Questions, Emotions Arise from Death of Enron Founder

By Kevin Sweeney
July 7, 2006 04:54 PM

As the shock subsided from news of the death of Enron founder Kenneth Lay this week, business reporters had a myriad of angles to explore for their readerships.

Lay, the former chief of Enron, who was recently convicted of fraud and conspiracy related to the elevation of the energy company's share price, died of a massive heart attack Tuesday.

With thousands of workers who lost retirement savings following the collapse of Enron, employees had varied reactions to the news. The Chicago Tribune featured some thoughts from former workers.

"Charles Prestwood, 67, a longtime Enron employee who lost his entire $1.3 million retirement savings when the company's stock collapsed, said he saw some measure of divine justice in Lay's death," senior Tribune correspondent Howard Witt writes. "Others said that Lay's death, by sparing him and his family the ordeal of what would likely have been a long prison sentence, might have been a blessing in disguise."

Experts weighed on what Lay's death meant for his record and reporters put that into perspective. The Houston Chronicle's Tom Fowler, John Roper and Mark Babineck laid out these details.

"Lay had not been sentenced and he had barely begun working on his appeal," according to the Chronicle article. "So, rather than allow the appeal to proceed without the defendant, the court will throw out both the verdict and the indictment, leaving Lay's record as if he were never even charged, said Richard Barnett, a San Diego lawyer who specializes in forfeiture issues."

The question over Lay's estate and the government's bid to seize his assets has been a contentious issue. With the conviction likely to be vacated, Greg Farrell of USA Today reports that although such a bid may come to a halt, there is a window open.

"But even if government prosecutors can no longer follow through on their motion to collect more than $43 million from Lay, that doesn't mean that plaintiffs' lawyers or attorneys from the Securities and Exchange Commission can't go after his wealth," the article says. "Houston lawyer Thomas Ajamie says that for plaintiffs' lawyers, "It's a little easier to get at that money now that he's deceased, because the government's not going to go after it."

Fortune editor-at-large Bethany McLean ponders the legacy of Lay in his death. McLean, who has presented at several Reynolds Center workshops, co-authored The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron.

"Back in January, when the trial began, it was obvious that both Lay and (Jeff) Skilling wanted not just a "not guilty" verdict, but redemption," McLean writes. "They both sought to rewrite the Enron story as that of a good company brought down by a hungry press and profiteering short sellers.

"But Ken Lay's chance at writing another chapter is now over. It remains to be seen, though, if his death softens some of the anger toward him, both in his hometown of Houston and elsewhere."

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