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Laying for Him

By Russ Smith | Posted 7/12/2006

At the end of May, one of my brothers and I were sitting in a Newark Airport lounge, gabbing while waiting out a delayed flight. The topic turned to Enron felons Kenneth Lay and Jeffrey Skilling, and we both wondered how Lay, at 64, would cope with the near certainty of spending the rest of his life in jail. Sentencing was several months away, but we figured that each of the arrogant business executives would draw at least 15 years in the slammer, and not at a minimum-security facility. They were the most prominent public scalps for the cyclical round of corporate malfeasance, and an example was sure to be set.

I was surprised that either or both of the Texans hadn’t arranged some way to sneak out of the country and pull a Marc Rich, the notorious white-collar criminal on the lam for years, at least until Bill Clinton pardoned him in early 2001. That Lay and Skilling stayed put and maintained their innocence, despite overwhelming evidence to the contrary, was an example of the hubris often demonstrated by men and women who are brilliant in one facet of their lives, and lacking in others. Bill Gates, a decade ago, was similarly naive when he refused to compromise his image by setting up a lobbying office in Washington, D.C., a mistake that resulted in the outrageous litigation waged against him and Microsoft by the feds and numerous state’s attorneys on the charges of monopolistic practices. Gates, who was never accused of an Enron-like crime, did eventually wise up, but only after it cost him untold millions in lawyers’ fees and, more importantly, valuable time in continuing the progress of his business.

Anyway, those idle scenarios, at least in Lay’s case, were rendered moot last week with the announcement of the former CEO’s fatal heart attack in Colorado. Skilling, middle-aged at 52, isn’t likely a candidate for a similar fate, since he’ll probably be of sound mind when released and might be able to use the time behind bars to find ways of public repentance, whether it’s establishing a good-works program or turning to religion.

The reaction to Lay’s death in the media was fairly odd, with the impression given that the scalp hunters were somehow cheated out of seeing Enron’s founder suffer. Skilling will now bear the brunt of vengeance in the legal and communications world, even as most Americans, save those who lost their jobs and savings because of Enron’s collapse, have forgotten all about the scandal.

This is not an apologia for Lay, Skilling, Andrew Fastow, or any of the other greedy executives who duped shareholders with doctored accounting; Alex Gibney’s excellent 2005 documentary Enron: The Smartest Guys in the Room was a compelling indictment of this tainted company. I do think that many of Enron’s oft-quoted victims, content to hold onto to their stock even as the price was tanking in the summer of 2001 (well before Lay and his generals froze the stock), were deceiving themselves and guilty of bad judgment. Contrary to media sensationalism, not all of Enron’s employees were financial neophytes unable to decipher a balance sheet.

New York Times critic A.O. Scott, in an April 22, 2005, review of Gibney’s film, said, "Much of the entertainment value comes from the undeniable pleasure of feeling morally superior to many of the people on screen, a nice antidote to the envy they might have inspired when they were riding high." Newsweek’s juvenile "Conventional Wisdom" chart had this snippet in its July 17 issue: "Sudden fatal heart attack saves Kenny Boy’s remaining loot, and even gets Dubya to admit they were pals." And Henry Allen, in the July 6 Washington Post, admitted he was "disappointed" by Lay’s death, since "Many people had looked forward to knowing more about [Lay], especially how he liked prison."

A Times editorial (July 6), "Ken Lay’s Final Act," while expressing sympathy for his family, also speculated that "Victims of Enron’s spectacular collapse may feel cheated that the company’s public face and one of its leading architects died in comfort, in upscale Aspen, Colo., without ever serving a day for his many crimes." The writer wondered what Lay might have accomplished after completing his sentence, ludicrously comparing him to Michael Milken, the "junk bond" whiz who was much younger at the time of his (unfair, in my view) incarceration, and was out of commission for just a few years before devoting his life to medical research.

It’s worth remembering, now that the entire Enron scandal has mostly faded from the country’s political culture, that Times op-ed columnist Paul Krugman, a left-wing hero, was dead wrong in assessing the scandal four years ago. Krugman, in a Jan. 29, 2002, piece, wrote these inexplicably myopic words: "I predict that in the years ahead Enron, not Sept. 11, will come to be seen as the greater turning point in U.S. society."

No matter what you think about the perfidy of Lay, Skilling, and their cohorts, it’s as clear today as in 2002 that one corporation’s dizzying demise is nothing compared to the geopolitical threats, and promises, that will dominate the American landscape for years to come.

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