HOUSTON - Now that he's resigned from Enron Corp.'s board of directors, Kenneth Lay is just another stockholder.
The fallen energy giant's former chairman and chief executive resigned from the board Monday, cutting his last tie beyond stock ownership to the natural gas pipeline company he helped transform into the No. 7 company on the Fortune 500 before it collapsed in bankruptcy.
Lay maintained his spot on the board after resigning as chairman and chief executive Jan. 23 when he cited his inability to run the company properly amid a maze of investigations and ever-increasing lawsuits stemming from its downfall.
The same day he gave up his position on the board, he was to have testified before two congressional committees. He opted out of the appearances on Sunday, deciding to remain publicly silent about Enron's collapse.
"I want to see Enron survive and successfully emerge from reorganization," Lay said in a statement. "Due to the multiple inquiries and investigations, some of which are focused on me personally, I believe that my involvement has become a distraction to achieving this goal."
An Enron spokeswoman, Karen Denne, said the company regretted "the circumstances that have led to" Lay's resignation and wished him "all the best."
Lay, 59, agreed to appear at the hearings in Washington on Monday and one on Tuesday with no immunity guarantees. But his lawyer, Earl Silbert, advised Lay to cancel those appearances after several members of Congress appeared on Sunday news shows accusing Lay and other Enron executives of committing crimes.
Henry T.C. Hu, a corporate law professor at the University of Texas, said Lay's influence already had ebbed dramatically amid the ever-growing Enron controversy and his resignation as chairman and CEO.
"Presumably he's not carrying much influence on the board anyway," Hu said. "What really matters in terms of who's driving the show is the creditors committee."
Lay was Enron's chairman and CEO since 1996, after it was formed by the merger of Houston Natural Gas and Omaha, Neb.-based InterNorth in 1985. He retired as chief executive in February 2001, but resumed the position when his successor, Jeff Skilling, quit in August.
John Moore worked for InterNorth before the merger and stayed with Enron's pipeline group until he was laid off with thousands of other employees after the Dec. 2 bankruptcy filing. He said Lay's announcement was no surprise.
"It just took him a long time to do it," Moore, said. "He's got a lot on his plate. I just wonder what's next."
In an internal probe released Saturday, board member William Powers Jr., dean of the University of Texas School of Law, said top members of Enron's financial team created or invested in partnerships that facilitated accounting abuses that earned them millions as others charged with oversight -- including Lay -- failed to watch them.
Lay told Powers and two other board members who conducted the probe that he had only cursory knowledge of the employees' involvement in the partnerships.
Lay has drawn severe criticism for urging Enron workers to buy company stock a month after he was warned by executive Sherron Watkins in August that questionable accounting practices could cause the former energy giant to implode in scandal.
Enron's bankruptcy filing left thousands of employees jobless amid revelations of those accounting practices and restated earnings that erased millions of dollars in profits since 1997.
Those partnerships, which earned millions of dollars for Enron executives and employees who ran and invested in them, helped the company keep half a billion dollars in debt off its books while maintaining what appeared to be a healthy credit rating.
Friday
March 14th, 2025
12:01AM
