Ken Lay's Drama Defense

Ken Lay's attorneys want his jurors to know that the former Enron Chairman already has suffered greatly from the grisly fall of his beloved and once falutin' company. They want the jury to imagine Lay, the once-genial face of the company, "locked in a cage" in prison for the rest of his life having lost hundreds of millions of dollars because of his misplaced trust in the company. This "I'm a victim, too" defense is bold, almost brash, and it tells us that Team Lay feels it needs to play the emotion card despite a fairly week prosecution case against their client.

Lay's attorney Bruce Collins has echoed many of the same things his predecessor at the podium, Daniel Petrocelli, offered on behalf of his client, Jeffrey Skilling. Like Petrocelli, Collins reminded jurors of the lack of documentary proof in this complex financial case. And, like Petrocelli, Collins attacked the credibility of star prosecution witness Andrew Fastow, the former CFO of Enron, whom Collins says has made up an intricate "fable" linking Lay and Skilling to fraudulent conduct.

Collapse doesn't mean fraud, Collins told jurors, and the collapse of the company was as much about investor and analyst panic as it was about financial conditions. The idea here is to blame the company's implosion upon outside forces and by extension to neutralize whatever legal responsibility Enron's leaders had in what ultimately happened to the company, its shareholders and employees. The problem is, at the same time Collins told jurors that his client accepts responsibility for what happened to Enron. And it's hard to have it both ways.

Are jurors going to buy it? Are they going to be willing to see Lay as merely the highest-profile victim of Enron? Not surprisingly, we've heard whispers of a comparison between what happened with Lay and Enron and what happened with the captain of the Titanic. In both instances, the ship was racing ahead of the captain's ability to protect it. In both cases, the captain was negligent and perhaps even reckless. In both cases, lurking in the shadows, was the instrument of the vessel's destruction. An iceberg. A series of fraudulent off-the-book partnerships and otherwise terrible management practices.

But here is where the analogy ends. The captain of the Titanic went down with the ship. Captain Edward John Smith died in the freezing waters of the North Atlantic on that calm April night in 1912. Lay's folks are trying to sell jurors on the idea that he went down with his ship, too, and deserves no further punishment. "Don't let anyone tell you he didn't go down with the ship," Collins told jurors. "He did." Well, actually, he didn't. Lay is very much alive and well and fiesty and able to enjoy his wife and family-- rich or poor-- and he'll continue to be able to do so unless and until the jury says otherwise. Look for prosecutors to mention that when they get their final turn tomorrow.

I'll post later tonight or early tomorrow after all the defense closings are done. Take care and thanks for reading.

By  |  May 16, 2006; 4:45 PM ET
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Let me do something that few seem willing to do: defend Ken Lay. I agree he has not gone down with the ship the way the Titanic captain did. I also agree that Lay was negligent as Chairman in his later years. Lay ran this company since 1985 and it's hard to figure why he decided to commit securities fraud at the tail end of his career. It simply does not make sense. I did not follow the trial that closely, but it seems that Lay did not know Fastow and others were stealing from Enron. If he did know, then why wasn't he in on the deal? As CEO, why would he let underlings make more money from Enron that he did? It is not clear whether he fully understood that Enron was a house of cards. Maybe he did, but he figured that he could find a way out. I don't know. I think he was civilly negligent and I think shareholders have every right to try to take every dime he ever made. But, I have a hard time trying to make him criminally responsible.

Skilling is a different matter....

Posted by: Mark | May 16, 2006 11:58 PM

Ken Lay is very much alive... open your eyes and you will see.

Posted by: Cat-in-the-haT | July 7, 2006 07:25 PM

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