- The Washington Times - Tuesday, May 2, 2006

HOUSTON (AP) — Kenneth L. Lay finished six days of testimony at his federal fraud and conspiracy trial yesterday by professing love for Enron Corp., the company he founded, and the people who worked there.

“I loved Enron very much,” Mr. Lay said in a brief response to the final question from his attorney George Secrest. “And I loved Enron’s employees very much. I spent half my professional life running Enron. I think we built a great company. We changed energy markets around the world.

“I think the most painful thing in my life was watching Enron finally have to go into bankruptcy.”

The comment was similar to his statement at the opening of his testimony last week. As he has during more than a week on the witness stand, Mr. Lay jousted with prosecutor John Hueston, this time over taking responsibility for the implosion of the once-giant energy trading company.

Mr. Lay continued to cite deceit by Chief Financial Officer Andrew Fastow as being “at the heart” of Enron’s collapse.

“Your list of people to blame and events to blame did not include yourself, did it, sir?” Mr. Hueston asked him.

“Did I make mistakes?” Mr. Lay replied. “I’m sure I did, Mr. Hueston. I had to make real-time decisions based on the information I had at the time.”

Mr. Hueston accused Mr. Lay of making self-serving statements, and Mr. Lay replied: “It is just the truth.”

The pair also disagreed over other testimony, such as that of former Treasurer Ben Glisan, who pleaded guilty to conspiracy and testified that Mr. Lay and his co-defendant, former Enron Chief Executive Jeffrey Skilling, knew financial structures that Glisan and Fastow had created were hiding losses at Enron.

Told by Mr. Hueston that Glisan had no reason to lie, Mr. Lay replied: “He did not tell the truth. That I know.”

Under more friendly questioning from Mr. Secrest, Mr. Lay denied prosecution suggestions last week that he was trying to tamper with witnesses when he tried to speak with them.

“I was trying to see if they would meet with my lawyers,” Mr. Lay said.

He said he suggested through a woman who once worked at Enron that he and prosecution witness Vince Kaminski “have a cup of coffee.”

Mr. Lay also added sarcastically, “I guess the FBI will now talk to her.”

He said he was surprised to learn Mr. Kaminski, a former top risk analyst at Enron, was a prosecution witness. Mr. Kaminski told jurors he received a cold response when he suggested to Mr. Lay and other executives in October 2001 that Enron “come clean” on questionable financial structures in the weeks before it filed for bankruptcy protection in December.

Mr. Lay and Mr. Skilling, who testified earlier in a trial now in its 14th week, are accused of repeatedly lying to investors and employees about Enron when they purportedly knew the company’s success stemmed from accounting tricks.

The two men counter that no fraud occurred at Enron other than that committed by a few executives, including Fastow, who stole money through secret side deals. They attribute Enron’s descent into bankruptcy proceedings to a combination of bad publicity and lost market confidence.

In one of the few moments during the entire trial where everyone in the courtroom laughed, including prosecutors and the judge, Mr. Lay yesterday was addressing a comment from his lead attorney, Michael Ramsey, who has been assailed by Mr. Hueston for calling a prosecution witness a “monkey” in front of reporters. Mr. Ramsey has been absent from the trial for weeks recovering from surgery to relieve pressure in an artery.

Mr. Secrest said Monday that the remark was “trained monkey,” not just “monkey.” Yesterday, Mr. Hueston asked Mr. Lay whether that clarification made that slur any better.

“I wasn’t trying to defend my monkey one way or the other,” Mr. Lay said, before realizing his slip of the tongue.

“I’m sure glad Mr. Ramsey’s not here,” he said as the laughter abated.

Following Mr. Lay to the stand was Martin Siegel, a lawyer from New York working for Mr. Lay in a related Enron case, who said his client had been trying to pay off $7 million he owed Enron from a 2001 draw from a company line of credit.

Under questioning from Mr. Lay’s attorney Bruce Collins that drew repeated objections from lead prosecutor Sean Berkowitz, Mr. Siegel said the attempt to repay was hampered by Mr. Hueston, who never responded to documents sent to him.

“The deal died,” Mr. Siegel said.

Mr. Berkowitz, however, suggested the impediment was Mr. Lay’s “horse trading” to retrieve from Enron an insurance policy worth more than $1 million in exchange for the repayment of the loan.

“I don’t know what you mean by horse trading,” Mr. Siegel said.

Mr. Lay then had several character witnesses testify for him, including former Houston Mayor Bob Lanier and retired Adm. George Kinnear, who first met Mr. Lay in the late 1960s when both were teaching at George Washington University. Adm. Kinnear and Mr. Lay later served on the board at Houston’s Compaq Computer Corp.

Both described Mr. Lay as “straight as a string.”

Mr. Lanier, who served six years as mayor of Houston in the 1990s, said he thought Mr. Lay would have been a good mayor.

“I thought he was visionary for Enron, visionary for the city,” Mr. Lanier said.

None of the character witnesses, however, said he was knowledgeable about Mr. Lay’s inner workings at Enron.

Asked by Lay attorney Chip Lewis whether he knew Mr. Lay to be a greedy person, Mr. Lanier, himself a multimillionaire developer, replied: “I don’t think he’s indifferent to money, but in my experience he never showed a greedy side to me.”

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