Enron Bigwigs Facing Day in Court
Jan. 29, 2006 — -- They are called the poster boys of corporate scandal: Enron founder Ken Lay and former CEO Jeff Skilling. They are now defendants in a criminal trial and countless lawsuits, and their names have become punch lines for late-night comedians.
On Monday, they are expected to go on trial in federal court in Houston, both accused of lying about Enron's financial status to keep the company's stock prices inflated. Both have pleaded not guilty. Both say this trial is not just about fighting the criminal charges but about salvaging their reputations and pride in the company they helped create.
When Enron collapsed in 2001, it ranked seventh on the Fortune 500. It once had a trading portfolio of more than $4 billion. Now the company is steadily selling off its assets to settle lawsuits and claims by creditors.
Skilling and Lay find themselves as uncomfortable co-defendants in a federal trial.
They launched an all-out effort to be tried separately but failed. Their attorneys repeatedly tried to move the trial from Houston, arguing to Judge Sim Lake that their clients could not get a fair trial there. There are too many books, a movie just out on DVD, and the press coverage is unrelenting, they have said.
Last month, Lay defiantly laid out a case for his innocence in front of the Houston Forum Club.
"Two separate Enron Task Force teams spent two years looking at everything related to me and my wife, Linda," he said. "These first two teams, despite exhaustive efforts, found no basis for indicting me. In my mind, it was really quite simple. They did not find a crime because there was no crime".
Former Enron employee Diana Peters remembers the memo written by Lay just before Enron's collapse. It was dated Aug. 27, 2001.
"As I mentioned at the employee meeting, one of my highest priorities is to restore investor confidence in Enron," the memo said. "This should result in a significant higher stock price. I hope this grant lets you know how valued you are to Enron, I ask your continued help and support as we work together to achieve this goal. Again, on behalf of Enron and myself thanks for everything you are doing to make Enron the great company it is."
Four months later, Peters was out of a job. She was told on Dec. 3 , 2001, that she had 30 minutes to clean out her desk and go home. She walked out the door with a box of photos and plants, and little else. No health insurance, no severance pay, no pension, and no 401(k) -- nothing to show for 10 years of work.
Peters loved working at Enron.
"I liked the people I worked with," she said. "I liked the atmosphere. It was family. You felt like part of a family."
Peters started out as a graphic designer in the business group started by Skilling.
"It was exhilarating," Peters said. "If you were talented, it was easy to rise through the ranks if you knew what you were doing."
Since Enron's collapse, she has struggled to earn a living. She has been working three jobs and lives with the fear that the next month could be the month she loses her home.
"Every morning I get in my car, I pray that it will start one more day," she said.
During the week, Peters works at a technical help desk. At night, she takes phone orders. On weekends, she cleans office buildings. There are no benefits, and she chose to forego health insurance to keep her husband, Dale, who suffers from cancer, covered.
Peters plans to attend the trial when she can.
"I will definitely be there the day they are sentenced," she said. "I want to see the look on their faces when they find out they are going to jail."
Even so, Peters has moved on. It has become her mission in life to change corporate bankruptcy laws to protect employees' pensions and employees who are on medical leave when a company declares bankruptcy.
