Ex-Enron chief Lay blasts prosecutors, Fastow

By Matt Daily

HOUSTON (Reuters) – Former Enron Corp. Chairman Ken Lay on
Tuesday said he was the victim of a “wave of terror” by
prosecutors and blamed his former chief financial officer for
the energy company’s spectacular downfall.

In a preview of his defense at his criminal trial next
month, Lay, in a speech to a Houston group, said he was only to
blame for trusting Andrew Fastow, Enron’s CFO, who has pleaded
guilty to charges and will be the government’s key witness
against Lay and co-defendants.

“We did trust Andy Fastow, and sadly, tragically, that
trust turned out to be misplaced,” Lay said.

Lay, former Chief Executive Jeffrey Skilling and former
Chief Accounting Officer Richard Causey will face criminal
trial in January for charges brought in the aftermath of the
collapse of the world’s largest energy trader.

Lay also took aim at the Department of Justice’s Enron Task
Force, which he said launched a special investigation against
him even before there was evidence of any crimes.

“In this trial, apparently unlike most criminal defense
cases, defendants are trying to get the truth in, and the
prosecutors, the Enron Task Force, are trying to keep it out,”
he said.

Lay called on former Enron employees to help him in
presenting the truth about Enron. “Whether it (truth) will
continue to be submerged by a wave of terror by the Enron Task
Force will be determined by former Enron employees.”

Enron filed for bankruptcy in 2001 after the company’s use
of off-balance sheet accounts to hide tens of billions of
dollars in debt was revealed.

The company emerged from bankruptcy late last year and is
currently disposing of its remaining assets to pay back
creditors, who are expected to receive only a tiny fraction of
what they are owed.

Lay faces seven charges for conspiracy and fraud.

He will face a separate trial in which he is accused of
illegally using bank loans to buy Enron stock.