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Enron's Kenneth Lay Dies 868

Posted by ScuttleMonkey
from the so-long-and-thanks-for-all-the-sarbox dept.
Don420 writes "This morning the biggest corporate criminal in modern history, Kenneth Lay, died of a massive coronary before he could receive his sentence. Lay was found guilty of being in charge of the scheme that had many lose their live-savings through a scheme of complex offshore holdings and is to thank for our having to live with Sarbanes-Oxely." From the article: "Enron filed for bankruptcy in December 2001 after investigators found it had used partnerships to conceal more than $1 billion in debt and inflate profits. Enron's downfall cost 4,000 employees their jobs and many of them their life savings, and led to billions of dollars of losses for investors."
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Enron's Kenneth Lay Dies

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  • How Convenient... (Score:4, Interesting)

    by TripMaster Monkey (862126) * on Wednesday July 05, 2006 @01:46PM (#15661703)

    Kenneth Lay tragically passes away due to a massive heart attack before he receives his sentence. Impeccable timing...

    Two possible scenarios (in addition to the official version of events) come immediately to mind:

    • Ken was going to roll over on Dubya & Company, and was 'neutralized',
        - or -
    • Ken faked his own death and is currently laughing himself sick under a palm tree somewhere.


    Either scenario seems equally likely, and much more likely than 'Ken keeled over because he couldn't keep his LDLs in check'.
  • by dr_strang (32799) on Wednesday July 05, 2006 @01:46PM (#15661709)
    until I see a body. Just a little too convenient. /where the hell's my tinfoil hat?
  • by Buran (150348) on Wednesday July 05, 2006 @01:49PM (#15661738)
    Why is it that the ones who deserve the most punishment for what they've done always conveniently die or vanish before they can be punished?

    Resurrect him, I don't care how, then punish him most painfully, then re-kill him, as far as I'm concerned.

    Oh, and let's parade photos of his dead body through the streets just like we did with that dead terrorist a few months ago.

    Prove he's dead.
  • Life Insurance (Score:5, Interesting)

    by Yoda2 (522522) on Wednesday July 05, 2006 @01:54PM (#15661793)
    Interesting that any life insurance he held will still go to any named beneficiaries and cannot be tapped to help settle for any judgments/judgements against him.
  • by ackthpt (218170) * on Wednesday July 05, 2006 @01:56PM (#15661803) Homepage Journal

    Really, Lay wasn't the architect, he just covered it up until he could figure out how to get away from the mess without it sinking him. If you want to know more about who really created the fiasco, watch Enron: The Smartest Guys in the Room [imdb.com] and see. Also see how the present administration was complicit in the California Energy Crisis.

  • by mrpeebles (853978) on Wednesday July 05, 2006 @02:10PM (#15661941)
    Does anyone know how this affects his families liability concerning the Enron fraud? I haven't really followed the story very closely, mostly reading only the headlines, but I seem to remember he has already paid a lot of fines? Or maybe he just lost so much money due to the stock crash. In any case, does anyone know if the inheritors of his estate are now liable to any damages he might have done to the shareholders or employees of Enron? And can the courts take fines out of his estate before his inheritors (his wife, I guess?) take it?
  • by g_adams27 (581237) on Wednesday July 05, 2006 @02:10PM (#15661942)

    The world may never know exactly how much Ken Lay was involved in the whole Enron fiasco. But although he probably wasn't nearly as devious and manipulative as CEO Jeff Skilling or CFO Andy Fastow, Ken Lay was still the captain of the ship and deserves much of the blame for Enron's collapse.

    From what I've read of him, Ken had several flaws:

    1. He was far more interested in the trappings of power (luxury homes, expensive jets, etc.) than running a multi-billion-dollar company. So he let his underlings do it for him.
    2. He had a great aversion to interpersonal conflicts, so he rarely ever told anyone "no". It was common knowledge among the top execs that Ken was a pushover - just threaten to quit, and you could have whatever you wanted.
    3. Because of #1 and #2, he wouldn't or couldn't control the executives under him, who ran wild as a result.
    4. I tend to suspect that the oh-so-clever accounting techniques and special purpose entities Andrew Fastow cooked up to keep Enron's debts off their books was far more complicated than Ken could understand. (They're certainly too much for my little brain.) But instead of asking tough questions, Ken just shrugged and signed off on them.

    So although Ken may not have been the greedy manipulator that his underlings were, he reminds me a lot of a pleasant, but wimpy and passive dad who's let his children run wild with no discipline from their earliest days, then protests that he's not to blame when they turn into terrors 10-15 years later.

    For a fascinating account of the rise and fall of Enron, I would highly recommend the book The Smartest Guys In the Room [amazon.com]. You don't have to understand all the arcane ins-and-outs of accounting to follow the story, which really is pretty fascinating. (I believe there's a documentary movie based on the book as well...)

  • "He Didn't Fall..." (Score:5, Interesting)

    by Philip K Dickhead (906971) * <folderol@fancypants.org> on Wednesday July 05, 2006 @02:14PM (#15661963) Journal
    "He was pushed... They "Cliff Baxter'd" Kenny. You know Cliff, he's the guy who committed suicide with the wildly innacurate and seldom lethal shot cartridges, that also make it forensically challenging to plot ballistic trajectory.

    Kenny-boy suggested the VP role for Cheney to the Shrub. He was part of the "energy taskforce" that they are so desparate to keep under wraps. Like Dr. Kelly... Like... The list is big and convenient.

    Or did his poor heart break, because it was too good for this world? I don't think so!

    Another crony about to sing like a Canary to cop a plea...
  • Justice? (Score:3, Interesting)

    by ThinkFr33ly (902481) on Wednesday July 05, 2006 @02:17PM (#15661997)
    It's justice for a man to die for theft and fraud?

    I realize he stold millions of dollars. I realize that he cost the jobs of thousands of people. I realize he ruined many innocent people's lives. It's pretty obvious that this guy was a scum ball.

    But how does that justify calling his death "justice"? Would it be justice if he was killed by the government or one of his bilked former employees?

    Take away his money, his reputation, and his freedom... but don't call his death justice.
  • by floop (11798) * on Wednesday July 05, 2006 @02:21PM (#15662038)
    I heard on the radio leaked info from the coroner that he had Viagra in his system. Makes sense; going away to prison for what amounts to a life sentence and all.
    On another note, what's with most press accounts characterizing his death is a tragedy?
  • by Anonymous Coward on Wednesday July 05, 2006 @02:22PM (#15662047)
    This is the reason that every financial planner will tell you that it's a very bad idea to have your entire life savings in one small pot, and that's been well-known to the public at least since the late 1980s. While it's tragic that so many who thought they would be well-off in their retirement years now face a much more bleak future, they brought it on themselves.
  • by iminplaya (723125) <iminplaya.gmail@com> on Wednesday July 05, 2006 @02:32PM (#15662148) Journal
    In my last journal I call him a financial suicide bomber, but I'll go along with the "heart attack" story(kinda) until I see evidence that proves otherwise. Which I'm sure will never surface. Ol' boy got away clean. Ain't no recapturing him.
  • by fermion (181285) * on Wednesday July 05, 2006 @02:37PM (#15662200) Homepage Journal
    First, there are many rich people in Texas. Many of these people have more pathetic rag to riches stories than Ken Lay. Rising from nothing to person of wealth is nothing extremely inteseting. It is the American dream, and is possible for those who wish to work. The thing with Ken Lay was, as oppossed to most wealthy people in Texas, is he appered to have no morals or humility.

    Second, I have never though of being the child as a preacher as a necessary asset. A preacher asks for money in the name of god, not for the value of a direct service or product. There was a time when this was ok, like for a King or a Lord or something, where the sefs starved while one sat in a guilded highrise. But America now mostly knows that work is what brings wealth, and there is no cosmic cash machine. However, if one is raised on the principle of entitlement, then one might do anything to insure that entitlement.

    Third, independent persons with knowledge knew Enron was bad juju. I myself was told by those in the know to stay away. It was not just that Enron was encoraging staff to buy Enron stock, almost every company was guilty of that practice. It was not just that Enron was booking and paying commission on sales that generated not positive cashflow. Again, that was a standard dot com practice. Rather, it was the products made no sense and there was no core direction. As was suspected before the fact, and known after, the products were shills of productivity.

    In the end Ken Lay was nothing special except for his cluelessness and lack of humility. Many people realized he was simply incompetent, and would have accepted a statement of responsibility and an apology. Rather, he his behind technicalities and avoided the responsiblities that were ultimately his as the head of the enterprise.

  • Re:What The F!CK (Score:3, Interesting)

    by dracphelan (916527) on Wednesday July 05, 2006 @02:42PM (#15662263)
    Let's see. While this person who has done no physical harm (and is a first time offender) is awaiting sentencing which murederer, rapists or other violent felon should we kick out to make room for him. (At a cost of almost $3000 a month.) I have a friend whose husband threatened her and her son's life and had a 7 hour stand-off with the police. The stand off ended after the police had fired over 12 rounds of tear gas in the house. He got out of jail less than a month later on a plea bargain. In a court hearing today on a protective order, he again threatened her and this time included her friends. Who is the one who needs to be in jail more? Yes, Ken Lay and many other people harmed the finances of many people. However, IMO, there are people walking around free who deserve prison time much more than they do.
  • by Scareduck (177470) on Wednesday July 05, 2006 @02:44PM (#15662287) Homepage Journal
    According to the Wall Street Journal Law Blog [wsj.com], Lay's death might cause his conviction to be expunged.
    Question: What happens to Lay's conviction?

    Answer: Lay's conviction might be expunged, says criminal law professor Peter Henning in a fascinating post on the White Collar CrimeProf blog. Citing Fifth Circuit law (the federal jurisdiction encompassing Houston), Henning says that when a defendant dies before appellate review of a conviction, the death "abates, ab initio, the entire criminal proceeding." In a recent Fifth Circuit decision, United States v. Estate of Parsons, the court explained that "the appeal does not just disappear, and the case is not merely dismissed. Instead, everything associated with the case is extinguished, leaving the defendant as if he had never been indicted or convicted." The Fifth Circuit explained the rationale for the rule: "The finality principle reasons that the state should not label one as guilty until he has exhausted his opportunity to appeal. The punishment principle asserts that the state should not punish a dead person or his estate."

  • by JDAustin (468180) on Wednesday July 05, 2006 @02:46PM (#15662296)
    I remember the rolling blackouts and work in the SF bay area. I also remembering preparing ahead so that the 24/7 production servers were on battery for the one hour the blackout lasted. Planning ahead helps here.

    Now as to tha cause, it wasnt only Enron making a buck or the idiotic method of de-regulation. One of the main problems is the enviros in Cal prevented new power plants from being built in the state since the 1970's.
  • by ScentCone (795499) on Wednesday July 05, 2006 @02:47PM (#15662312)
    The Republicans are just more blatant about it

    Blatant? How about a sitting senator that considers naming everything in West Virginia after himself to be his top priority? That, and having his friends in the road business pave it over with your tax dollars. That is pretty blatant... but it's not nearly as delicious as a congressman with $90,000 in his freezer. No, blatancy is not peculiar to one party or the other.
  • by vought (160908) on Wednesday July 05, 2006 @02:49PM (#15662328)
    Because of him, hundreds of Enron employees lost their retirement funds, and thousands of investors got screwed.

    Try tens of thousands of employees and tens of millions of investors and California/western energy customers. Enron sucked billions of dollars out of California in six weeks. Enron sucked billions out of their own employees' pockets - where did it all go, friend?

    No punishment is too egregious for Skilling, Lay, and friends. I predict that Skilling's penalties will be mighty indeed, now that Lay's not there to kick around anymore.
  • by Anonymous Coward on Wednesday July 05, 2006 @02:50PM (#15662339)
    Large portions of Buffet's fortune derive from government bailouts of his insurance companies in the early days, don't they ? He would buy insurance companies, use the premiums to invest in more companies, and if a hurricane hit while his money was tied up, instead of selling his investments to pay the claims he'd get the government to bail him out with some cash or loans, right ? I have this on verbal authority, and see no mention of it on wikipedia, so if anyone can confirm or deny please respond.
  • Sentencing? (Score:5, Interesting)

    by MrCopilot (871878) on Wednesday July 05, 2006 @02:52PM (#15662358) Homepage Journal
    IANAL but,

    He dies before sentencing, Now we have no yardstick for similar crooks in the future, no order of restitution to be paid. Inheritance gets whatever he had left + life insurance benefits (which I bet is a pretty good chunk of any state budget)

    A Republican friend of mine mockingly said "How dare he die before we get a chance to punish him." What he say in jest, I say in earnest.

    Personally, I would have liked to see him live a long, long, long life breaking rocks in the hot sun. Since he probably would have ended up at Club Fed, I hope it hurt a tenth as much as losing your retirement and life savings overnight.

    As an Atheist, I get no satisfaction from him keeling over. I literally feel robbed, and I had no money in their company. The people who did probably feel robbed all over again.

  • "I'm not Dead Yet!" (Score:3, Interesting)

    by doublem (118724) on Wednesday July 05, 2006 @03:01PM (#15662437) Homepage Journal
    Is he REALLY dead?

    Most of his cash "vanished" shortly before his arrest, and his assets were never frozen.

    When Lay collapsed, his personal assistant called Lay's personal doctor, not an ambulance. It was Lay's personal physician who pronounced Lay dead.

    Lay's will, revised just a couple of months ago, calls for his cremation, and his widow was out of the country when he died. She's reportedly having medical complications from "The shock of her belove husband's sudden death." As a result, she's not expected to return to the states for the funeral.

    Details on who signed the death certificate are fuzzy, but there are no plans for an autopsy. He's scheduled for cremation tomorrow morning.

    Any bets there's no actual body in the casket, or if there is, it's not Ken Lay's?

    Billions are now being spent nationwide by American CEOs on similar contingency plans for faking one's own death and moving vast financial resources to a safe location out of the country.

    Ken Lay has become quite a roll model for Corporate CEOs all over the country. He made a vast fortune, and despite being caught, manged to keep a large number of his cohorts from facing any real repercussions while escaping with his own fortune largely intact.
  • by lbrandy (923907) on Wednesday July 05, 2006 @03:15PM (#15662574)
    Why is it that every time I see someone slam the democrats, the response is usually countering the content of the slam, but when someone slams the republicans, the response is an acusation of blind partisanship, independant of the content of the slam?

    (tongue-in-cheek) Maybe it's because Democrats are more apt to use sweeping self-righteous generalizations that need to be pointed out for their hypocrisy? I've just done it twice in two posts. Go me. (harhar).

    I'm no Republican. I consider myself squarely libertarian.. and every time I see a $color-stater jump and try to pin issues on $othercolor-staters, when they are all roughly equally guilty, a little piece of me dies. I would do the same for a Republican who blames child-molesting on Democrats. Bad people are bad people, and they need to be rooted out. Pinning it on the "color" your team is playing against because you can't see the forest for the trees is the reason this shit is the way it is. That goes for "corruption", "child-molesting" or "accusations of blind partisainship"
  • by Anonymous Coward on Wednesday July 05, 2006 @03:50PM (#15662853)
    Whilst suppliers and shareholders have undoubtedly been 'hurt' financially Enron's collapse, die-hard Kiyosaki 'E' types have learned a hard lesson here.

    Undoubtedly many people have had their financial plans left in tatters, which is disgraceful, however it also emphasises the fact that we should all take greater responsibility for our own finances. Engaging yourself in 'employment' (PAYE here, I know the US has an equivalent) is actually a very, very risky business, for several reasons:

    1. You rarely, if ever, develop important life (economic and political) skills outside of your narrowly defined role.

    2. Not having these skills means you'll struggle to run and market your own business should you want to.

    3. You have no control over business decisions taken by your employer which may put your own interests at risk.

    4. Many employees - usually, though not exclusively, older ones believe in a number of fantasies, notably that the company can always afford to pay them more (they *know* this without even a rudimentary understanding of finance or accounting), that their company 'pension' is guaranteed (they always seem surprised when a company suddenly announces that its ponzi scheme is siphoning off so much income that they have to stop 'investing' in it lest they go under) and that - at least here - the government will pay their way should all else fail.

    I appreciate point 4 is longwinded, however, if you are determined to spend 40+ years of your life in environments staffed by those with an 'employee' mentality, then you too run the risk of believing in their fantasies. Underlying this, however, is the schooling system in both the US and UK, determined as it is to prepare our good citizens for life in the 19th century. If you really want to limit damage from Enron-esque disasters, then teach people en masse how to steer their own financial course instead of depending on a 'jobby' (ala Billy Connolly) and government.

    As for Sarbox, its high time that internal operations were made more transparent to potential investors. Afterall, monopoly product or not, significant systems weaknesses and failures can wipe out even the richest corporations. Barings Bank anyone?

    Anyway, everybody should have sympathy for those who don;t really have enough time left to prepare to retire now. Those responsible for this debacle richly deserve their jail time. Its just a shame that the same principle doesn't apply to politicians who mislead their people, though most (not /. ers, though I sometimes wonder) are too naive to fully appreciate the balances any government must strike when running a country, so the degree of bullshit is, or was until the last few years, understandable.

    2% tied-in annuities?

    You might as well keep your money under the mattress - factoring in liquidity and current inflation, its probably a better investment....
  • by Anonymous Coward on Wednesday July 05, 2006 @03:57PM (#15662897)
    Yes. Invest on the presumption that somewhere along the way, fraud is going to hit you. Whether it's because you own a Worldcom/Enron/Adelphia-type stock directly, or one of your mutual funds has invested in one or more of them, at some point you will be affected. That's why some of your money should be in an FDIC-insured bank, some in bonds, some in mutual funds, and perhaps some in money market and direct investment accounts. If you really believe in a company, then go ahead and put some money into it, but don't bet the whole farm on it.
  • by RexRhino (769423) on Wednesday July 05, 2006 @04:21PM (#15663047)
    PUBLIC CORPORATIONS ARE NOT PEOPLE!!!!11!!!!

    No, but people go to jail if they don't comply with SOX. People ARE people. And people are going to be sent to jail, not because they lied about how much money their company mankes, but because they can't prove that they didn't lie about how much money their company makes.

    People should NEVER, EVER, EVER, have to prove their innocence! That is not the way laws are supposed to work! Innocent until proven guilty is supposed to be how the law works, even for people who work for comporations!

    I'll not touch your liberaltarian ranting that follows...I hear they're infectious.

    You won't touch my "libertarian ranting" because you know it is true, and there is no arguement you can make. Overly complicated and overly vauge regulation, which is open to widely different interpretations, leads to a situation where the law can be used to harrass people for political reasons. And trust me, it is not going to be the "Big Evil Corporations" who are going to be the ones stung. You are living in a country where the Patriot Act is being used as a tool to go after local drug dealers, and the RICO act is being used to convict people in absentia for running online casinos IN COUNTRIES WHERE IT IS PERFECTLY LEGAL! You know damn well that the government is going to have a field day with this, and lots of people are going to go to jail on some SOX technicality after they speak out against the president, or donate a lot of money to the losing candidate in an election, or when the president decides to reward a friends company by taking out the competition (ever hear of Halburton?).
  • by cpu_fusion (705735) on Wednesday July 05, 2006 @04:36PM (#15663161)
    Will this protect his estate from civil cases, I wonder.

    If so, it would inspire suicide intended to clear one's name, and protect one's $$$ from being taken from offspring.

  • Umm... (Score:3, Interesting)

    by mengel (13619) <mengel@users.sou ... t ['org' in gap]> on Wednesday July 05, 2006 @04:54PM (#15663264) Homepage Journal
    ... How about:
    • creating a dummy company
    • giving Enron money to said dummy company
    • taking money back into Enron from said dummy company
    • reporting both of the above as revenue
    • lather, rinse, repeat to the tune of a few billion.
    That doesn't sound like fraud to you? It sure does to me...

    Can I prove it? Of course not -- but who cares.

    Did the Feds prove it? You betcha.

  • by Moraelin (679338) on Wednesday July 05, 2006 @05:56PM (#15663563) Journal
    Reminds me of the Is Your Boss A Psychopath [fastcompany.com] story, that was linked to last year on Slashdot.

    Now I don't know enough about Ken Lay to proclaim whether he was a psychopath or not, but it sorta makes me wonder. I mean we already know that he had no remorse in shafting the investors, the employees and everyone, but the GP's moving testimony just makes some more pieces fall into place.

    Here are some relevant paragraphs:

    In contrast, corporate psychopaths typically grew up in stable, loving families that were middle class or affluent. But because they're pathological liars, they tell romanticized tales of rising from tough, impoverished backgrounds. Dunlap pretended that he grew up as the son of a laid-off dockworker; in truth, his father worked steadily and raised his family in suburban comfort.


    Does it sound yet like Ken Lay telling employees a rags-to-riches story about creating the company from nothing?

    Also worth remembering:

    Psychopaths succeed in conventional society in large measure because few of us grasp that they are fundamentally different from ourselves. We assume that they, too, care about other people's feelings. This makes it easier for them to "play" us. Although they lack empathy, they develop an actor's expertise in evoking ours. While they don't care about us, "they have an element of emotional intelligence, of being able to see our emotions very clearly and manipulate them," says Michael Maccoby, a psychotherapist who has consulted for major corporations.

    Psychopaths are typically very likable. They make us believe that they reciprocate our loyalty and friendship. When we realize that they were conning us all along, we feel betrayed and foolish.


    So in a way I'm not surprised that someone would be manipulated to the point of respecting the guy who shafted him. Psychopaths are _good_ at that kind of thing. Damn good. _Incredibly_ good. Unless you happen to be the direct target of their mind games or power games or intimidation games (they do all that a lot), you could live next to one for a decade and respect the heck out of him.
  • by rleibman (622895) on Wednesday July 05, 2006 @06:22PM (#15663674) Homepage
    Man, that was the first thing that came to my mind as well when I heard. At least you're not alone in thinking this!
  • It was SO the CIA (Score:3, Interesting)

    by crabpeople (720852) on Wednesday July 05, 2006 @06:41PM (#15663767) Journal
    The CIA's favourite techniques are:

    1) Plane/car crashes.
    2) Heart attacks.

    They didnt want him talking. They were probably stringing him along the entire way saying things like, "its ok lay my boy, well get you out of this mess!"... "Why dont you take a nice vacation to colorado and well arange everything!"

    The first thing i thought when i saw this this morning was CIA. Its wayyy too convienient. Kinda funny it made slashdot though, wasnt expecting that.

  • by Anonymous Coward on Wednesday July 05, 2006 @06:43PM (#15663772)
    FACTS:

    1. The employees of Enron lost an enourmous amount of money.
    2. Enron stockholders lost billions of dollars.
    3. Ken Lay's net worth didn't come anywhere near the money "lost".
    4. The money didn't vanish or get teleported to Mars.

    SIMPLE SUPPOSITION:

    The law of "Conservation of Wealth" requires that someone on the outside became very, very filthy rich as Enron went down the toilet.

    OBVIOUS QUESTION:

            Where did all that money go??

    HINT:

    To better understand the game, try Google or Wikipedia searches for
            Michael Robert Milken
            Neil Bush

    Have fun!

  • by wtansill (576643) on Wednesday July 05, 2006 @08:16PM (#15664151)
    Um, does anyone know whether the gov't seized all his assets before he croaked? Because if they didn't, his heirs might just try to take what's left "while the body's still warm". I haven't heard of passing a sentence on a dead body before, but I'm sure there's a legal battle in there somewhere that lawyers are chomping at the bit to get in on.

    I'd hate for "Kenny-Boy" to get the last laugh on America, you know, by dying early.
    He might just. As I was driving home this evening a blurb came over the radio that the 5th cirtcuit court (I think that's what they said -- I only snapped to attention on the next sentence) has a history of "extinguishing" the conviction of a person who dies before their appeals are exhausted. It would be as if the trial, or even the indictment, never happened. Now that's from the crimial side of things (and at present it's only the newscaster's speculation), but any pending civil suits could still proceed regardless of what the criminal court does or does not do. First I've heard of such "extinguishment"...
  • Re:How Convenient... (Score:2, Interesting)

    by iocat (572367) on Thursday July 06, 2006 @01:11AM (#15665232) Homepage Journal
    The other thing to consider is that... sometimes coincidences happen! People die all the time, and 64 year old dudes face 25 - 40 years in prison are probably under a lot of stress at the best of times. Combine that with high altitude, who knows. Not everything is a conspiracy.

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