Kenneth Lay epitomized corporate greed

Published 9:00 pm Sunday, July 9, 2006

The death last week of Enron founder Kenneth Lay wasn’t all that surprising to me.

Lay had been under tremendous stress and was facing decades in prison for a massive business fraud that had brought tremendous upheaval to the lives of thousands of people.

What surprised me was the reaction.

When I arrived at work a few hours after his death by heart attack was announced, the first words out of a colleague’s mouth were, “I want to see the body.”

Journalists often say goofy things like that, but another colleague said that the first thing she’d heard from a nonjournalist was that there was probably a quick cremation under way with a homeless man who looked a lot like Lay.

Even more outrageous was the headline on the New York Post tabloid, which referred to “Cheato Lay” and suggested the body be carefully scrutinized.

Lay was a definable person. At 64, he left a wife, children and a dozen grandchildren. He had been a civic leader in Houston, a contributor to and confidant of presidents. A man with homes in the swanky resort of Aspen, Colo. A man whose net worth was once estimated at $400 million.

But Lay was also an icon. An icon of corporate greed.

I never for one minute believed his defense that he was completely out of the loop in the conspiracy and fraud that dragged down a corporate giant. Others have labeled his strategy as the Sgt. Schultz defense, based on the character on the old TV sitcom “Hogan’s Heroes” who ran around saying, “I know nothing, I see nothing.”

Lay’s defense would also have been comic had the events not been so serious.

And the potential victims weren’t just in Houston.

Up until a few days ago, Enron was still trying to force the Snohomish County PUD to pay more than $100 million in penalties for not completing an energy supply contract even though Enron is out of the power supply business. The Federal Energy Regulatory Commission recently ruled that the PUD didn’t have to pay, in part because it had been shown that Enron manipulated prices during the 2000-2001 West Coast energy crisis.

Many people lost their life savings when Enron collapsed. Among them was Sherri Saunders, who worked for Enron and its predecessor company for 24 years before she was laid off in 2001 and lost $1 million in retirement savings.

Lay, she said in an Associated Press story, “got off too easy” by dying before he was sentenced for his fraud and conspiracy convictions.

Because of Lay and others, society has developed some pretty harsh opinions on business executives.

The Business and Media Institute recently issued the findings of a study that suggest that television is “overwhelmingly negative toward business.” It suggested that negative plots about businesses and business people outnumber positive ones by 4 to 1 and that business people are typically villains, not heroes.

I haven’t looked at how the study was conducted and I can’t speak for the data. But I don’t doubt that television has a lot of plots with evil, greedy business people. And I don’t doubt that people are suspicious about businesses people and their conduct.

They should be.

Whenever money is involved, there’s the opportunity for greed to take over.

Lay himself, the government estimates, garnered $43 million from the Enron fraud.

So I shouldn’t be surprised if people thought Lay’s death might be a scam. That he’d head off with his remaining millions for some small foreign country. It’s sad that his death would evoke such overwhelming skepticism, but it may also be healthy.

People should never stop thinking about what can go wrong when their life savings are at stake.

Due to what I consider a quirk in the law, Lay’s death likely means that his six-count conviction will be erased since it was on appeal and Lay hadn’t been sentenced.

But that won’t stop me from thinking of him as a defining icon for corporate greed.

And don’t be surprised it there’s soon to be a new Enron-type movie. Here’s betting that the ending’s likely to have an unusual twist.

Mike Benbow: 425-339-3459 or benbow@heraldnet.com.