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Enron's Lay fights back
Former Enron chief tells Larry King he's responsible for Enron, but not for hidden criminal conduct.
July 12, 2004: 9:12 PM EDT

NEW YORK (CNN/Money) - Former Enron Corp. Chairman and Chief Executive Kenneth Lay said Monday in a television interview that he takes full responsibility for events at Enron -- both the positive and negative -- but denies he is to blame for criminal conduct that caused the collapse of the Houston energy giant.

"I take responsibility for what happened at Enron, both good and bad, but I cannot take responsibility for criminal conduct that I was not aware of," Lay said on CNN's "Larry King Live."

Lay told King that he knew a lot about Enron's operations when he was the company's chairman and CEO. "But keep in mind that Enron was a company with about 30,000 employees in about 30 different countries around the world," he told King. "You have to delegate quite a bit of authority to your senior officers."

Lay was indicted last week on 11 counts of wire, bank and securities fraud and making false statements to banks. The former Enron chief pleaded not guilty to all charges and was released on $500,000 bail.

In his first prime-time interview since the indictment, Lay blamed former Enron Chief Financial Officer Andrew Fastow for the company's demise, saying Fastow had misled him.

"He (Fastow) was misleading me on the board, as far as the balance sheet and the liquidity position," he said. "I still find it disgusting as to what happened, because of what he did."

The former Enron chief told CNN that he has been a close friend to President Bush, but he acknowledged that they have not been in touch since the collapse of Enron.

"I have intentionally not talked to any of my, what I consider, close political friends in Washington," he said.

Lay said he also served on the board of the Heinz Foundation, the charitable trust administered by Teresa Heinz Kerry, wife of Democratic presidential candidate John Kerry.

Lay told King that he and his legal team would seek a speedy trial and may try to separate his case from the cases of former Chief Executive Officer Jeffrey Skilling and former top accountant Richard Causey. He said he would like to be tried first.

When asked if he fears he might go to prison if convicted, Lay said "I don't fear jail, because I know I am not guilty."

As head of Houston Natural Gas, Lay had executed a 1985 merger that formed the national pipeline giant that became Enron. He was Enron's chief executive for most of the company's history, ceding those duties to Skilling in February 2001 until Skilling abruptly quit in August 2001. Lay stepped back in as CEO until he was forced out in disgrace in January 2002.

The charges come two and a half years after the Justice Department's Enron Task Force began an investigation that has slowly climbed the corporate ladder.

Ken Lay
Larry King

Fastow, who managed the off-books partnerships that struck questionable deals with Enron, pleaded guilty in January in exchange for a 10-year prison term and agreed to cooperate with prosecutors.

The former CFO helped prosecutors bring charges against Skilling, who, under Lay, was the architect of Enron's expansion into the trading of everything from natural gas and electricity to Internet network capacity.

Skilling and Causey were charged together and have both pleaded not guilty to more than three dozen counts of insider trading, fraud and lying on Enron financial statements.

Fastow's wife, Lea, on Monday began serving her one-year sentence in a downtown Houston federal lock-up for a misdemeanor tax charge. She was convicted of signing a bogus tax return to help her and her husband hide illegal or ill-gotten income.  Top of page

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