Kenneth Lay

Kenneth Lay

Mugshot of Lay upon his arrest in 2004
Born Kenneth Lee Lay
(1942-04-15)April 15, 1942
Tyrone, Missouri, U.S.
Died July 5, 2006(2006-07-05) (aged 64)
Snowmass, Colorado, U.S.
Occupation Businessman
Political party Republican[1][2]
Spouse(s) Linda Lay
Judith Ayers[3]
Children Elizabeth Ayers Lay Vittore
Mark Kenneth Lay
Robyn Anne Herrold Lay Vermeil
Todd David Herrold
Robert Ray (Beau) Herrold[3]

Kenneth Lee "Ken" Lay (April 15, 1942 – July 5, 2006) was an American businessman. He was the CEO and chairman of Enron Corporation for most of its existence and is a central figure in the Enron scandal. Lay was indicted by a grand jury[4] and was found guilty of 10 counts of securities fraud.[5] Lay died while vacationing, three months before his October 23 sentencing.[6] A preliminary autopsy reported Lay had died of a heart attack caused by coronary artery disease and his conviction was vacated.[7][8]

Early life

Lay was born in the Texas County, Missouri town of Tyrone, the son of Ruth (born Rees) and Omer Lay.[9] He moved to Columbia, Missouri and attended David H. Hickman High School and the University of Missouri where he studied economics, receiving a B.A. in 1964 and an M.A. in 1965. He served as president of the Zeta Phi chapter of the Beta Theta Pi fraternity at the University of Missouri. He went on to earn his Ph.D. in economics from the University of Houston in 1970 and soon after went to work at Exxon Company, USA.

Career

Lay worked in the early 1970s as a federal energy regulator. He became an undersecretary for the Department of the Interior and returned to the business world as an executive at Florida Gas Transmission. By the time energy was deregulated in the 1980s, Lay was already an energy company executive and he took advantage of the new climate when Omaha-based Internorth bought his company Houston Natural Gas and changed the name to Enron in 1985.[10] He was also a member of the board of directors of Eli Lilly and Company and a director at Texas Commerce Bank.

Lay was a friend of the Bush family including Vice President George H. W. Bush. He made monetary contributions, led several committees in the Republican Party and was co-chairman of Bush's 1992 re-election committee.[11] As President, Lay flew Bush and his wife to Washington on an Enron corporate plane.[12] In December 2000, Lay was mentioned as a possible candidate for President Bush's Treasury Secretary.[13]

From 1989 to 2002, his political contributions totaled $5.8 million, with 73% going to Republicans, and 27% going to Democrats.[2] From 1999 to 2001, he gave $365,410 to the Republican Party.[1]

In 1999 Lay was one of America's highest-paid CEOs with a $42.4 million compensation package.[14] Lay liquidated more than $300 million in Enron stock from 1998 to 2001, mostly in stock options.[15][16]

Enron Bankruptcy

Lay's company, Enron, went bankrupt in 2001. At the time, this was the biggest bankruptcy in U.S. history. In total 20,000 employees lost their jobs and in many cases their life savings. Investors also lost billions of dollars. On July 7, 2004, Lay was indicted by a grand jury in Houston, Texas, for his role in the company's failure. Lay was charged, in a 65-page indictment, with 11 counts of securities fraud, wire fraud, and making false and misleading statements. The trial commenced on January 30, 2006, in Houston. [5]

During his trial, Lay claimed that Enron stock made up about 90 percent of his wealth, and that his net worth (in 2006) was in the negative by $250,000. He insisted that Enron's collapse was due to a conspiracy waged by short sellers, rogue executives, and the news media.[17][5] On May 25, 2006, Lay was found guilty on six counts of conspiracy and fraud by the jury. In a separate bench trial, Judge Lake ruled that Lay was guilty of four additional counts of fraud and making false statements. Sentencing was scheduled for September 11, 2006 and rescheduled for October 23, 2006.[18]

Death

Lay died on July 5, 2006, while vacationing in Colorado. The Pitkin Sheriff's Department confirmed that officers were called to Lay's house in Old Snowmass, Colorado, near Aspen at 1:41 am MDT. Lay was taken to Aspen Valley Hospital, where he was pronounced dead at 3:11 am MDT. The autopsy indicated that he died of a heart attack brought on by coronary artery disease, and found evidence that he had suffered a previous heart attack.[6]

A private funeral for about 200 people was held in Aspen four days after his death. His body was cremated and his ashes were buried in an undisclosed location in the mountains.[19][20][21] A memorial service was held a week after his death at the First United Methodist Church in Houston. It was attended by 1,100 guests including former President George H. W. Bush.[22]

Legacy

On October 17, 2006 his conviction was vacated due to pending appeals of guilt.[23][24][25] The government opposed Lay's attorneys' motion, and the Department of Justice issued a statement saying it remained "committed to pursuing all available legal remedies and to reclaim for victims the proceeds of crimes committed."[26][27][28]

Lay left behind “a legacy of shame” characterized by “mismanagement and dishonesty.”[29] Condé Nast Portfolio ranked Lay as the 3rd worst American CEO of all time.[30] His actions were the catalyst for subsequent and fundamental corporate reform in regard to “standards of leadership, governance, and accountability.”[29]

Personal life

At the time of his death Lay had been married to his second wife whom he married in 1982. He had two children, three stepchildren, and twelve grandchildren.[3][31]

See also

References

  1. 1 2 "Ken Lay Biography and Political Campaign Contributions". Campaign Money. Retrieved 17 October 2015.
  2. 1 2 "Follow the Enron Money". CBS News. 12 January 2012. Retrieved 17 October 2015.
  3. 1 2 3
  4. ↑ Crawford, Kristen (2004-07-12). "Lay surrenders to authorities". CNN Money. Retrieved 2010-03-02.
  5. 1 2 3 Pasha, Shaheen and Jessica Seid (2006-05-25). "Lay and Skilling's day of reckoning". CNN Money. Archived from the original on 2010-10-18. Retrieved 2010-03-02.
  6. 1 2 Mulligan, Thomas S.; Bustillo, Miguel (July 6, 2006). "Death Puts Lay Conviction in Doubt". Los Angeles Times. Retrieved 2010-03-02.
  7. ↑ Fowler, Tom (17 October 2006). "Judge vacates conviction of Ken Lay". Associated Press. Retrieved 2010-03-02.
  8. ↑ United States v. Lay, Criminal Action No. H-04-0025, 456 F.Supp.2d 869 (S.D. Tex. 2006), at .
  9. ↑ Handbook of Texas Online. Retrieved 2010-03-02.
  10. ↑ "Dr. Kenneth Lee Lay Obituary". Houston Chronicle. Retrieved 26 July 2016.
  11. ↑ Commentary: Ken Lay's Audacious Ignorance. Businessweek (2006-02-05). Retrieved on 2013-07-12.
  12. ↑ Bajaj, Vikas; Eichenwald, Kurt (July 6, 2006). "Kenneth L. Lay, 64, Enron Founder and Symbol of Corporate Excess, Dies". The New York Times.
  13. ↑ OsterDowJones. (Dec. 14, 2000) Who will Bush pick to run Treasury?
  14. ↑ "Kenneth Lay: Bush Pioneer". Texans for Public Justice. Retrieved 2010-03-02.
  15. ↑ Ackman, Dan (February 2, 2002). "Lay Lays an Egg". Forbes.com. Retrieved 2010-03-02.
  16. ↑ Johnson, Carrie (10 June 2006). "A Woman of Conviction". Washington Post. Retrieved 17 October 2015.
  17. ↑ Jeremy W. Peters and Simon Romero (5 July 2006). "Enron Founder Dies Before Sentencing". The New York Times. Retrieved 2010-03-02.
  18. ↑ Shaheen Pasha (5 July 2006). "Enron founder Ken Lay dies". CNN. Retrieved 2010-03-02.
  19. ↑ Moreno, Sylvia (July 13, 2006). "Lay Is Remembered As a 'Straight Arrow'". The Washington Post. Retrieved 2010-03-02.
  20. ↑ "Lay victim of `lynching,' speaker at service says". The Chicago Tribune. July 13, 2006. Retrieved 2006-07-13.
  21. ↑ "Ken Lay's memorial attracts power elite". CNN. July 12, 2006. Retrieved 2006-07-13.
  22. ↑ "Enron's Kenneth Lay Defended at His Memorial Service". Bloomberg. July 12, 2006. Retrieved 2010-03-02.
  23. ↑ "Judge Vacates Conviction". The New York Times. October 17, 2006. Retrieved 2006-10-17.
  24. ↑ "Experts See Lay's Death Erasing Conviction". The New York Times. July 7, 2006. Retrieved 2006-06-07.
  25. ↑ Engber, Daniel (July 6, 2006). "Can't the Feds Get Lay's Money?". Slate.com. Retrieved 2010-03-02.
  26. ↑ Hays, Kristen (August 16, 2006). "Prosecutors to oppose wiping Lay's record clean". Chicago Sun-Times. Retrieved 2006-08-16.
  27. ↑ Associated Press (August 16, 2006). "Prosecutors will oppose clearing Lay's record, filing says". USA today. Retrieved 2010-03-02.
  28. ↑ Pasha, Shaheen (July 5, 2006). "Enron founder Ken Lay dies". CNN.com. Retrieved 2010-03-02.
  29. 1 2 Morrison, Mark (July 4, 2006). "Ken Lay's Dark, Ironic Legacy". Bloomberg. Retrieved June 14, 2016.
  30. ↑ Portfolio.com staff (30 April 2009). Portfolio's Worst American CEOs of All Time. CNBC
  31. ↑ "Biography: Ken Lay". biography.com.
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