Lay Ends Testimony; Character Witnesses Next In Houston, federal prosecutors and former Enron Chairman Kenneth Lay continue to spar on the final day of Lay's testimony. Assistant U.S. Attorney John Houston accused Lay of ignoring concerns about the company's accounting. He also pressed Lay for details on $70 million he made selling his own Enron stock.
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Lay Ends Testimony; Character Witnesses Next

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Lay Ends Testimony; Character Witnesses Next

Lay Ends Testimony; Character Witnesses Next

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MICHELE NORRIS, Host:

In Houston federal prosecutors and former Enron chairman Kenneth Lay continued their sparring today. Assistant U.S. Attorney John Hueston accused Lay of ignoring the employees who expressed concerns about the company's accounting. And he pressed Lay for details on $70 million he made selling his own Enron stock. NPR's Wade Goodwyn is at the federal courthouse in Houston. Wade, today, I gather the prosecutor wanted to remind the jury that Ken Lay had plenty of warning that the company's finance chief had turned the company's books into works of fiction. Is that right?

WADE GOODWYN: Yes, prosecutors are trying to undermine Lay's credibility. The questions aren't necessarily about a specific charge in the indictment, they're about whether or not Lay was acting responsibly as CEO after he'd been warned about Andy Fastow from several sources. The warnings to Lay began as soon as CEO Jeff Skilling left the company. A number of executives wrote emails, whistleblower Sherron Watkins actually met personally with Lay to relay her concerns. And then in October of 2001, there was a series of articles in the Wall Street Journal that targeted Fastow. Prosecutors, Hueston, he asked Lay how many emails and notifications would it take for you to start asking questions of Andy Fastow? The government wants the jury to feel that Lay should've done more to find out what was really going on at his company, and that he should be held accountable because he didn't.

NORRIS: So the point is, Ken Lay was warned. How does Ken Lay explain his slow response to those warnings?

GOODWYN: You've got several explanations. On the warnings he got from employees, Lay testified that he knew more, he thought that he knew more about the company's accounting than they did. About the articles in the Wall Street Journal, he said that he believed that the newspaper had what Lay called a hate-on for Enron, and so he disregarded their reporting as being based on rumor mongering to use his phrase. When Hueston continued to press him about his allegedly poor judgment, Lay got angry and he snapped, the corpse is on the gurney, Mr. Hueston, and you're carving it up any way you want to carve it up. But I didn't have the luxury of that in the heat of battle. Basically Lay's defense was that he did the best he could under difficult circumstances.

NORRIS: And just quickly, Wade, the government also focused on Lay's personal finances today. Quickly tell us a bit about that.

GOODWYN: I think the point was to drive home to the jury that Lay was living high on the hog. The family went to the French Riviera. Hueston hammered Lay about withdrawing the last $1 million from a line of credit Enron had provided just five days before the company went bankrupt. And then the Ken and Linda Lay Foundation sold 500 shares, 500,000 shares of Enron stock three hours before the company filed for bankruptcy. Lay got mad and said it was his wife, Linda, who sold those shares, and that he had nothing to do with it. And that his wife wasn't charged with insider trading.

NORRIS: Thank you, Wade.

GOODWYN: You're quite welcome.

NORRIS: NPR's Wade Goodwyn in Houston.

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