I have a warm and loving and Christian family….
When you hear those words from a guy standing before a bank of microphones and news cameras, with his attorney beside him and his faithful second wife in the background, you know whoever he is and whatever he just got convicted of, he's going to be slinging it pretty good.
And Ken Lay did not disappoint.
In fact, moments before telling the world of his Christian family, which is, presumably, better than a Catholic family or a Muslim family, this same man and his Christian family and Christian friends had gathered in the courtroom in prayer with a Christian minister who compared the just-convicted ex-CEO's plight to that of Jesus Christ.
I'm not making that up. The only thing missing from the whole tableau was Tammy Faye Baker dabbing those big raccoon-shadowed eyes of hers for the cameras and declaring her eternal affinity for the good Christian Ken.
I do not mean disrespect to the Christian faith itself, nor do I suggest anyone dismiss Lay's faith-based self-justification out of hand. It provides, I think, as great an insight into his psyche as any phone call recording or board meeting transcript that might have been used as evidence in the trial itself.
Most of all we believe that God in fact is in control, and indeed He does work all things for good for those who love the Lord.
Now, keep in mind, the man saying this is the man who built Enron out of a small
Strictly speaking, of course, if God “in fact is in control” and the Lord does work “all things for good,” then:
1. No human being was responsible for the off-balance sheet partnerships that brought down Enron, since God was in control;
2. No human being needs to answer to former Enron shareholders whose hard-earned savings evaporated along with that company’s earnings, assets and stock price, since the Lord works all things for good and therefore He presumably encouraged those former Enron shareholders to get in on the Google IPO to recoup their Enron losses.
Of course, God was never “in control” at Enron: human beings were in control.
That the chief human being in control didn’t take responsibility Thursday afternoon is no surprise to this observer. I recall very clearly the October 23, 2001 emergency conference call which he and Andy Fastow (!) hosted, following poor third quarter earnings and a surprise $1.2 billion write-off that had spooked Wall Street’s Finest.
On that call, Lay gave few hard answers to the increasingly desperate questions about what exactly the company was writing off, and expressed nothing but optimism and a weird complacency about the company—possibly because he had been selling stock all along, unlike the poor slobs asking the questions and the clients of those poor slobs, who were watching their retirement funds evaporate with every new disclosure.
In fact, the only disappointment Lay appeared to express on that call was in the company’s stock price—possibly because, as it turned out, the entire operation hinged on shares of Enron that had, unbeknownst to the public, been pledged as collateral for off-balance assets used to prop up earnings and cash flow.
But don’t take my memory for it.
The following is an abbreviated recap of Ken Lay’s opening remarks on that call, provided in summary form by the indispensable Briefing.com. Although the original quotes are gone, readers will get the sense of Lay’s deep denial and shoot-the-messenger self-rationalization that pre-dated this week's comments to the press:
--Company is extremely disappointed with its stock price.
--LJM is no longer is a related party. Terminated the financial arrangement with LJM.
--Welcomes the request of the SEC for information related to certain party transactions. Co-operating fully with the SEC. [Author's note: Patrick Byrne is apparently not, in fact, the first CEO in history to welcome an SEC inquiry]
--Structured finance vehicle in which LJM was investor was established to mitigate volatility associated with certain Enron merchant investments.
--Company recorded a $1.2 billion reduction in shareholders equity and a corresponding reduction in notes receivables.
Five years later, after the guilty verdict and the prayer circle in the court room, Ken Lay would tell the world that God is in control and things would work out for him because, as quoted above, "God works all things for the good for those who love the Lord," which was followed by the clincher:
"And we love our Lord."
Personally, I believe that whatever brand you choose, religion has more to do with, to paraphrase Spike Lee, “doing the right thing”—of which the Enron jurors apparently had a hard time finding examples among the former management team—and less to do with justifying one's self before the public by claiming a special relationship with Jesus Christ.
But the damage is done: yet another former high-flying hotshot gives Christianity a bad name.
I Am Not Making This Up
© 2006 Jeff Matthews
The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.