Analysis
And then there was just Skilling . . .
By Jerry Mazza
Online Journal Associate Editor


Jul 7, 2006, 01:23

If Ken Lay�s sudden death Wednesday from a massive coronary at 64 shocks one, it also raises the queasy questions, was the heart attack really the culprit? Or was Kenneth Lay a man who knew too much, and was therefore too dangerous to live?

In fact, in the wake of his passing, comes another bizarre twist, that Lay�s death can void the guilty verdict against him, even spare his survivors financial ruin, and challenge the government to seize his remaining real estates and financial assets.

What�s more, the LA Times yesterday reported (Death Puts Lay Conviction in Doubt), "Beneath the surface, hard feelings continued to fester, as shown by the reaction of some callers to news radio KTRH-AM (740) in Houston scant hours after Lay�s death. More than one caller expressed doubts that Lay really was dead and wondered whether the reports of his demise weren�t part of an insurance scam.�

Additionally, Lay�s death echoes the equally shocking death of Enron�s vice chairman Clifford Baxter on January 25, 2002. Baxter was found by police inside his Mercedes at 2:23 a.m., near his home in the wealthy Sugar Land, Texas, suburb, dead supposedly from a self-inflicted gunshot wound to his head

Yet under Baxter�s EVIDENCE OF INJURY, page 3 of the coroner�s report notes "The defect is stellate and, when the wound edges are repositioned, measures 7.2 centimeters in the horizontal direction and 4.5 centimeters in the vertical direction." As apfn.org reports, �This suggests a wound inflicted by a starburst of rat shot pellets which were far enough from the muzzle of the weapon to have separated from one another by as much as 2.83 inches. Who would, or could, shoot themselves in the temple like this?�

This leaves at the very least a reasonable doubt that Baxter committed suicide. After all Baxter had helped disguise Enron�s losses to keep the stock price high and had personally sold 577,436 shares of Enron Stock for $35.2 million. It is likely there was a lot he could have said about a lot of things had he lived to face prosecution.

Lay, facing bankruptcy and sentencing most likely for 20 years, posed the same threat conceivably to those in high political places involved with the Enron debacle. In a separate, non-jury bank fraud trail regarding Lay�s personal banking, US District Judge Sim Lake found the Enron founder guilty of both bank fraud and false statements to banks. Judge Lake had held back his verdict in Lay�s bank fraud case until the Lay-Skilling jury presented its verdict.

Also, between these two tales of death, on January 14, 2004, Andrew Fastow, who designed the off-the-books deals that drowned Enron, in a deal with federal prosecutors, pleaded guilty to wire and securities fraud and his wife, Lea, to filing a false joint tax return in 2000. Fastow agreed, too, to help them build a case against the corner office executives, former chairman Ken Lay (affectionately called �Kenny Boy� by President Bush, now a mere acquaintance among many) and CEO Jeffrey Skilling, the heavy left standing.

In fact, 10 years in prison for Fastow might be the safest place to be, although one never knows.

And as Skilling awaits sentencing, no exoneration is apparent. At 52, he was also convicted of conspiracy to commit securities and wire fraud after three months of testimony from 54 witnesses, and six days of jury deliberation in the fraud/conspiracy trial. If I were him, I�d keep my back to the wall, hire a body guard and a wine taster, at least until sentencing.

The Larger Implications

As the Washington Post�s Mike Allen reported on August 26, 2003, in the GAO cited Corporate Shaping of Energy Plan (read Enron and others). �The General Accounting Office, the investigative arm of Congress, said in the report that Energy Secretary Spencer Abraham privately discussed the formulation of Bush's policy �with chief executive officers of petroleum, electricity, nuclear, coal, chemical and natural gas companies, among others.�

�An energy task force, led by Vice President Cheney, relied for outside advice primarily on �petroleum, coal, nuclear, natural gas, electricity industry representatives and lobbyists,� while seeking limited input from academic experts, environmentalists and policy groups, the GAO said.

�The task force was one of Bush's highest priorities after his inauguration and was launched on his 10th day in office. None of the group's meetings was open to the public, and participants told GAO investigators they �could not recollect whether official rosters or minutes were kept,� the report said . . .

�Among the previously disclosed meetings were private sessions for Kenneth L. Lay, then the chairman of Enron Corp., the Texas energy trading company that collapsed in the nation's largest accounting scandal. Lay was given a 30-minute meeting with Cheney and a conference with a top aide for the task force.�

What exactly went on, was promised, and decided remains unknown. �Of the 77 pages Cheney�s office provided the GAO, two-thirds contained no cost information and the remaining third included �miscellaneous information of little or no usefulness . . . �� And the VP�s office said that was it for information.

Something Bigger Ticking in the Silence?

As Ron Callari wrote in the Albion Monitor on February 22, 2002, �Could the Big Secret be that the highest levels of the Bush administration knew during the summer of 2001 that the largest bankruptcy in history was imminent? Or was it that Enron and the White House were working closely with the Taliban -- including Osama bin Laden -- up to weeks before the Sept. 11 attack? Was a deal in Afghanistan part of a desperate last-ditch 'end run' to bail out Enron? Here's a tip for congressional investigators and federal prosecutors: Start by looking at the India deal. Closely.

�Enron had a $3 billion investment in the Dabhol power plant, near Bombay on India's west coast. The project began in 1992, and the liquefied natural gas-powered plant was supposed to supply energy-hungry India with about one-fifth of its energy needs by 1997. It was one of Enron's largest development projects ever (and the single largest direct foreign investment in India's history). The company owned 65 percent of Dabhol; the other partners were Bechtel, General Electric and State Electricity Board.

�The fly in the ointment, however was that the Indian consumers could not afford the cost of the electricity that was to be produced. The World Bank had warned at the beginning that the energy produced by the plant would be too costly, and Enron proved them right. Power from the plant was 700 percent higher than electricity from other sources.� Sounds like California in 2000-01, when Enron used various trading schemes to drive up prices while squeezing supplies.

�Enron had promised India that the Dabhol power would be affordable once the next phase of the project was completed. But to cut expenses, Enron had to find cheap gas to fuel it. They started burning naphtha, with plans that they would retrofit the plant to gas once it was available.

�Originally, Enron was planning to get the liquefied natural gas (LNG) from Qatar, where Enron had a joint venture with the state-owned Qatar Gas and Pipeline Company. In fact, the Qatar project was one of the reasons why Enron selected India to set up Dabhol: it had to ensure that its Qatar gas did not remain unsold. In April 1999, however, the project was cancelled because of the global oil and gas glut. With Qatar gone, Enron was back to square one in trying to locate an inexpensive LNG supply source.� And so on and on, Enron.

What�s Up, Doc?

And, as the sun sets on Enron�s saga, its shell games, corrupt executives, its wheels and deals, its on and off book companies, the questions still remain, including what will happen with Lay gone. And many of the answers still rest in the White House, recipient of mucho Enron donation dineros, including GHW Bush as well as Junior. It will be interesting to see who goes down next of natural or unnatural causes. And what the coroners have to say about it all, if anything.

The real sadness, though, is not that several ruthless executives lost their assets and life-styles, and one his life, but that Enron�s bankruptcy cost thousands of workers their jobs and confirmed our worst suspicions about stock market corruption, and finally forced lawmakers to come up with the toughest regulations for corporate practices in years. Frankly, I see them as drops in the bucket of corruption, which includes not only that of corporations, but the government itself, partners in crime with the best of the corporatos, including the deadly military-industrial complex and their wars in Afghanistan and Iraq. Somehow all that cumulative blood and guts makes Skilling look like a small potato, albeit hanging in the wind on a string.