Tags: Lay's | Rotten | Egg

Lay's A Rotten Egg

Monday, 04 February 2002 12:00 AM

A statement issued on his behalf by his lawyers points to statements made on Sunday by the chairmen of the Senate and House committees set to hold hearings on Monday. Attributing a "prosecutorial" prejudice to Sen. Byron Dorgan, D-N.D., and Rep. Billy Tauzin, R-La., Lay has now declined to appear before the people’s representatives.

Having originally committed to testifying voluntarily – without the protections of immunity – Lay apparently got cold feet after Dorgan and Tauzin spoke of the obvious criminality on the part of Enron’s top executives.

Meanwhile, the Enron board has issued its report of the fiasco, which places blame squarely in the executive suite. One has to wonder what the board had been doing in its own fiduciary role to protect investors over the past year or so. Talk about closing the barn door after the animals have left! As a general matter, the conduct of boards of directors should also be questioned as all too often there seems to be too much rubber-stamping of management decisions and not nearly enough arms-length assessment on behalf of shareholders.

In a situation that continues to spiral wildly downward, Lay’s decision to cancel his appearance comes on the heels of his wife’s Hillaryesque appearance on NBC’s "Today Show" last week, at which time she attempted to engender mercy and pity for the Lays’ "plight” but instead managed to attract even more scorn and dismay.

Having personally benefited largely from the fact that employee shareholders of Enron stock were prohibited from trading their temporarily frozen retirement accounts, the Lays reaped millions as they cashed out their own stock options at favorable prices.

What’s even worse, it is now apparent that several non-employee Lay relatives were also beneficiaries of the very accounting gimmicks that artificially and falsely inflated the price of Enron stock, through holdings in questionable partnership arrangements.

Lower than low doesn’t even begin to describe the cynical – and likely criminal – depths that Lay and his cohorts went to in order to stiff thousands of Enron employees, many of whom have seen their life savings literally disappear before their eyes in a mere matter of months. The same effect was felt by countless other investors in Enron stock.

Lay seemingly purposely misled investors – in presentations to employees caught on videotape and also via several e-mail messages – by making overly positive forward-looking statements about the stock’s performance at a time when he and others knew otherwise and were cashing out themselves.

In a move that is well within his legal rights, Lay nonetheless has only made the Enron situation even worse by pulling out of his appearance in Washington, which has already caused ever more speculation as to what he's now trying to hide.

In retrospect, the statements of both Dorgan and Tauzin seem so laced with prejudice as to render the impartiality of the hearings a virtual impossibility, an unfortunate posture for a quasi-judicial inquiry to have prior to the public taking of any testimony.

But nothing can absolve the shady conduct of Kenneth Lay, which reeks worse than that of a rotten egg, and whose lasting effect is far more damaging. All of which provides a compelling reason to enact the necessary reforms to prevent such corporate and accounting irresponsibility in the future.

Dan Frisa represented New York in the United States Congress and served four terms in the New York State Assembly. E-mail Dan:

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A statement issued on his behalf by his lawyers points to statements made on Sunday by the chairmen of the Senate and House committees set to hold hearings on Monday. Attributing a prosecutorial prejudice to Sen. Byron Dorgan, D-N.D., and Rep. Billy Tauzin, R-La., Lay has...
Lay's,Rotten,Egg
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2002-00-04
Monday, 04 February 2002 12:00 AM
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