Misplaced Pages

Kenneth Lay: Difference between revisions

Article snapshot taken from Wikipedia with creative commons attribution-sharealike license. Give it a read and then ask your questions in the chat. We can research this topic together.
Browse history interactively← Previous editContent deleted Content addedVisualWikitext
Revision as of 05:30, 8 June 2006 editWhisperToMe (talk | contribs)Autopatrolled, Extended confirmed users661,366 edits →Trivia← Previous edit Latest revision as of 12:47, 2 December 2024 edit undo152.77.248.51 (talk) His political involvement seems too relevant to not mention in the header 
Line 1: Line 1:
{{Use mdy dates|date=July 2022}}
]
{{Short description|Founder of Enron Corporation (1942–2006)}}
{{redirect|Ken Lay|the Chief Commissioner of Victoria Police|Ken Lay (police officer)}}
{{Not to be confused with|Kenneth Law}}
{{Infobox person
| name = Kenneth Lay
| image = File:Ken_Lay.jpg
| image_caption = Mugshot of Lay upon his arrest in 2004
| birth_name = Kenneth Lee Lay
| birth_date = {{Birth date|1942|4|15}}
| birth_place = ], U.S.
| death_date = {{Death date and age|2006|7|5|1942|4|15}}
| death_place = ], U.S.
| education = {{ubl|] (], ])|] (])}}
| occupation = Businessman
| spouse = {{ubl|Linda Lay|Judith Ayers}}
| children = 5
| signature = Kenneth Lay signature.png
}}


'''Kenneth Lee Lay''' (April 15, 1942 – July 5, 2006) was an American businessman and political donor who was the founder, chief executive officer and chairman of ]. He was heavily involved in ] that unraveled in 2001 into the largest bankruptcy ever to that date. Lay was indicted by a ]<ref name=crawford>{{Cite news | title=Lay surrenders to authorities | url=https://money.cnn.com/2004/07/08/news/newsmakers/lay/ | last=Crawford | first=Kristen | work=] | date=July 12, 2004}}</ref> and was found guilty of 10 counts of securities fraud at ].<ref name=reckoning>{{Cite news | url=https://money.cnn.com/2006/05/25/news/newsmakers/enron_verdict/index.htm |title=Lay and Skilling's day of reckoning | last1=Pasha | first1=Shaheen | first2=Jessica | last2=Seid | work=] | date=May 25, 2006}}</ref> Lay died in July 2006 while vacationing in his house near ], three months before his scheduled sentencing.<ref name=LAT>{{Cite news | title=Death Puts Lay Conviction in Doubt | url=https://www.latimes.com/archives/la-xpm-2006-jul-06-fi-lay6-story.html | first1=Thomas S. | last1=Mulligan | first2=Miguel | last2=Bustillo | work=] | date=July 6, 2006}}</ref> A preliminary autopsy reported Lay died of a heart attack caused by ]. His death resulted in a ].<ref>{{cite news | url=http://www.chron.com/disp/story.mpl/front/4265806.html | last=Fowler | first=Tom | title=Judge vacates conviction of Ken Lay | agency=] | date=October 17, 2006}}</ref><ref>''United States v. Lay'', Criminal Action No. H-04-0025, 456 F.Supp.2d 869 (S.D. Tex. 2006), at .</ref><ref name="DarkSide61">{{cite journal|last=Bratton|first=William W.|title=Does Corporate Law Protect the Interests of Shareholders and Other Stakeholders?: Enron and the Dark Side of Shareholder Value|journal=]|issue=1275|page=61|publisher=]|location=New Orleans|date=May 2002|ssrn=301475|type=PDF}}</ref> ] regarding Lay's death surfaced, alleging that it was faked.<ref>{{cite web | url=https://www.nbcnews.com/id/wbna13864798 | title=Conspiracy theories surround Ken Lay's death | work=]| date=July 15, 2006 }}</ref>
'''Kenneth Lee Lay''' (born ], ]), (a.k.a. '''Ken Lay''') is a former ] ], most notable as the former Chairman and ] of ]. Ken Lay and Enron became synonymous with ] and ] following the collapse of Enron in 2001. Lay was the CEO and chairman of the company from ] until his resignation on ], ], except for a few months in ] when he was chairman and ] was CEO.


Lay left behind "a legacy of shame" characterized by "mismanagement and dishonesty".<ref name="Bloomberg2006">{{cite news | last1=Morrison | first1=Mark | title=Ken Lay's Dark, Ironic Legacy | url=https://www.bloomberg.com/news/articles/2006-07-04/ken-lays-dark-ironic-legacybusinessweek-business-news-stock-market-and-financial-advice | work=] | date=July 4, 2006}}</ref> In 2009 a list posted on ] ranked Lay as the third-worst American CEO of all time.{{efn|Lay was ranked third-worst behind ] at second-worst and ] at worst overall.}}<ref>{{cite web | url=https://www.cnbc.com/2009/04/30/Portfolios-Worst-American-CEOs-of-All-Time.html?slide=19 | title=Portfolio's Worst American CEOs of All Time | work=]| date=April 30, 2009 }}</ref> His actions were the catalyst for subsequent and fundamental corporate reform in regard to "standards of leadership, governance, and accountability".<ref name="Bloomberg2006"/>
On ], ], he was ] by a ] on 11 counts of securities fraud and related charges.<ref name=crawford>{{cite web|title=Lay surrenders to authorities|url=http://money.cnn.com/2004/07/08/news/newsmakers/lay/|accessdate=2006-5-25|last=Crawford|first=Kristen|date=2004-7-12|work=CNN Money}}</ref>. On ], ], following four and a half years of preparation by government prosecutors, ] (on 9 counts against Lay rather than 11) began in ]. After 56 days of testimony and six days of jury deliberation, Lay was found guilty on ], ] of all nine counts against him. The jury convicted Lay of one count of conspiracy, three counts of ], and two counts of ]; in a separate ], Judge ] found Lay guilty on three counts of making false statements to banks and one count of bank fraud. Because each count carries a maximum 5- to 10-year sentence, legal experts say Lay could face 20 to 30 years in prison.<ref name=reckoning>{{cite web|url=http://money.cnn.com/2006/05/25/news/newsmakers/enron_verdict/index.htm|accessdate=2006-5-25|title=Lay and Skilling's day of reckoning|author=Pasha, Shaheen and Jessica Seid|work=CNN Money|date=2006-5-25}}</ref>


Lay was one of America's highest-paid CEOs; between 1998 and 2001, he collected more than $220 million in cash and stock in Enron,
A number of books have been written on Lay and Enron including '']'' (]), ''Icarus in the Boardroom'', ''The Smartest Guys in the Room'' (]), and '']''. ''The Smartest Guys in the Room'' was adapted into a ] entitled '']'', released in 2005.
selling 1.7 million of those shares.<ref>Multiple sources:
*{{cite news | url=https://www.nytimes.com/2002/01/13/business/enron-s-collapse-before-debacle-enron-insiders-cashed-in-1.1-billion-in-shares.html | last=Wayne | first=Leslie | title=Enron's Collapse; Before Debacle, Enron Insiders Cashed In | work=] | date=January 13, 2002 |url-access=subscription }}
*{{cite news | url=https://www.forbes.com/2002/02/05/0205topnews.html | last=Ackman | first=Dan | title=Lay Lays an Egg | work=] | date=February 2, 2002}}
*{{cite news | last=Johnson | first=Carrie | title=A Woman of Conviction | url=https://www.washingtonpost.com/wp-dyn/content/article/2006/06/09/AR2006060901922.html | newspaper=] | date=June 10, 2006}}
*{{cite news | url=https://www.latimes.com/archives/la-xpm-2002-jun-18-fi-enron18-story.html | title=Enron Paid Senior Execs Millions | first1=Thomas S. | last1=Mulligan | first2=Nancy | last2=Riveral Brooks | work=] | date=June 18, 2002}}</ref> However, during his trial in 2006, Lay claimed that Enron stock made up about 90% of his wealth, and that his ] at that time was negative $250,000.<ref>{{cite news | last=Pasha | first=Shaheen | title=U.S., Lay estate ink $12M pension settlement | url=https://money.cnn.com/2006/09/07/news/newsmakers/lay_enron_claim/index.htm | work=] | date=September 7, 2006}}</ref>


==Early life and career== ==Early life==
Lay was born into a poor family in ], ]. His father was a Baptist preacher and some-time tractor salesman. He has been described by his undergraduate classmates at the ] as industrious and high-minded, and served as president of the ] chapter of the ] fraternity at the University of Missouri and got his ] in ] at ] in ].


Lay was born in the ], town of ], the son of Omer and Ruth ({{nee}} Rees) Lay.<ref>. Retrieved March 2, 2010.</ref> Lay's father was a ] preacher and Lay grew up in poverty after the family's ] failed. Later in Lay's childhood, his family relocated to ], and Lay attended ] and the ], where he studied ], receiving a ] in 1964 and a ] in 1965.<ref name=LayBio/><ref name=ChronicleObit>{{Cite web | url=https://www.legacy.com/obituaries/houstonchronicle/obituary.aspx?pid=18370951 | title=Dr. Kenneth Lee Lay Obituary | work=] | date=July 7, 2006}}</ref> He served as president of the ] chapter of the ] fraternity at the University of Missouri.<ref name=ChronicleObit/> He earned a ] in economics from the ] in 1970.<ref name=LayBio/><ref name=ChronicleObit/><ref name=nndbBioLay>{{cite web | title=Ken Lay | url=https://www.nndb.com/people/974/000022908/ | work=] | access-date = January 6, 2018}}</ref>
Lay worked in the early ‘70s as a ]. By the Reagan administration, when energy was deregulated, Lay was already an energy company executive and he took advantage of the new climate by merging ] with Nebraska-based ] to form ].


He worked at ] as an economist from 1965 to 1968 in the Corporate Planning Department.<ref name=LayBio/><ref name=ChronicleObit/><ref name=nndbBioLay/>{{efn|On January 1, 1973, Humble Oil Refining merged with its parent, Standard Oil of New Jersey, to form ].<ref>{{cite news | title=Substitute the name "ExxonCompany, U.S.A." for the name "Humble Oil and Refining Company" | url=https://www.nrc.gov/docs/ML1224/ML12244A281.pdf | work=] | date=December 20, 1972 | access-date=January 6, 2018}}</ref>}} In 1968, Lay entered the ] for the ] where, from 1968 to 1971, he rose to the rank of lieutenant and was the special assistant to the Navy Comptroller and Financial Analyst at the Office of Assistant Secretary of the Navy in the Department of the Navy at ].<ref name=ChronicleObit/>
Lay was one of America's highest-paid CEOs, earning (for example) a $42.4 million compensation package in 1999. Lay sold large amounts of his Enron ] in September and October of ] as its price fell, while encouraging ]s to buy more stock, telling them the company would rebound. Lay ]d more than $300 million in Enron stock from ] to 2001, mostly in ]s.


==Career==
Lay maintained business and political ties to Republican government officials, hiring (for example) ] and ] as they left the Cabinet of President ] (both men lobbied for Enron contracts in the wake of the ]). Lay was a supporter of current president ] for Governor of Texas; in 1999, Bush signed a law deregulating Texas electric markets.
Lay worked from 1971 to 1972 as a technical assistant to commissioner and vice chairman (]) of the ] and served as the energy deputy undersecretary for the United States Department of Interior until 1974.<ref name=LayBio/> In 1974, he returned to the business world as an executive at ]<ref name=LayBio/> and was president of ] from 1981 to 1982.<ref name=ChronicleObit/><ref name=nndbBioLay/> In 1982, he joined Transco Energy Company, owner of the ], in Houston and held the positions of president, chief operating officer and director until 1984 when he became chairman and CEO of the Houston Natural Gas Company.<ref name=ChronicleObit/><ref name=nndbBioLay/>
Bush carried on an extensive personal correspondence with Lay <ref name=bushletters>{{cite web|url=http://www.thesmokinggun.com/archive/bushlay1.html|title=Bush-Lay correspondence}}</ref>
and Bush is reputed to have given Lay the personal nickname "Kenny Boy". <ref name=kennyboy>{{cite web|url=http://msnbc.msn.com/id/12976058/site/newsweek/|title=Kenny Boy, Meet Brownie|accessdate=2005-5-25|date=2005-5-25|last=Fineman|first=Howard|work=Newsweek}}</ref>
<ref name=kennyboy2>{{cite web|url=http://edition.cnn.com/2002/US/02/17/bush.lay/|title=CNN: Bush-Lay letters suggest close relationship}}</ref> Even though Bush uses it, the name originated with Lay's wife.


By the time energy was deregulated in the 1980s, Lay was already an energy company executive and he took advantage of the new climate when Omaha-based ]{{efn|In 1983, Northern Natural Gas, owner of the ]<ref>{{cite news | last=Graham | first=Judith | title=Pipeline retirees in Omaha hurt by Enron collapse: Former subsidiary once was the pride of Nebraska city | url=https://www.chicagotribune.com/2002/02/01/pipeline-retirees-in-omaha-hurt-by-enron-collapse/ | work=] | date=February 1, 2002}}</ref> merged with ]'s Belco Oil & Gas Corporation to become the BelNorth Petroleum Corporation.<ref>{{cite web | title=Belco Oil & Gas Corp. History | url=https://www.fundinguniverse.com/company-histories/belco-oil-gas-corp-history/ | work=fundinguniverse.com | access-date=January 6, 2018 | archive-date=September 18, 2017 | archive-url=https://web.archive.org/web/20170918181350/http://www.fundinguniverse.com/company-histories/belco-oil-gas-corp-history/ | url-status=dead }}</ref>}} bought his company ] and changed the name to ] in 1985.<ref name=ChronicleObit/>{{efn|] purchased Northern Natural Pipeline from Enron in November 2001 and then sold it in July 2002 to ]'s ].<ref>{{cite news | last=Sorkin | first=Andrew Ross | title=Berkshire to Buy a Gas Pipeline From Dynegy | url=https://www.nytimes.com/2002/07/30/business/berkshire-to-buy-a-gas-pipeline-from-dynegy.html | work=] | date=July 30, 2002 |url-access=subscription }}</ref>}}
A Bush 'Pioneer,' Lay became one of the largest individual contributors to the Bush-Cheney 2000 presidential campaign: his donation history shows $651,760 to Republicans, $61,960 to Democrats, and $62,150 to special interests.<ref name=donations>{{cite web|url=http://www.newsmeat.com/ceo_political_donations/Ken_Lay.php|title=Ken Lay's Federal Campaign Contribution Report|accessdate=2006-5-25|year=2002|work=NewsMeat}}</ref> Lay allowed Bush and ] to use his personal Enron jet for transportation during their 2000 election campaign, and served on the Bush-Cheney Transition Advisory Committee. According to ]'s book '']'', he was nearly selected to be ] following Bush's victory in the ]. Ultimately ] was chosen for the position instead.


He was also a member of the board of directors from 1993 to 2001 of ]<ref name=nndbBioLay/> and a director at ].<ref>{{cite book | author1=Roger Stone | author-link=Roger Stone | author2=Saint John Hunt | title=JEB! and the Bush Crime Family: the Inside Story of an American Crime Dynasty | publisher=Skyhorse Publishing | chapter=5: JEB Goes to Venezuela | year=2016 | isbn=978-1510706798 | url-access=registration | url=https://archive.org/details/jebbushcrimefami0000ston }}</ref> In 1996 he held negotiations to replace ] as the CEO of ].<ref name=":0">{{Cite book|last=Eichenwald|first=Kurt|url=http://worldcat.org/oclc/973543262|title=Conspiracy of fools : a true story|date=2005|publisher=Broadway Books|isbn=0-7679-1179-2|oclc=973543262}}</ref>
==Indictment and trial==
On ], ], Lay was indicted by a ] in ] for his role in Enron's collapse. Lay was charged, in a 65-page indictment, with 11 counts of ], ], and making false and misleading statements. ] commenced on ], ] in Houston, despite repeated protests from defense attorneys calling for a change in venue on the grounds that that "it was impossible to get a fair trial in Houston – the epicenter of Enron's collapse. Enron's bankruptcy, the biggest in U.S. history when it was filed in December 2001, cost 4,000 employees their jobs and many of them their life savings. Investors lost billions."<ref name=reckoning/> During his trial, Lay claimed that in 2001 Enron stock made up about 90 percent of his wealth, and that his current net worth (in 2006) was in the negative by $250,000. On ], ] Lay was found guilty on all six counts of conspiracy and fraud by a jury of eight women and four men. In a separate bench trial, Judge Sim Lake ruled Lay was guilty of four counts of fraud and false statements. It was reported that Lay's congenial reputation took a blow as he appeared confrontational and irritable at several points during his testimony.<ref name=reckoning/> Sentencing will take place during the week of ], ].


===Political involvement===
==Education==
Lay was a friend of the ] including former President ]. He made monetary contributions, led several committees in the ] and was co-chairman of Bush's ].<ref>{{ cite news | url=https://www.bloomberg.com/news/articles/2006-02-05/commentary-ken-lays-audacious-ignorance | title=Commentary: Ken Lay's Audacious Ignorance | work=] | date=February 5, 2006}}</ref> As President, Lay flew Bush and his wife to Washington on an Enron corporate plane.<ref>{{cite news | url=https://www.nytimes.com/2006/07/06/business/06lay.html | work=] | first1=Vikas | last1=Bajaj | first2=Kurt | last2=Eichenwald | title=Kenneth L. Lay, 64, Enron Founder and Symbol of Corporate Excess, Dies | date=July 6, 2006 |url-access=subscription }}</ref> In December 2000, Lay was mentioned as a possible candidate for either ] or ] under ].<ref name=":0" /><ref>{{cite news | url=https://www.ft.com/content/3d6dc48e-0c4b-11db-86c7-0000779e2340 | archive-url=https://ghostarchive.org/archive/20221212001228/https://www.ft.com/content/3d6dc48e-0c4b-11db-86c7-0000779e2340 | archive-date=December 12, 2022 | url-access=subscription | url-status=live | title=Obituary: Ken Lay | first=Sue | last=Cameron | work=] | date=July 5, 2006 | access-date=February 18, 2019 }}</ref> He was not nominated because it was decided that the administration already included too many energy businessmen from ].<ref name=":0" />
] - Columbia, MO
*B.A., ], 1964
*M.A., ], 1965
*PhD, ], 1970


Lay additionally had friendly relations with the Republican politicians ], ], and ] as well as the Democratic politicians ] and ]. He encouraged ] to campaign in the ], although this was partially to ensure him as a ] to help Bush win the race.<ref name=":0" />
== Career highlights ==
*1965: Economist, ]
*1969: Assistant professor, ]
*1971: Assistant to a commissioner, ]
*1972: Undersecretary for energy issues, ]
*1974: Vice president, ]
*1976: President, Florida Gas
*1979: Executive vice president, ]
*1981: President, ], ]
*1984: ], ]
*1985: ] formed by merger of Houston Natural Gas and ]
*1990: Chairman of the board and chief executive officer, Enron co-chairman, organizing committee for ] summit
*1992: Co-chairman, ] chairman, ], ]
*1994: Assists with campaign of ] to defeat Congressman ]
*2001: ] becomes CEO of Enron for a few months
*2002: Amid extreme pressure, Lay resigns as Enron CEO, leaves board
*2004: Indicted by grand jury
*2006: Found guilty on nine counts of fraud and conspiracy


From 1989 to 2002, Lay's political contributions totaled $5.8 million, with 73% going to ], and 27% going to ].<ref name=cbsnews-enron>{{cite news | title=Follow the Enron Money | url=http://www.cbsnews.com/news/follow-the-enron-money/ | work=] | date=January 12, 2012}}</ref> From 1999 to 2001, he gave $365,410 to the Republican Party.<ref name=campaignmoney-lay>{{cite web | title=Ken Lay Biography and Political Campaign Contributions | url=https://www.campaignmoney.com/biography/ken_lay.asp | website=Campaign Money}}</ref>
==Trivia==

*The Ken Lay ] in ] in unincorporated ], ] was named after Ken Lay. Lay asked for his name to be removed from the YMCA in ] ]. The YMCA is, as of 2006, called the "Katy Family YMCA" after the city of ].
===Enron bankruptcy and trial===
Lay's company, Enron, went bankrupt in 2001. At the time, this was the biggest bankruptcy in U.S. history. In total, 20,000 employees lost their jobs and in many cases their life savings. Investors also lost billions of dollars. On July 7, 2004, Lay was indicted by a ] in ], for his role in the company's failure. Lay was charged, in a 65-page indictment, with 11 counts of ], ], and making false and misleading statements. The ] commenced on January 30, 2006, in Houston.<ref name=reckoning/>

Lay insisted that Enron's collapse was due to a conspiracy waged by short sellers, rogue executives, and the news media.<ref>{{cite news | title=Enron Founder Dies Before Sentencing | url=https://www.nytimes.com/2006/07/05/business/05cnd-lay.html | first1=Jeremy W. | last1=Peters | first2=Simon | last2=Romero | work=] | date=July 5, 2006 |url-access=subscription }}</ref><ref name="reckoning"/> On May 25, 2006, Lay was found guilty on six counts of conspiracy and fraud by the jury. In a separate bench trial, Judge Lake ruled that Lay was guilty of four additional counts of fraud and making false statements. Sentencing was scheduled for September 11, 2006, and rescheduled for October 23, 2006.<ref>{{cite news | title=Enron founder Ken Lay dies | url=https://money.cnn.com/2006/07/05/news/newsmakers/lay_death/ | first=Shaheen | last=Pasha | work=] | date=July 5, 2006}}</ref>

==Death==
Lay died on July 5, 2006, while vacationing in ]. The ] Sheriff's Department confirmed that officers were called to Lay's house in ], near ] at 1:41 am ]. Lay was taken to Aspen Valley Hospital, where he was pronounced dead at 3:11 am MDT. The autopsy indicated that he died of a heart attack brought on by ], and found evidence that he had suffered a previous heart attack.<ref name=LAT/>

A private funeral for about 200 people was held in Aspen four days after his death. His body was cremated and his ashes were buried in an undisclosed location in the mountains.<ref>{{cite news | last=Moreno | first=Sylvia| title=Lay Is Remembered As a 'Straight Arrow' | url=https://www.washingtonpost.com/wp-dyn/content/article/2006/07/12/AR2006071201776_pf.html | newspaper=] | date=July 13, 2006}}</ref><ref>{{cite news | title=Lay victim of 'lynching,' speaker at service says | url=https://www.chicagotribune.com/news/ct-xpm-2006-07-13-0607130116-story.html | agency=] | publisher=] | date=July 13, 2006}}</ref> A memorial service was held a week after his death at the First United Methodist Church in Houston. It was attended by over 1,000 guests, including ] and ].<ref>{{cite news| title=Lay praised by family and friends | url=https://www.chron.com/business/enron/article/Lay-praised-by-family-and-friends-1873904.php | first=Mike | last=Tolson | work=] | date=July 13, 2006}}</ref>

On October 17, 2006, the conviction was overturned due to ], a legal doctrine which says the death of a defendant during an appeal results in a ].<ref>{{cite news | title=Judge Throws Out Kenneth Lay's Conviction | url=https://www.nytimes.com/2006/10/18/business/18enron.html | first=Kate | last=Murphy | work=] | date=October 17, 2006 |url-access=subscription }}</ref><ref>{{cite news | title=Can't the Feds Get Lay's Money? | last=Engber | first=Daniel | url=https://slate.com/news-and-politics/2006/07/why-can-t-the-government-take-money-from-a-dead-criminal.html | work=] | date=July 6, 2006}}</ref> The government opposed Lay's attorneys' motions of appeal.{{clarify|date=August 2022}} The ] issued a statement saying it remained committed to pursuing all available legal remedies for victims of the fraud.<ref>{{cite news | title=Lay's Estate And DOJ Prepare For Battle | url=https://www.law360.com/texas/articles/8799/lay-s-estate-and-doj-prepare-for-battle | work=] | date=August 17, 2006 |url-access=subscription }}</ref><ref>{{cite news | title=Lawyers Seek to Throw Out Lay Conviction | url=https://www.nytimes.com/2006/08/17/business/lawyers-seek-to-throw-out-lay-conviction.html | agency=] | work=] | date=August 17, 2006 |url-access=subscription }}</ref>

==Personal life==
At the time of his death, Lay had been married to his second wife, Linda, since 1982. Both Linda and his first wife, Judith, supported Lay through the trial and made appearances at court. Kenneth Lay had two children, three stepchildren, and twelve grandchildren.<ref name="about-lay">{{cite web|last1=Stritof|first1=Sheri|title=Kenneth and Linda Phillips Lay Marriage Profile|url=http://marriage.about.com/od/infamous/p/kenlay.htm|website=About|access-date=October 17, 2015|archive-date=November 28, 2015|archive-url=https://web.archive.org/web/20151128211425/http://marriage.about.com/od/infamous/p/kenlay.htm}}</ref><ref name=LayBio>{{cite web|url=http://www.biography.com/articles/Kenneth-Lay-234611|publisher=biography.com|title=Biography: Ken Lay|url-status=dead|archive-url=https://web.archive.org/web/20100715031704/http://www.biography.com/articles/Kenneth-Lay-234611|archive-date=July 15, 2010}}</ref>


==See also== ==See also==
*]
*] *]
*]
*]
*]
*]
*]
*]
*]
*]

==Notes==
{{Notelist}}


== References == ==References==
{{Reflist}}
<div class="references-small">
<references/>
</div>


== External links == ==External links==
{{Spoken Misplaced Pages|Kenneth_Lay.ogg|date=July 7, 2006}}
*
*, indictment document (2.3MB ]). *, indictment document (2.3MB ]).
*
*
*
*
* – MSNBC
*
*{{dead link|date=September 2024|bot=medic}}{{cbignore|bot=medic}}, Obituary
* {{nndb name | id = 974/000022908 | name= Ken Lay }}
*{{C-SPAN|33190}}
*
*
*
*


{{Enron}}
]
{{Dot-com Bubble}}
]
{{Authority control}}
]
]
]
]
]
]
]
]


{{DEFAULTSORT:Lay, Kenneth}}
]
] ]
] ]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]
]

Latest revision as of 12:47, 2 December 2024

Founder of Enron Corporation (1942–2006) "Ken Lay" redirects here. For the Chief Commissioner of Victoria Police, see Ken Lay (police officer). Not to be confused with Kenneth Law.
Kenneth Lay
Mugshot of Lay upon his arrest in 2004
BornKenneth Lee Lay
(1942-04-15)April 15, 1942
Tyrone, Missouri, U.S.
DiedJuly 5, 2006(2006-07-05) (aged 64)
Snowmass, Colorado, U.S.
Education
OccupationBusinessman
Spouses
  • Linda Lay
  • Judith Ayers
Children5
Signature

Kenneth Lee Lay (April 15, 1942 – July 5, 2006) was an American businessman and political donor who was the founder, chief executive officer and chairman of Enron. He was heavily involved in Enron's accounting scandal that unraveled in 2001 into the largest bankruptcy ever to that date. Lay was indicted by a grand jury and was found guilty of 10 counts of securities fraud at trial. Lay died in July 2006 while vacationing in his house near Aspen, Colorado, three months before his scheduled sentencing. A preliminary autopsy reported Lay died of a heart attack caused by coronary artery disease. His death resulted in a vacated judgment. Conspiracy theories regarding Lay's death surfaced, alleging that it was faked.

Lay left behind "a legacy of shame" characterized by "mismanagement and dishonesty". In 2009 a list posted on Portfolio.com ranked Lay as the third-worst American CEO of all time. His actions were the catalyst for subsequent and fundamental corporate reform in regard to "standards of leadership, governance, and accountability".

Lay was one of America's highest-paid CEOs; between 1998 and 2001, he collected more than $220 million in cash and stock in Enron, selling 1.7 million of those shares. However, during his trial in 2006, Lay claimed that Enron stock made up about 90% of his wealth, and that his net worth at that time was negative $250,000.

Early life

Lay was born in the Texas County, Missouri, town of Tyrone, the son of Omer and Ruth (née Rees) Lay. Lay's father was a Baptist preacher and Lay grew up in poverty after the family's general store failed. Later in Lay's childhood, his family relocated to Columbia, Missouri, and Lay attended David H. Hickman High School and the University of Missouri, where he studied economics, receiving a Bachelor of Arts in 1964 and a Master of Arts in 1965. He served as president of the Zeta Phi chapter of the Beta Theta Pi fraternity at the University of Missouri. He earned a Doctor of Philosophy in economics from the University of Houston in 1970.

He worked at Humble Oil as an economist from 1965 to 1968 in the Corporate Planning Department. In 1968, Lay entered the Officer Candidate School for the United States Navy where, from 1968 to 1971, he rose to the rank of lieutenant and was the special assistant to the Navy Comptroller and Financial Analyst at the Office of Assistant Secretary of the Navy in the Department of the Navy at The Pentagon.

Career

Lay worked from 1971 to 1972 as a technical assistant to commissioner and vice chairman (federal energy regulator) of the Federal Power Commission and served as the energy deputy undersecretary for the United States Department of Interior until 1974. In 1974, he returned to the business world as an executive at Florida Gas Transmission and was president of Continental Resources from 1981 to 1982. In 1982, he joined Transco Energy Company, owner of the Transcontinental Pipeline, in Houston and held the positions of president, chief operating officer and director until 1984 when he became chairman and CEO of the Houston Natural Gas Company.

By the time energy was deregulated in the 1980s, Lay was already an energy company executive and he took advantage of the new climate when Omaha-based InterNorth bought his company Houston Natural Gas and changed the name to Enron in 1985.

He was also a member of the board of directors from 1993 to 2001 of Eli Lilly and Company and a director at Texas Commerce Bank. In 1996 he held negotiations to replace Robert E. Allen as the CEO of AT&T.

Political involvement

Lay was a friend of the Bush family including former President George H. W. Bush. He made monetary contributions, led several committees in the Republican Party and was co-chairman of Bush's 1992 re-election committee. As President, Lay flew Bush and his wife to Washington on an Enron corporate plane. In December 2000, Lay was mentioned as a possible candidate for either United States Secretary of Energy or Secretary of the Treasury under George W. Bush. He was not nominated because it was decided that the administration already included too many energy businessmen from Texas.

Lay additionally had friendly relations with the Republican politicians Gerald R. Ford, Dick Cheney, and James A. Baker III as well as the Democratic politicians Bill Clinton and Ann Richards. He encouraged John Ashcroft to campaign in the 2000 Republican Party presidential primaries, although this was partially to ensure him as a spoiler candidate to help Bush win the race.

From 1989 to 2002, Lay's political contributions totaled $5.8 million, with 73% going to Republicans, and 27% going to Democrats. From 1999 to 2001, he gave $365,410 to the Republican Party.

Enron bankruptcy and trial

Lay's company, Enron, went bankrupt in 2001. At the time, this was the biggest bankruptcy in U.S. history. In total, 20,000 employees lost their jobs and in many cases their life savings. Investors also lost billions of dollars. On July 7, 2004, Lay was indicted by a grand jury in Houston, Texas, for his role in the company's failure. Lay was charged, in a 65-page indictment, with 11 counts of securities fraud, wire fraud, and making false and misleading statements. The trial of Kenneth Lay and Jeffrey Skilling commenced on January 30, 2006, in Houston.

Lay insisted that Enron's collapse was due to a conspiracy waged by short sellers, rogue executives, and the news media. On May 25, 2006, Lay was found guilty on six counts of conspiracy and fraud by the jury. In a separate bench trial, Judge Lake ruled that Lay was guilty of four additional counts of fraud and making false statements. Sentencing was scheduled for September 11, 2006, and rescheduled for October 23, 2006.

Death

Lay died on July 5, 2006, while vacationing in Colorado. The Pitkin County Sheriff's Department confirmed that officers were called to Lay's house in Snowmass, Colorado, near Aspen at 1:41 am Mountain Daylight Time. Lay was taken to Aspen Valley Hospital, where he was pronounced dead at 3:11 am MDT. The autopsy indicated that he died of a heart attack brought on by coronary artery disease, and found evidence that he had suffered a previous heart attack.

A private funeral for about 200 people was held in Aspen four days after his death. His body was cremated and his ashes were buried in an undisclosed location in the mountains. A memorial service was held a week after his death at the First United Methodist Church in Houston. It was attended by over 1,000 guests, including George H. W. Bush and James Baker.

On October 17, 2006, the conviction was overturned due to abatement ab initio, a legal doctrine which says the death of a defendant during an appeal results in a vacated judgment. The government opposed Lay's attorneys' motions of appeal. The United States Department of Justice issued a statement saying it remained committed to pursuing all available legal remedies for victims of the fraud.

Personal life

At the time of his death, Lay had been married to his second wife, Linda, since 1982. Both Linda and his first wife, Judith, supported Lay through the trial and made appearances at court. Kenneth Lay had two children, three stepchildren, and twelve grandchildren.

See also

Notes

  1. Lay was ranked third-worst behind Angelo Mozilo at second-worst and Dick Fuld at worst overall.
  2. On January 1, 1973, Humble Oil Refining merged with its parent, Standard Oil of New Jersey, to form Exxon Company, USA.
  3. In 1983, Northern Natural Gas, owner of the Northern Natural Pipeline merged with Arthur Belfer's Belco Oil & Gas Corporation to become the BelNorth Petroleum Corporation.
  4. Dynegy purchased Northern Natural Pipeline from Enron in November 2001 and then sold it in July 2002 to Warren Buffett's Berkshire Hathaway.

References

  1. Crawford, Kristen (July 12, 2004). "Lay surrenders to authorities". CNN.
  2. ^ Pasha, Shaheen; Seid, Jessica (May 25, 2006). "Lay and Skilling's day of reckoning". CNN.
  3. ^ Mulligan, Thomas S.; Bustillo, Miguel (July 6, 2006). "Death Puts Lay Conviction in Doubt". Los Angeles Times.
  4. Fowler, Tom (October 17, 2006). "Judge vacates conviction of Ken Lay". Associated Press.
  5. United States v. Lay, Criminal Action No. H-04-0025, 456 F.Supp.2d 869 (S.D. Tex. 2006), at .
  6. Bratton, William W. (May 2002). "Does Corporate Law Protect the Interests of Shareholders and Other Stakeholders?: Enron and the Dark Side of Shareholder Value". Tulane Law Review (PDF) (1275). New Orleans: Tulane University Law School: 61. SSRN 301475.
  7. "Conspiracy theories surround Ken Lay's death". NBC. July 15, 2006.
  8. ^ Morrison, Mark (July 4, 2006). "Ken Lay's Dark, Ironic Legacy". Bloomberg News.
  9. "Portfolio's Worst American CEOs of All Time". CNBC. April 30, 2009.
  10. Multiple sources:
  11. Pasha, Shaheen (September 7, 2006). "U.S., Lay estate ink $12M pension settlement". CNN.
  12. Handbook of Texas Online. Retrieved March 2, 2010.
  13. ^ "Biography: Ken Lay". biography.com. Archived from the original on July 15, 2010.
  14. ^ "Dr. Kenneth Lee Lay Obituary". Houston Chronicle. July 7, 2006.
  15. ^ "Ken Lay". NNDB. Retrieved January 6, 2018.
  16. "Substitute the name "ExxonCompany, U.S.A." for the name "Humble Oil and Refining Company"" (PDF). Nuclear Regulatory Commission. December 20, 1972. Retrieved January 6, 2018.
  17. Graham, Judith (February 1, 2002). "Pipeline retirees in Omaha hurt by Enron collapse: Former subsidiary once was the pride of Nebraska city". Chicago Tribune.
  18. "Belco Oil & Gas Corp. History". fundinguniverse.com. Archived from the original on September 18, 2017. Retrieved January 6, 2018.
  19. Sorkin, Andrew Ross (July 30, 2002). "Berkshire to Buy a Gas Pipeline From Dynegy". The New York Times.
  20. Roger Stone; Saint John Hunt (2016). "5: JEB Goes to Venezuela". JEB! and the Bush Crime Family: the Inside Story of an American Crime Dynasty. Skyhorse Publishing. ISBN 978-1510706798.
  21. ^ Eichenwald, Kurt (2005). Conspiracy of fools : a true story. Broadway Books. ISBN 0-7679-1179-2. OCLC 973543262.
  22. "Commentary: Ken Lay's Audacious Ignorance". Bloomberg News. February 5, 2006.
  23. Bajaj, Vikas; Eichenwald, Kurt (July 6, 2006). "Kenneth L. Lay, 64, Enron Founder and Symbol of Corporate Excess, Dies". The New York Times.
  24. Cameron, Sue (July 5, 2006). "Obituary: Ken Lay". Financial Times. Archived from the original on December 12, 2022. Retrieved February 18, 2019.
  25. "Follow the Enron Money". CBS News. January 12, 2012.
  26. "Ken Lay Biography and Political Campaign Contributions". Campaign Money.
  27. Peters, Jeremy W.; Romero, Simon (July 5, 2006). "Enron Founder Dies Before Sentencing". The New York Times.
  28. Pasha, Shaheen (July 5, 2006). "Enron founder Ken Lay dies". CNN.
  29. Moreno, Sylvia (July 13, 2006). "Lay Is Remembered As a 'Straight Arrow'". The Washington Post.
  30. "Lay victim of 'lynching,' speaker at service says". Chicago Tribune. Bloomberg News. July 13, 2006.
  31. Tolson, Mike (July 13, 2006). "Lay praised by family and friends". Houston Chronicle.
  32. Murphy, Kate (October 17, 2006). "Judge Throws Out Kenneth Lay's Conviction". The New York Times.
  33. Engber, Daniel (July 6, 2006). "Can't the Feds Get Lay's Money?". Slate.
  34. "Lay's Estate And DOJ Prepare For Battle". Law360. August 17, 2006.
  35. "Lawyers Seek to Throw Out Lay Conviction". The New York Times. Bloomberg News. August 17, 2006.
  36. Stritof, Sheri. "Kenneth and Linda Phillips Lay Marriage Profile". About. Archived from the original on November 28, 2015. Retrieved October 17, 2015.

External links

Listen to this article (13 minutes)
Spoken Misplaced Pages iconThis audio file was created from a revision of this article dated 7 July 2006 (2006-07-07), and does not reflect subsequent edits.(Audio help · More spoken articles)
Enron Corporation
Predecessors
Divisions and subsidiaries
People
Enron scandal
In culture
Books
Other
Dot-com bubble
People
Companies
History
Publications
Broadcast media
Categories: