Former Enron Chairman, Ken Lay
March 9, 2006

Editor’s Note: This is the next installment in our series of interviews with a few bad men.

PPE: Mr. Lay, thank you for this exclusive web interview. We’re honored you chose PurpleThink.com. You know that anything you say can be used against you in your court trial. So do you swear to tell the truth, the whole truth, and nothing but the truth, so help you God?

KL: Yes, I do.

PPE: Thank you sir, would you have a seat?

PPE: Ken, when you learned of the letter from Andy Fastow, your CFO, you had a meeting with two senior officers, is that right?

KL: Yes.

PPE: The CEO Jeff Skilling and the company Vice Chariman, Clifford Baxter

KL: Yes.

PPE: And at present, Clifford Baxter is dead, is that right?

KL: I’d like to know just what you are implying?

PPE: I’m implying simply that, at present, Vice Chairman Baxter is not alive.

KL: I’m sure I don’t need to be here to confirm that information.

PPE: I just wasn’t sure if you were aware that, in 2002, Vice Chairman Baxter took his own life with a .45 caliber pistol?

KL: I am aware, the state of Texas is aware, and now everyone on the internet is aware. I thank you for bringing this to our attention. Move on.

PPE: Ken, at the time of this meeting you gave CEO Skilling an order, is that right?

KL: I told Skilling to tell his men that the books should not be touched.

PPE: And did you give that order to Vice Chairman Baxter as well?

KL: I ordered Baxter to send the books off to the SEC immediately.

PPE: Why?

KL: I felt the accurate accounting in the books might be in danger if word got out.

PPE: Grave danger?

KL: Is there any other kind?

PPE: We have the SEC order you and Baxter co-signed, ordering that the books be picked up through FedEx by 5:00 that evening. Was that the first FedEx pick up from Enron headquarters that day?

KL: The 5:00pm pick up was the first from Enron headquarters that day.

PPE: Ken, you flew up to Columbus early this morning, is that right?

KL: Yes.

PPE: And you brought your briefcase with you?

KL: Yes.

PPE: And a file folder, notes from your attorney, notarized statements?

KL: I brought a briefcase and some personal items.

PPE: I’m wondering why the accounting books weren’t certified. I’ll tell you what, we’ll get back to that one in a minute. This is a record of all the emails from your office in the last 24 hours. After being called to Columbus for this interview, you wrote three emails. I highlighted those emails in yellow. Do you recognize those addresses?

KL: I wrote Les Wexner to let him know I was in town. The second email was to Bob Ney of the House of Representatives to set up a meeting. The third was to my niece Ivana and nephew Vito.

PPE: These are the emails from your office for March 8th. And these here are the 140 emails in 9 months from the Accounting Department requesting, in fact, begging for the books to be sent to the SEC as is. Upon finally hearing about the transfer to the SEC, the Accounting Department was so excited, that do you know how many emails were sent on the topic? Zero. Not one email to a colleague expressing relief. Everything they reported for the current quarter was still stacked neatly on their desks. You’re leaving for one interview and you write three emails. The Accounting Department was finishing a major project and they didn’t pack away a thing? Can you explain that Ken? The fact is, there was no order to transfer books to the SEC. Those financial statements weren’t going anywhere, isn’t that right Ken?

KL: Ha!

PPE: Is that funny Ken?

KL: No. It’s tragic.

PPE: Do you have an answer?

KL: Absolutely. My answer is I don’t have the first damn clue. Maybe our accountants were early morning filers and liked to file before lunch. And maybe their email server was down. I’m an educated man, but I’m sorry I cannot speak intelligently about the filing habits of our Accounting Department. What I do know is that the books were due to leave Enron Headquarters at 1700. Now are these really the questions I came here to answer. Please tell me you’ve got something more PurpleThink.com. The news blogosphere entrusted you with this interview of a lifetime. Please tell me they haven’t pinned their hopes on email records.

PPE: These are the FedEx manifests for both Enron Headquarters and the freight terminal. The Enron manifest lists no pick up at 3:00pm and the terminal manifest lists no check-in at 4:00pm.

KL: I don’t understand. You’re admitting evidence of a FedEx pick-up that never existed?

PPE: We believe it did Ken. We’ll get to that in a minute. A moment ago you said that you ordered Baxter to order his men not to touch the books.

KL: That’s right.

PPE: And Baxter was clear on what you wanted?

KL: Crystal.

PPE: Any chance Baxter ignored the order?

KL: Ignored the order?

PPE: Any chance he just forgot about it?

KL: No.

PPE: Any chance Baxter left your office and said, “The old man’s wrong.”

KL: No.

PPE: When Baxter spoke to the corporate leadership and asked them not to touch the books, any chance they just ignored him?

KL: Have you ever spent time in a boardroom son?

PPE: No sir.

KL: Ever served during a shareholder meeting?

PPE: No sir.

KL: Ever put your financial future in another man’s hands, ask him to put his future in yours?

PPE: No sir.

KL: We follow orders son. We follow orders or the stock tanks. It’s that simple. Are we clear?

PPE: Yes sir.

KL: Are we clear?

PPE: Crystal. Ken, I have one more question. If you gave an order that the books weren’t to be touched, and your orders are always followed, then why would they be in danger, why would it be necessary to quickly send them to the SEC?

KL: The books were ready to go. They were being transferred to the…

PPE: But that’s not what you said. You said you were transferring the books because they were in “danger.” I said “grave danger?” You said…

KL: I know what I said.

PPE: Then why the two orders.

KL: Sometime men take matters into their own hands.

PPE: No sir. You made it clear just a moment ago that your men never take matters into their own hands. They follow orders or the stock tanks. So the books shouldn’t have been in danger at all, should they have, Ken?

KL: You little bastard.

PPE: If Baxter told his men not to touch the books, then why did they have to be transferred? -- Baxter ordered-out the red ink didn’t he? Because that’s what you told Baxter to do. And when it went bad, you cut Fastow loose. You doctored the financial statements. I’ll ask you for the fourth time. You ordered…

KL: You want answers?

PPE: I think I’m entitled to them.

KL: You want answers?!

PPE: I want the truth!

KL: You can’t handle the truth! Son, we live in a world that has corporations. And those corporations have to be managed by men who have stock options. Who’s gonna do it? You? I had a greater responsibility than you could possibly fathom. You weep for those books and you curse Enron. You have that luxury. You have the luxury of not knowing what I know: That the manipulation of those books, while tragic, saved the stock market. And my existence, while grotesque and incomprehensible to you, saves us from low consumer confidence.

You don’t want the truth. Because deep down, in places you don’t talk about at parties, you want me in that boardroom, you need me there. We use words like mission, vision, and strategy… we use these words as the backbone to a life spent defending something. You see them as a punchline.

I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very economy that I provide, then questions the manner in which I provide it. I’d prefer you just said thank you and went on your way. Otherwise I suggest you pick up a ledger and man a terminal. Either way, I don’t give a damn what you think you’re entitled to.

PPE: Did you order-out the red ink?

KL: I did the job the shareholders sent me to do.

PPE: Did you order-out the red ink?

KL: You’re goddamn right I did!

PPE: Ooops. Looks like your defense just got harder.

KL: I’m gonna get convicted of a crime now? I’m… That’s what this is? I’m gonna tear your head off and piss in your dead skull. You’ve screwed with the wrong Chairman. You have no idea how to prop-up an economy. All you did was weaken a stock market today. That’s all you did, put retirements in danger. Sweet dreams, son.

PPE: I’m a blogger, and a damn good spokesman for the political centrists. And, you’re going to jail you sonofabitch.

 

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