Lay's Family Is Financially Ruined, His Wife Says
The New York Times
THE EX-CHAIRMAN
January 29, 2002
By ALESSANDRA STANLEY and JIM
YARDLEY
It's gone. There's nothing left.
Everything we had mostly was in
Enron stock."
Such sorrowful words have lately
become all too common in television
news reports. But the woman tearfully
sharing her anguish on the "Today"
program yesterday morning was Linda
Lay, the wife of Kenneth L. Lay, who resigned last week
as chief executive of the Enron Corporation.
Only the lush backdrop of Oriental carpets and wood paneling and an occasional
verbal incongruity ("We are fighting for liquidity") clashed with Mrs. Lay's message
that she and her husband and children were also deceived, pitiable victims of
Enron's collapse.
She described the family as financially ruined, and said all its property "other than
the home we live in" was for sale.
Mrs. Lay's defense of her husband's reputation may have been a kind of first for
the business world, breaking new ground previously reserved for politicians and
celebrities. The interview, in the living room of the Lays' Houston home, combined
the political boldness of Bill and Hillary Clinton's 1992 interview about his
dalliance with Gennifer Flowers and the pathos of talk-show appearances by
Tammy Faye Bakker. If nothing else, it lay the groundwork for a family-led public
relations campaign to humanize Mr. Lay before his Congressional testimony,
scheduled to begin next week.
Mr. Lay enlisted another ally in that effort yesterday as he
met with the Rev. Jesse Jackson at Enron headquarters in
Houston. After counseling Mr. Lay privately, Mr. Jackson,
speaking to reporters, likened him to Job.
In her interview, with Lisa Myers of NBC News, Mrs. Lay
portrayed her husband as a victim of other executives'
deceit.
"There's some things that weren't - that he wasn't told,
Lisa," Mrs. Lay said in answer to a question about the
many criminal investigations hanging over him. "Never,
never, not for one second, would he have allowed anything
to go on that was illegal. If those people had come back to
him and told him there was something wrong, he would
have stopped it and fixed it."
This morning the "Today" program will broadcast the
second half of the interview, including Mrs. Lay's
description of the family's relationship with the Bush
family. Ms. Myers said Mrs. Lay had explained that the
Lays were closest to the president's father, George Bush,
who, Mrs. Lay told her, reached out to them to express
private sympathy after the company had collapsed.
In the Enron scandal, victims can be found in places as
lofty as Capitol Hill and the White House. Senator Phil
Gramm, Republican of Texas, whose wife was on the
Enron board, says she lost $600,000 in deferred
compensation.
"Relatively speaking - and I know there are people in
Houston who lost a lot more - but that's a lot of money,"
the senator told The Dallas Morning News.
Even President Bush, who has sought to distance himself
from his longtime friend and campaign donor Mr. Lay,
casts himself on the side of downtrodden Enron
stockholders, saying his own mother-in-law lost $8,000 by
investing in the company.
Asked in the interview how she responded to employees
who lost their life savings through 401(k) and other
investments in Enron, Mrs. Lay said of her own family, "We've lost everything."
"But I don't feel Ken's betrayed me," she added. "I'm sad, I'm desperately sad, but I
don't know where to place the anger. I don't know who to get mad at. I just know
my husband didn't have any involvement."
Public relations experts described Mrs. Lay's defense as a bold but risky move.
"When you put out a spouse to defend you, it can be very effective, but you have to
be very, very careful," said Paul Costello, who was press secretary to Rosalynn
Carter when she was first lady. "People can see it as a desperate or cynical move."
In this case, Mr. Costello said, he detects mostly the former. "She was moving," he
said. "It may have been manufactured and manipulated, but it did not seem
untruthful."
Mrs. Lay, who is Mr. Lay's former secretary and second wife, runs her own real
estate development company in Houston and serves on boards of charitable
organizations. In the interview, she expressed herself with poise between bouts of
tears.
The interview was taped on Saturday, the day after J. Clifford Baxter, former Enron
vice chairman, was found dead, an apparent suicide. Mrs. Lay described her
husband as a "moral human being, who would do absolutely nothing wrong," and
said press reports had contributed to Mr. Baxter's death.
"My husband had spoken to him not too long ago, and Cliff is a - was a wonderful
man," she said. "It's a perfect example of how the media can play such havoc and
destruction of people's lives. And this is the ultimate. This is a loss of life. This is
something you can't get back."
NBC was one of many news organizations seeking to interview Mr. Lay and his
family. His sister Bonnie Bourne did her part to humanize him by giving Newsweek
magazine some family snapshots, including those of the family on skis and a
bare-chested Mr. Lay playing croquet with his son Mark.
To help prepare for the NBC interview, the Lay family turned to M. A. Shute,
49-year-old former chief of Hill & Knowlton's Houston office, who had entered
semiretirement with her husband and spent much of the last two years on their
35-foot catamaran. The Saturday before last, she called her friend Sharon Lay, Mr.
Lay's sister, to see how the family was bearing up.
"She said, `My gosh, M. A., we've been looking all over for you,' " Ms. Shute
recalled. " `This has really gotten out of hand, and we need some help.' "
So Ms. Shute, who had done public relations work for Enron while at Hill &
Knowlton, boarded a plane for Houston last Tuesday and arrived to find a Lay
family under siege by reporters. They had one informal session to hone the
message and scheduled the taping for Saturday.
"It was really timely," Sharon Lay said. "I thought it was a very good time to hear
the other side of the story, and the personal side of the story about Ken as a man
who has tremendous integrity and a man who is extremely generous."
"It has been a nightmare for the family, and financially devastating as well," she
said. "We all had stock, and we all rode it right down to the bottom."
"This family is not immune to the hurt and financial devastation either," Sharon
Lay added. "We've all suffered right along with everyone else."
Kenneth and Linda Lay have five children, all young adults and all from previous
marriages, who gathered for the NBC cameras in the living room to testify to his
probity.
"He's probably the most generous, ethical, giving man that I've ever met," one son
said.
Perhaps because of editing constraints, the next remark undercut that one a little.
"Obviously," a daughter said, "if he knew that something was going on with the
company, he would have cashed, you know, all of - all of his stocks."
Reactions to the interview around Houston were mixed. Some people expressed
sympathy for Mrs. Lay; others were more skeptical.
Having read an account of the interview that described the Lays as almost broke, a
32-year-old insurance broker who said his wife had worked at Enron and recently
been laid off found it "hard to believe that a C.E.O. would not have any kind of
assets."
The man, who would give his name only as Richard L., added, "I sort of found that
hard to believe that a top executive wouldn't know how to manage his own money."
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