In Houston, A Cry From The Heart
Tuesday January 29
Forbes.com
By Dan Ackman
Is Enron a machine that ran itself?
Yesterday, Linda Lay, wife of Kenneth Lay, Enron's chairman and chief executive until days ago, said he did not know what was going on at the company. Jeffrey Skilling, long Lay's underboss and briefly the CEO, has, through a spokesman, said he didn't know either. Did Andrew Fastow, the chief financial officer until he was fired in October, know? He isn't talking, but his spokesman says the Enron board of directors approved every partnership he and others formed, including those managed by Fastow himself. No one on the board is talking.
The weepy Linda Lay told NBC's Today Show, "There's some things that weren't--that he wasn't told." But along with ignorance came innocence: Her husband is an "honest, decent, moral human being who would do absolutely nothing wrong,'' Lay said. "Never, never, not for one second would he have allowed anything to go on that was illegal."
Lay also said that her family's wealth was tied up in Enron's stock and that they were "fighting for liquidity," which may mean, in the language unique to Enron, broke, but may mean something else entirely.
Is this the final Oprah-ization of America? The interview with the wife was instantly a subject of debate between public relations experts. But could it also be fodder for lawyers? While a wife generally cannot be made to testify against her husband, could Linda Lay's comments be deemed a waiver that would make her subject to cross-examination by prosecutors or lawyers who might be seeking to recover assets or cash from her husband?
While chatting on the Today Show may be cathartic and uplifting, being interrogated by lawyers whose eyes are on the money rather than the Nielsen ratings can be considerably less so.
Enron Enron's Endgame Current Reuters news on Enron If Kenneth Lay himself maintains his ignorance, the question will become, first, whether that claim is true, and, second, whether he was willfully blind. Much has been made about the letter he received from Sherron Watkins, an Enron vice president, warning him of a possible accounting scandal. In response, lay ordered an investigation, but also that the investigators not second-guess the accountants.
The lawyers relied on the accountants from Arthur Andersen , who relied in turn on approvals from the board. Meanwhile, the investigating attorneys failed to question Skilling or Lay. They were also employed by the same law firm, Houston's Vinson & Elkins , that helped structure so much of Enron's business in the first place. (See: "Enron's Lawyers: Eyes Wide Shut?")
In related Enron news, President George W. Bush backed Vice President Dick Cheney's refusal to turn over documents detailing any involvement by Enron and other companies in the drafting of White House energy policies.
"Enron made contributions to a lot of people around Washington, D.C., and if they came to this administration looking for help, they didn't find any," Bush said. But Democrats in Congress argue that what help Enron received--or would have received had Cheney's energy task force proposals become law--is very much at issue.
Enron and its executives were among the president's biggest financial backers in the 2000 presidential campaign and in his Texas gubernatorial campaigns. Its representatives met six times last year with Cheney or staff involved in crafting the energy plan, which has largely been shelved in the face of opposition in the Democratic-controlled senate and as a result of declining energy prices.
Meanwhile, the head of Andersen said yesterday that the accounting firm would survive, despite having lost business because of its association with Enron. The firm, alone among the major players, has accepted at least some responsibility for its actions. [See "Crime And Cover-Up.")
"We will survive," Andersen CEO Joseph Berardino told a news conference at the company's headquarters in Chicago. "People know us. People respect us. Will we lose business? Absolutely."
"People need to focus more on the fact the business failed because this [Enron] management made investments and those investments did not work out,'' Berardino added. "Accounting issues did not cause Enron's stock price to fall--its failed business model did.''
Who was responsible for that business model? Apparently no one. |
