Word: enronizing
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Before the company officially went bankrupt, Lay, who had earned admiration for his unpolished, affable manner, had lost his loyal fan base. In late October--a day after Enron acknowledged that the SEC had opened an investigation of its accounting practices--Lay tried his best to raise the spirits of his downtrodden workforce. At a company gathering caught on videotape, the son of a Missouri minister promised that there wouldn't be any layoffs and that Enron would rise again. For once, though, the rank and file weren't drinking Ken's Kool-Aid. As one disgruntled worker...
...enough, surely, to satisfy members of Congress. An army of legislators, lawyers and federal agents is bearing down on Lay with the threat of both civil and criminal charges. They all want to know why he seemed to be touting Enron stock and simultaneously selling his own shares--while knowing that the firm he had turned from a staid pipeline operator into an innovative energy-trading giant was imploding. Investigators for plaintiff lawyers tell TIME they are looking into allegations that investment bankers helped top executives like Lay and former CEO Jeffrey Skilling (who is also supposed...
...innocence is that he and his family are now near bankruptcy. "If those people had come back to him and told him there was anything wrong, he would have stopped it and fixed it," Linda Lay declared. "There's nothing left. Everything we had mostly was in Enron stock...
When he appears before the Senate Commerce Committee, Lay is expected to argue, as his wife did, that he relied on the counsel of legal and financial experts, who told him there was nothing illicit or unethical about hiding billions of dollars of Enron's debts in off-balance sheet partnerships that ended up inflating the company's reported earnings. To prove his point--and show how much he believed in the company until the bitter end--the man who has collected some $200 million in compensation over the past three years will try to explain...
...knew all along about the possible ethical conflicts posed by the involvement of Enron chief financial officer Andrew Fastow in off-the-books partnerships with shell corporations, according to a confidential study conducted at Lay's request by the Houston law firm Vinson & Elkins. On Nov. 5, 1997, as first reported by the Wall Street Journal, the executive committee of Enron's board voted to provide hundreds of millions of dollars in loan guarantees to a partnership known as Chewco. Then, in June and November of 1999, the board waived the company's ethics code to allow Fastow to serve...