Lingering Anger Still Directed Against Enron's Once-Trusted Chief Executive
By Peter Behr
Special to The Washington Post
Friday, July 9, 2004; Page E01
In Houston, the wounds from Enron Corp.'s collapse are still fresh. So is the anger at the company's founder, Kenneth L. Lay.
Matt Hommel, a software developer at Enron's Houston headquarters before its failure, welcomed the federal government's charges against Lay that were made public yesterday. "I'm pleased that he's been indicted, finally. It's been a long time coming," he said.
The same sentiments were not hard to find outside Houston, as well, among the thousands of former Enron employees whose jobs and savings vanished when the company blew apart at the end of 2001. "I'm glad they are finally trying to get some of the top guns and put the blame where it belongs," said Roger Boyce, 70, former human relations director of an Enron pipeline company in Minnesota. Boyce figures he lost more than $2 million in retirement savings when the Houston company collapsed. The loss has sent him back to work again.
Even some of Lay's supporters said yesterday that the wounds from Enron's devastating downfall have not healed in Houston, and that despite a career of philanthropy and service for his home town, Lay remains widely blamed for what happened.
"A lot of people sadly have made up their minds without getting all the facts," said Sue Walden, a friend and business associate of Lay. "People want a scapegoat. It's understandable. It's still like a bad dream here for people," added Walden, one of those who believes Lay did not know about the wrongdoing inside the company.
On the day that federal agents took him into Houston's federal courthouse in handcuffs, the former Enron chairman began a campaign to win back public support with a televised news conference. Surrounded by three dozen family members and friends, including pastors of two prominent Houston churches, Lay said he "continues to grieve" for Enron families. "I think we'll grieve about that until our deaths."
Those words ring hollow to Boyce, Hommel and others. Enron employees had a great deal of trust in Lay and the company's top leaders, Boyce said. "That's why so many employees got burned badly. When he told us everything was in good shape -- when it wasn't -- that was a horrible deception. We all felt betrayed."
"I don't know that people are actually throwing Ken Lay indictment parties," Hommel said. "But there are still a lot of strong emotions about what he did."
About 20,000 Enron employees suffered hundreds of millions of dollars in losses in retirement and savings accounts when Enron's stock crashed, said attorney Eli Gottesdiener, who represents former employees in a civil suit against the company, Lay and other officials.
A former executive who worked with Enron at the end said he still believes Lay did not know about criminal activity within the company. "I take him at his word that he was unaware," said the executive, who has moved to another company and asked not to be quoted by name to avoid further association with Enron. The executive added, "He was familiar with many of the things going on in the company. . . . He was well in position to find out if he chose."
At yesterday's news conference, Lay was in his familiar stance, confident and composed, noted Houston attorney Philip Hilder, who has represented a number of former Enron employees during the investigation. "He's playing in the court of public opinion," in a community where Lay and his company were heavy contributors to charities, museums and sports teams, Hilder said. "Enron money touched a lot of places."
Weighed against that is the tremendous damage that Enron did in its hometown. "A lot of people were very personally affected," Hilder said.
Walden said that Lay is "upbeat and positive," and focused on his new business consulting ventures. "That is what is keeping him going," she said.
Another member of Houston's business community said that Lay's former colleagues remain standoffish. Lay "is a Flying Dutchman, going from port to port," still without a welcoming home among his city's elite.
The wife of a former Enron employee, who asked not to be identified to avoid calling attention to her husband, said that she still believes Lay is innocent of criminal wrongdoing. "He is a strong Christian, and he looks to the Lord" to uphold his innocence, she said. "If he is, that will come out. If he is not, you cannot hide that from the Lord, either."
© 2004 The Washington Post Company
Today, 1 p.m. ET: Bethany McLean, author of "Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron"
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Video: Kenneth L. Lay responds to the charges brought against him.
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_____Enron in Photos_____
Enter Photo Gallery Even since the giant energy firm Enron collapsed in 2001, former CEO Kenneth Lay has insisted that he was unaware of fraudulent accounting and other criminal activities at the company. Nearly three years later, Lay will face criminal charges for his role in one of the largest corporate bankruptcies in history.