He died today in Colorado, at the age of 64. Lay was admitted to Aspen Valley Hopsital with a massive coronary at 1:41 am and was pronounced dead at 3:11am.
Lay was awaiting sentencing on the [tag]conspiracy[/tag] and [tag]fraud[/tag] charges he was convicted of in May.
The Houston Chronicle gives this history of Lay and Enron:
Lay and Jeff Skilling, the only two chief executives Enron had before it filed for bankruptcy in December 2001, were convicted May 25 of conspiracy and fraud. Prosecutors said they duped investors about Enron’s balance sheet and the very nature of its business.Jurors also convicted Skilling of insider trading and lying to auditors, and U.S. District Judge Sim Lake convicted Lay of bank fraud in a non-jury trial. Both men were bracing for long federal prison sentences on Oct. 23, the date Lake set for a punishment hearing.
The men unsuccessfully testified that Enron was an honest company ruined by a market panic and the shenanigans of one dishonest man, former Chief Financial Officer Andrew Fastow. Lay maintained a confident tone after the convictions.
“I firmly believe I’m innocent of the charges against me,” Lay said outside the courthouse. “We believe God is in fact in control and indeed he does work all things for good for those who love the Lord.”
Both men were expected to receive lengthy prison sentences in an Oct. 23 hearing before U.S. District Judge Sim Lake.
Lay created Enron from the 1985 merger of Nebraska-based InterNorth and Houston Natural Gas. Once he brought Skilling aboard, the pipeline company became active in the deregulating natural gas and electricity markets and evolved into the nation’s energy trading powerhouse.
Using mark-to-market accounting, where the company booked expected future revenues on its balance sheets, Enron had vaulted to seventh place on the Fortune 500 in 2000 with $101 billion in revenue.
The collapse was swift after questions about Enron’s bookkeeping emerged in 2001. Lay was out by early 2002 and later charged by federal prosecutors on the Justice Department’s Enron Task Force, although he repeatedly and vociferously defended both himself and Enron in a variety of interviews and public forums.
Lay, the genial face of his company who was active in Houston’s philanthropic community and generally popular until Enron’s downfall, was expected to carry that persona into the federal courthouse when the trial began in January. But he seemed grumpy and combative for much of his time on the stand, even with his own attorney.
“He was a people person,” juror Freddy Delgado said about Lay after the trial. “He was banking on that, I guess, to get him through the trial.”
Federal prosecutors also made sure the jury knew about the kind of lifestyle Lay and his wife, Linda, maintained, including frequent travel to luxurious ports of call and personal debt that reached $100 million. It was that debt, illegally paid down with Enron stock, that led to his bank fraud convictions.
While awaiting sentencing, Lay was confined generally to the coastal Texas region including Houston except for the Aspen area, where the couple had a home in Snowmass.
Pat Worcester, executive assistant to CEO at Aspen Valley Hospital, said the hospital would release a statement later. Skilling told The Associated Press that he was aware of Lay’s death, but declined further comment.
Prosecutors in Lay’s trial declined comment today, both on his unexpected death and what may become of the government’s effort to seek a $43.5 million judgment from Lay that they say he pocketed as part of the conspiracy.
Born April 15, 1942, in Tyrone, Mo., Lay grew up as the son of a Baptist minister who also sold farm equipment and worked at a feed store.
In high school in Rush Hill, Mo., just outside Columbia, Lay was a top student, sophomore class president, bass singer in the madrigal choir and slide trombone player in the marching band.
He said small-town life never was for him.
“I spent a lot of time on a tractor and had a lot of time to think,” Lay said. “I must confess I was enamored with business and industry. It was so different from the world in which I was living.”
While attending the University of Missouri, Lay became interested in Wall Street, monetary policy and international trade.
Earning a master’s degree in economics in 1965, Lay accepted a senior analyst job at Humble Oil in Houston, though he knew nothing about energy or the Gulf Coast. There, and later at Exxon, Lay was an economist in corporate planning.
At Hickman High School in Columbia, Mo., Lay accomplished quite a bit for a new kid on the block, said Charley Blackmore, who graduated from Hickman with Lay’s sister, Sharon, three years behind Ken.
Blackmore, on his alumni Web site, kewpie.net – named for the school mascot – noted that Lay participated in band and several singing groups, was elected to the National Honor Society, was named homecoming chairman and received the American history award. He graduated 10th in a class of 276.
At the University of Missouri, Lay joined the Beta Theta Pi fraternity, known for attracting scholars and intramural athletes. He became president as a junior, which was unusual.
In college, Lay formed the ideals and principles he would use to achieve the wealth and power he dreamed of. “He took every course I taught,” said Pinkney Walker, a former professor of economics. “He understood that an unregulated market with free choice, where market forces can work, will create greater incentives and maximize the well-being of many.”
Lays upbringing ingrained in him a drive to rise above his beginnings, Walker said, but it was his brilliance that made him stand out.
After Lay received his bachelor’s degree, Walker asked what he planned to do next. “He told me, `I’ve got to get out of here and make some money,’ ” Walker said.
Walker persuaded him to stay on and earn a master’s degree, finagling enough of a salary to make him a teaching assistant. When he earned the master’s, Walker asked his plans again: “Again he told me, `I’ve got to get out and make money.’ ”
Lay took a job in Houston in 1965 as a senior economist at Exxon predecessor Humble Oil, a company of international reach with ties to government and lots of promise.
In the early 1970s Lay was in the Navy, applying his economics knowledge at the Pentagon for Adm. George Kinner Jr., who later served with Lay on the board of Compaq Computer Corp.
Lay told the Chronicle his service in Washington gave him an appreciation of how the public sector worked. In his days with Enron, Lay – and his money – were well-known in government circles, as was his active crusading for open energy markets.
“Their local news is national news,” Lay said. “The whole world centers around what goes on in that city. I was impressed.”
