post after Jeff Skilling resigned, shortly before the company imploded in late 2001.
Skilling pleaded not guilty in February to counts of fraud, insider trading and misrepresenting Enron's finances.
The fall of Enron touched off investigations that uncovered widespread financial fraud in corporate America and caused the high-flying energy trading industry to collapse.
Spokesmen for the Justice Department and the U.S. Securities and Exchange Commission (news - web sites) declined to comment. (Additional reporting by Matt Daily in Houston)
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