Enron Founder Kenneth Lay Dies of Heart Attack
Former Enron Chairman Kenneth Lay died at his vacation home in Aspen, Colo., on Wednesday. Lay suffered a "massive coronary," according to a family pastor. He was 64 years old.
Under Lay's command, Enron grew from a sleepy natural-gas pipeline company into a dynamic energy powerhouse, only to collapse in one of the nation's costliest business scandals.
Lay's death comes less than six weeks after he was convicted of defrauding investors and employees, a verdict that shocked the former chairman.
"Certainly, we're surprised," Lay said outside the courtroom in May. "I think it's probably more appropriate to say we're shocked. I firmly believe I'm innocent of the charges against me. But despite what happened today, I'm still a very blessed man."
Born to a family of modest means in Tyrone, Mo., Lay would become one of the nation's most powerful business executives, a confidante of politicians, and a benefactor of public causes. University of Virginia business professor Samuel Bodily, who co-authored a case study on Enron, says despite its one-time market value of f $70 billion, the company will be remembered as a failure.
"It went bankrupt. Thousands of people lost their jobs. [It] destroyed lots of careers," Bodily says. "This is what people will remember. And they'll probably forget that in the early years, these were people who added real value and had real important ideas."
Lay was CEO of Houston Natural Gas when it merged with a Nebraska gas company to form Enron in the mid-1980s. Enron profited from the deregulation of natural gas. But Bodily said company leaders "got ahead of themselves" when they tried to repeat that success in markets for electricity and telecommunications.
Houston energy analyst John Olson, of the Sanders Morris Harris Group, was one of the first to sound alarms about the company's mysterious finances. That drew complaints from a defensive Lay.
"He was very sensitive to any question marks about the company's business or its growth prospects," Olson says. "And I'm afraid I ran afoul of that sensitivity a number of times. Which is a shame, because I always thought of Ken -- as a person -- as a very decent, good human being. Professionally, however, he had a different agenda than mine."
Lay became a major philanthropist in Houston, and a major political donor as well. He supported George W. Bush from the time of his first gubernatorial campaign, and co-hosted a Republican gala during the presidential campaign of 2000.
Vice President Dick Cheney and his staff later met with Lay and his staff on several occasions while drafting a national energy policy. Tyson Slocum, of the watchdog group Public Citizen, says despite the Enron scandal, much of that policy was ultimately adopted.
"Enron may have declared bankruptcy. There may be people that have been convicted and sent to jail. But Enron's vision of removing government oversight over energy markets remains the force of law today," Slocum says.
After Enron's collapse, Lay suddenly found he had few friends in Washington. Indicted on criminal charges almost exactly two years ago, he insisted that business failure is not the same as a crime.
"As CEO of the company, I accept responsibility for Enron's collapse," Lay said. "However, that does not mean I knew everything that happened at Enron, and I firmly reject any notion that I engaged in any wrongful or criminal activity."
The jury found otherwise, after a trial in which Lay appeared combative. The government has been seeking more $40 million in restitution from Lay. Prosecutors dispute the claim he made during trial that he's effectively broke.
Authorities in Colorado say an autopsy will be performed. A statement from Lay's pastor suggests, "His heart simply gave out."
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