Ken Lay may be indicted

The long arm of the law may be reaching out for former Enron Chairman Ken Lay. The Houston Chronicle says federal prosecutors are expected to ask a federal grand jury to indict the Bush buddy within two weeks on charges related to Enron’s collapse in 2001.

The Chronicle said Lay likely would face charges of fraud, similar to those filed earlier against former Enron CEO Jeffrey Skilling and former CFO Richard Causey.

Skilling and Causey face multiple charges such as insider trading, wire fraud, securities fraud, conspiracy and lying about the company’s finances.

Lay, 62, guided the now bankrupt energy giant for many years and was a major contributor and political ally of President George H. Bush.

Enron folded in 2001 in a huge financial scandal when it was disclosed that the company had used off-the-books partnerships to conceal billions of dollars in debt so as to inflate profits.

Enron’s fall launched several investigations that revealed widespread financial fraud in America’s corporations and caused the energy trading industry to implode.

According to the Chronicle, prosecutors have called a number of witnesses to testify before a special Enron grand jury very recently. They appear to be looking at Lay’s behavior from August 2001 to the December 2001 bankruptcy filing.

Within that period, Skilling resigned as CEO, Enron vice president and whistleblower Sherron Watkins sent Lay a memo warning about fiscal improprieties and an Enron credit line given to Lay swelled from $4 million to $7.5 million.

The paper said prosecutors also are examining statements Lay made to employees, analysts and investors about Enron, as well as his trades of Enron stock for millions of dollars during this time period.

Prosecutors made no comments about possible pending indictments. Lay’s lawyer, Michael Ramsey, however, said: “Indict him for what? I don’t know what they could charge him with.”

The Chronicle said to date, 21 former Enron employees, along with eight other people who dealt with the company, have been charged in the scandal. Ten have pleaded guilty and are cooperating with prosecutors, including former chief financial officer Andrew Fastow.

Source: Houston Chronicle

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