- The Washington Times - Wednesday, April 26, 2006

HOUSTON (AP) — Enron Corp. founder Kenneth L. Lay’s trademark affability evaporated yesterday when the prosecutor in his fraud and conspiracy trial accused him of witness tampering.

Jurors who had been listening impassively snapped to attention when prosecutor John Hueston asked about calls to several potential witnesses by the ex-chairman and chief executive.

“Did you have any conversations to get your story straight for trial?” asked Mr. Hueston.

“Can you elaborate on that Mr. Hueston?” Mr. Lay shot back. “I’m not sure what story you’re talking about.”

The prosecutor noted that Mr. Lay called two Goldman Sachs & Co. executives during the trial regarding a September 2001 meeting about Enron.

Former Enron Chief Financial Officer Andrew Fastow — whom Mr. Lay has dubbed a traitor, liar and crook — testified that he and Mr. Lay met with the executives to discuss restructuring Enron at the same time Mr. Lay was telling employees and reporters that the company was sound. Mr. Lay says the executives called the meeting to discuss Enron’s vulnerability to a takeover.

Mr. Lay said he called the executives in March — the same month Fastow testified — but he said he didn’t try to align their memories of the meeting with his.

“I was trying to make sure some facts I had about a meeting we had in the fall of 2001 was right. I was just trying to make sure that all of my facts were as accurate as they could be,” he declared, noting further that Fastow “gave a fake version of that meeting.”

Mr. Hueston noted that Goldman Sachs’ attorneys warned Mr. Lay to stop calling the executives directly, a fact to which Mr. Lay glumly replied, “Uh, yeah.”

Mr. Lay, known in Houston for his avuncular, polite persona and who frequently headlined charity events, shed any pretenses to his usual diplomacy when faced with the prosecutor who secured his indictment in July 2004. Mr. Lay’s visible anger and Mr. Hueston’s rapid-fire questioning produced an electricity that has been absent from the trial, even during almost eight days of testimony from his far scrappier co-defendant, former Chief Executive Officer Jeffrey Skilling.

After a short break, Mr. Lay appeared to calm down.

Mr. Lay also acknowledged he tried to contact Vince Kaminski, a former top risk analyst for Enron, nine days before Mr. Kaminski testified for the prosecution. Mr. Kaminski told jurors he got a cold reaction when he told Mr. Lay and other executives in October 2001 that Enron needed to “come clean” on questionable financial structures in the weeks before it crashed into bankruptcy proceedings.

“I was trying to reach Vince Kaminski a long time ago before I even knew he would testify. I was trying to reconnect with Vince, to talk to him about some issues I wanted to talk to him about,” Mr. Lay said.

Mr. Kaminski has been on the prosecution’s witness list since the government released its first version in November. Mr. Lay acknowledged trying to reach Mr. Kaminski March 6 through one of his colleagues. He didn’t say, nor did Mr. Hueston ask, whether he reached Mr. Kaminski.

Under questioning earlier in the day from defense lawyer George Secrest, Mr. Lay insisted he borrowed $77.5 million from Enron in the months before the company imploded to pay personal debt — not because he knew disaster loomed.

Prosecutors have highlighted through witnesses that Mr. Lay, 64, repaid $70 million of those company loans with Enron stock. But the ex-chairman didn’t tell employees or investors about that activity even as he encouraged workers to buy more shares two months before the energy giant sought bankruptcy protection in December 2001.

Mr. Lay told jurors he tried to repay the rest, but Mr. Hueston blocked him from doing so shortly before he was indicted.

Mr. Lay faces six counts of fraud and conspiracy from when he reprised the role of CEO after Mr. Skilling’s abrupt resignation in mid-August 2001. Mr. Skilling faces 28 counts of fraud, conspiracy, insider trading and lying to auditors related to his activities from 1999 to 2001.

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