The government made sure everyone got a good, long look at Kenneth L. Lay in handcuffs yesterday morning.
As the indictments have piled up against lesser officials of failed energy giant Enron Corp., the "perp walk" -- defendant in handcuffs, hustled into the Houston courthouse, obscured by beefy FBI agents -- has typically been over in a few halting steps, as camera crews strained for precious seconds of video that could be looped over and over throughout the day.
Yesterday morning, the cameras fed on Lay. The former chairman and chief executive of Enron is one of the most prominent alleged corporate criminals yet to appear in handcuffs. The symbolism was powerful.
A sole female FBI agent pulled the 62-year-old Lay from a silver sedan parked alone, seemingly in the middle of the courthouse lot. He was stooped slightly at the waist, hands clapped in chrome behind his back. He smiled briefly, then turned right toward the courthouse, showing his back to the cameras, led by an elbow. It took more than a dozen slow steps to cross the pavement.
Prosecutors traffic in image as well as evidence, and yesterday's image sent the message: This moment is for the thousands of former Enron employees, their jobs gone, the thousands of former shareholders, their savings evaporated.
It was a very different image from the one Lay presented later yesterday when he arrived for a press conference at a Houston office building, his pastor at his side, after pleading not guilty and being released on $500,000 bond.
He faced the press and public with the same charm and seeming self-confidence he had used to build Enron into one of America's most admired companies during the 1990s stock market boom. That was a time when the stunning corporate success story he offered, plus a bottomless chest of political contributions, helped open doors everywhere, from the White House to state and foreign capitals around the globe.
Lay took so many questions from reporters yesterday that his lawyer barely got to speak.
With family members seated in the front row and applauding his performance, Lay reiterated that he was unaware of fraud at Enron. He blamed the company's former chief financial officer, Andrew S. Fastow, for devising financing schemes that secretly enriched Fastow and several colleagues, but destroyed public confidence in Enron when they came to light.
As 2001 began, Lay's personal fortune exceeded $400 million, most of it in Enron shares. Business magazines lionized Enron as one of the world's best-run companies, and Lay was making plans to leave his Houston energy trading company for a new life as world statesman and financier.
But Lay had to resume leadership after Jeffrey K. Skilling, his handpicked successor, suddenly resigned in August 2001. So he was in charge that fall as Enron collapsed in a storm of financial scandals. Lay's public image suddenly flipped. He turned overnight into an untouchable, lampooned on television talk shows, photographed refusing to testify before Congress. He was attacked by members of Congress, creditors and former Enron employees as a symbol of executive greed.
Now, following Lay's indictment, a federal jury may render a definitive portrait, determining whether he was victimized by his subordinates or was the victimizer, concealing serious financial problems at Enron while privately selling $70 million worth of company shares from his own portfolio in the months before it declared bankruptcy.
After Lay took over from Skilling, he told investors on a conference call: "There are no accounting issues, no trading issues, no reserve issues, no previously unknown problem issues. I think I can honestly say that the company is probably in the strongest and best shape that it has probably ever been in."
In fact, the government says, Enron's two most important new ventures were failures, its debts were mounting and its cash reserves were shrinking, a dire condition for a company that made its money trading energy.
Could Lay have been in the dark? By most accounts, though prosecutors challenge the perception, Lay relied heavily on top subordinates to run the company while he attended to big-picture strategy and lobbying.
That was a role he had been preparing for most of his professional life.
Lay was born in 1942 in rural Tyrone, Mo., the son of a Baptist minister who held two or three other jobs to pay the family bills. Lay told interviewers he spent hours on the family tractor, dreaming of big things he hoped to accomplish. Despite meager finances, his parents saw to it that their son had the chance at a college education, and he made the most of it, ultimately earning a doctorate in economics.
As a Navy ensign stationed in Washington during the Vietnam War, he gained attention through his work on a high-level Pentagon study and then, with help from a former college professor, landed a staff job at the Federal Energy Regulatory Commission. There he got an insider's look at how persuasion, political influence and lobbying could change policies and create lucrative business opportunities for energy companies.
Enron's business strategy would be built on those lessons as Lay and Skilling transformed the company from a gas pipeline firm into a powerful middleman on trades of natural gas and electricity.
Political contributions helped cement a close relationship with the Bush family. Enron, its executives and family members were the largest "lifetime" donors to the campaigns of George W. Bush, according to a study by the Center for Public Integrity. Yet Lay was closer to Bush's father, being offered a Cabinet post as commerce secretary, spending the night at the White House, and co-chairing the host committee of the Houston convention that renominated him.
Lay presented Enron's agenda to Vice President Cheney early in 2001, and the new President Bush, who called Lay "Kenny Boy," and Cheney sided with Lay in rejecting California's pleas for price controls during the state's electricity crisis. But in Enron's final month before bankruptcy, members of Bush's Cabinet turned down Lay's desperate appeals for help.
Some former executives say he was allergic to bad news about the company. Sherron Watkins, the mid-level Enron executive who took detailed warnings to Lay about Fastow's off-the-books partnerships, said Lay recoiled from the accusations. "Andy's a good CFO, right?" Lay interjected, according to Watkins's account. "He's doing a good job, right?"
A voluminous, critical report by R. Neal Batson, a court-appointed bankruptcy examiner, says that Lay was surrounded by warnings that the company was not the success it claimed to be. In 2000, for example, the firm reported $4.8 billion in cash flow for the year, but $4.7 billion of that appeared in the fourth quarter.
For several years, in fact, Enron's cash flow balances had mostly materialized in the fourth quarter and depended heavily on well-hidden transactions that Enron listed as commodity trades but were really disguised loans, Batson's report concluded. It "is clear that Lay and Skilling failed to respond to red flags" about the company's problems, Batson said. In its civil charges, the Securities and Exchange Commission says Lay was briefed on the hidden loans.
Federal prosecutors have spent two years investigating whether Lay was motivated to hide Enron's problems because he wanted to unload a large stash of its stock.
Lay bought some Enron stock in the final months before bankruptcy, as he urged employees to do, but sold much more, the indictment alleges. Lay and his attorneys respond that he was forced to make these sales to repay bank loans, and that his purchases were evidence of his faith in the company's ability to survive.
Lay's version of events now will be tested before a jury.
"Was there intent to commit fraud, or was he negligent?" said Nancy Rapoport, dean of the University of Houston Law Center. "Prosecutors have to make the case that there is no other reasonable explanation for what he did other than an intent to defraud."
Staff writer Frank Ahrens and special correspondent Steven Long contributed to this report.