"We had realized the American dream." snort snort grunt squeeee
Enron CEO and founder Kenneth Lay spent $200,000 to charter the yacht Amnesia for a birthday cruise for his wife in 2001. There are quite a few photos of the Amnesia on the Web. Here's the Amnesia's hot tub during somebody else's Millennium 2000 cruise in the Caribbean. The folks in the hot tub have nothing to do with Lay; we're just posting it for its inflammatory value. The Amnesia also has a helipad and of course jet skis.
Monday 1 May 2006
Jurors Gawk & Gasp
at Enron Founder
Ken Lay's Lifestyle
by ERIN McCLAM
AP National Writer
HOUSTON (AP) -- Jurors at the federal fraud trial of Enron Corp. founder Kenneth Lay got a glimpse at his lavish lifestyle, including homes in [the Colorado ski resort] Aspen, a vacation on the French Riviera and $20,000 spent on antiques in Spain.
Prosecutor John Hueston introduced the details to suggest that Lay had many ways to cover margin calls issued by banks to which he owed millions of dollars in 2001, just before Enron imploded.
Instead, Lay borrowed cash in $4 million chunks from Enron -- and to pay the loan back each time, he sold the company shares of his Enron stock, sales that did not have to be disclosed immediately to the public.
When Hueston asked whether Lay considered cutting personal expenses so he could borrow less cash from Enron, the ex-chairman said he could not simply turn off his lifestyle "like a spigot."
"We could have reduced some living costs, but as I said earlier, we had realized the American dream," Lay testified Monday, his third day under a tense cross-examination from Hueston. "We were living a very expensive lifestyle."
The prosecutor has suggested Lay improperly led Enron employees to believe he was snapping up Enron shares in late 2001, in the weeks before the company went under. He was indeed buying shares -- but selling far more back to the company.
Lay and former Enron Chief Executive Jeffrey Skilling are accused of repeatedly lying to investors and employees about Enron's prowess when they allegedly knew the company's success stemmed from accounting tricks that hid bad news and inflated profits.
The two men counter that no fraud occurred at Enron other than that committed by a few executives who stole money through secret side deals. They attribute Enron's descent into bankruptcy to a combination of bad publicity and lost market confidence.
Lay's testimony was expected to conclude Tuesday. Four character witnesses, including Houston Astros owner Drayton McLane Jr., are to follow Lay to the witness stand.
For example, to cover a July 26, 2001, margin call of just $483,000, Lay had available $11 million in non-Enron lines of credit, plus $13.5 million in other assets held in brokerage accounts. Instead, he sold stock back to Enron.
Hueston also noted Lay had taken expensive vacations -- the French Riviera in May 2001, a $20,000 antiquing trip to Mallorca, Spain, just six days after he sold $4 million of Enron stock back to the company.
And, in January 2001, for his wife's birthday, he spent $200,000 to charter a boat called Amnesia.
"I remember an Amnesia," Lay said, to the laughter of some jurors. "I think it was appropriately named."
Also Monday, Lay lawyer George Secrest sought later to undo some of the damage Lay may have suffered during his cross-examination.
Lay said, for example, that he could not always rein in the verbal flourishes of his lead lawyer, Michael Ramsey, who earlier in the trial called prosecution witness and former Enron Treasurer Ben Glisan Jr. a "trained monkey" to reporters.
"Mr. Ramsey has a colorful way with words," Lay said.
Ramsey has been missing from the trial for a month after having a stent implanted to relieve blockage in an artery.
Secrest also drew out a forceful defense from Lay of his decision to sell stock back to the company to repay Enron lines of credit. Lay said he complied with all Securities and Exchange Commission rules.
"I believe then -- I believe now -- that I fully complied with the law," Lay said.
Skilling faces 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces six counts of fraud and conspiracy.
Lay also faces a separate trial on bank fraud charges unrelated to the current trial. That case will be tried before Lake without a jury during deliberations in the conspiracy case.
© 2006 Associated Press. All rights reserved.