05 Jul 2006

Ken Lay, R.I.P.

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The Blogosphere was filled today with howls of savage satisfaction at the sudden death of Ken Lay.

How can I not respond?

My wife is persuaded of Lay’s villainy, having read two of the books produced by journalists in the aftermath of Enron’s demise.

I wouldn’t read those books, but I remember reading the attack story spread across the front page of the Wall Street Journal by members of its leftwing news side, and I remember being unpersuaded that pushing the edge of the accounting practices envelope was necessarily either illegitimate or criminal.

In America, when the hound pack of the Press chases a conspicuously wealthy defendant, the prosecutor/huntsman always wins. The readily-provoked envy of the masses invariably ensures a guilty verdict. And such was Ken Lay’s unhappy fate.

The honest WSJ editorial side was skeptical of the prosecution’s case as well:

There is no doubt that Mr. Lay is guilty of bad management. He admitted Thursday that his trust in Mr. Fastow was misplaced, and there must have been other missteps. But Mr. Fastow had plenty of help in covering his tracks, both within Enron and from its outside accountants. In a criminal trial, it is not enough to say that Mr. Lay should have known. No CEO can know all that is going on in a large corporation, and the fraud at Enron was so complex that it took prosecutors more than two years to unravel.

The government’s Exhibit A will presumably be a videotape of Mr. Lay’s now-famous pep talk to employees in August 2001, telling them Enron was still “doing extremely well” and encouraging them to hold on to their stock. Many followed his advice and ended up losing much of their life savings. That aroused an understandable anger with the CEO, who was paid salary and bonuses in the millions.

But Mr. Lay was also putting his money where his mouth was. During the long slide of Enron’s share price, he continued to keep the vast majority of his personal wealth in the stock and even bought more shares, selling only when forced by margin calls. This is not consistent with the theory that he knew the company’s true situation and was out to defraud shareholders.

Mr. Lay’s co-defendant, former CEO Jeffrey Skilling, claimed that he resigned from the company for personal reasons and allegedly made $89 million in profits from selling Enron stock. By all accounts Mr. Lay came back to the company to replace Mr. Skilling as CEO because of his personal connection to it. He then did what captains are supposed to do, which is go down with his ship.

I’m not sure I believe the heart attack story, but I see no reason to inquire. The young boy from Tyrone, Missouri who delivered newspapers and mowed lawns made good, made a lot of money, lived the good life, and like many a good man was brought low. If he escaped prison and degradation by his own hand, good for him.

Perhaps Ken Lay behaved in extremis as the ancient Romans did, when Fate turned on them. Thinking of Ken Lay today, I remembered the end of Walter Pater’s Marius the Epicurian:

For there remained also, for the old earthy creature still within him, that great blessedness of physical slumber. To sleep, to lose one’s self in sleep–that, as he had always recognised, was a good thing. And it was after a space of deep sleep that he awoke amid the murmuring voices of the people who had kept and tended him so carefully through his sickness, now kneeling around his bed: and what he heard confirmed, in the then perfect clearness of his soul, the inevitable suggestion of his own bodily feelings. He had often dreamt he was condemned to die, that the hour, with wild thoughts of escape, was arrived; and waking, with the sun all around him, in complete liberty of life, had been full of gratitude for his place there, alive still, in the land of the living. He read surely, now, in the manner, the doings, of these people, some of whom were passing out through the doorway, where the heavy sunlight in very deed lay, that his last morning was come, and turned to think once more of the beloved. Often had he fancied of old that not to die on a dark or rainy day might itself have a little alleviating grace or favour about it. The people around his bed were praying fervently–Abi! Abi! Anima Christiana! [“Depart! Depart! Christian Soul!”] In the moments of his extreme helplessness their mystic bread had been placed, had descended like a snow-flake from the sky, between his lips. Gentle fingers had applied to hands and feet, to all those old passage-ways of the senses, through which the world had come and gone for him, now so dim and obstructed, a medicinable oil. It was the same people who, in the gray, austere evening of that day, took up his remains, and buried them secretly, with their accustomed prayers; but with joy also, holding his death, according to their generous view in this matter, to have been of the nature of martyrdom; and martyrdom, as the church had always said, a kind of sacrament with plenary grace.

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