Risk & Compliance

Lay’s Attorney on the Offensive

The lawyer for the former Enron chairman isn't sitting back amid reports that his client may soon be indicted.
Stephen TaubJune 23, 2004

Over the weekend, the Houston Chronicle reported that in about two weeks, U.S. prosecutors will ask a federal grand jury to hand up an indictment of former Enron Corp. chairman Kenneth Lay.

Rather than sit back, Lay’s attorney — Mike Ramsey — has gone on the offensive. Ramsey called a press conference in Houston to tell reporters that Lay knows nothing about the fraud that pushed the energy giant into bankruptcy, and that they have asked to meet with prosecutors in the next two weeks to discuss their probe, reported Bloomberg.

Ramsey said he and Lay have already met with prosecutors four times in the past two and a half years, according to the Chronicle. “Any questions they have, we have an answer for,” said Ramsey. “What issues we talk about is really up to the government.” He added that there is “absolutely no proof that Ken Lay did anything but return to the company and do his best to open the company up.”

He is referring to Lay’s return to the position of Enron’s chief executive officer after Jeffrey Skilling’s abrupt departure in August 2001. Ramsey pointed the finger at Skilling and former chief financial officer Andrew Fastow as the figures behind Enron’s collapse.

Ramsey said that Lay was overseas while Skilling, who was indicted earlier this year for fraud, conspiracy, and insider trading, was running the company and while Fastow ran amuck. “Andy Fastow essentially has said he was running a gang of thieves inside Enron,” Ramsey reportedly said. “There are a lot of things you wish you had done differently. Ken Lay obviously wishes he had never hired Andy Fastow.”

Skilling has pleaded not guilty to 35 felony charges. Fastow has pleaded guilty to two felony charges and has agreed to cooperate with prosecutors.

According to another recent report in the Chronicle, a federal judge ruled that Skilling can have access to half the interest income from the more than $55 million of his cash and property that have been frozen until his trial. This would work out to about $1 million.

The government will keep the other half and add it to the frozen funds, which could eventually be distributed to Enron’s victims.