The founder and former chairman and chief executive of Enron, Mr Kenneth Lay, yesterday, insisting that he was "deeply troubled" to do so, pleaded the Fifth Amendment to a Congressional hearing "under instruction by my counsel". He became the fifth subpoenaed Enron executive to refuse to testify, writes Patrick Smyth, Washington Correspondent
Mr Lay read a short statement to the Senate Commerce Committee in which he spoke of his "profound sadness" at what had happened to the company, its employees and shareholders. He said he had "agonised" over the assertion of his Fifth Amendment rights as it would be seen by many as a sign he had something to hide.
Quoting from a Supreme Court judgment which asserted that a key role of the Fifth was to protect the innocent, Mr Lay appealed to the committee and the public not to infer his guilt.
Meanwhile, the Wall Street Journal has reported that Mr Lay's signature has been found on a deal-approval sheet from June 2000 relating to one of the key "external" partnerships under investigation, LJM2. The partnership, used to hide debt off the books, was run by the Enron chief financial officer, Mr Andrew Fastow, who in this case was buying access to Enron's nationwide fibre-optic network for nearly $91 million (€103.9 million).
Mr Lay's signature suggests he knew more about the operation of the controversial partnerships than he has previously acknowledged and would certainly have been the focus of questioning had yesterday's hearing got any further.
The former company president and chief executive, Mr Jeffrey Skilling, who gave evidence last Thursday to the House Energy and Commerce committee, was grilled unsuccessfully. It was a matter of repeated "memory lapses" on Mr Skilling's part over his failure to sign off such deal-approval forms and the conviction many committee members had that his reluctance to do so was related to his knowing exactly what the partnership schemes were doing and wanting to preserve "plausible deniability" over such knowledge.
Following Mr Skilling's testimony, key lawmakers made clear they did not believe his sworn testimony "that he knew few details of the partnerships".
Mr Billy Tauzin, the House committee chairman, even suggested that Mr Skilling could face formal accusations of perjury. And even his mother appears not to believe this line of defence. Ms Betty Skilling (77) told Newsweek before the hearing that "when you're the chief and you're on the board of directors, you're supposed to know what's going on with the rest of the company".
An internal Enron report by a special committee of directors found a "default of leadership and management" that began at the top, including Mr Lay and Mr Skilling. Dr William Powers, an Enron director and dean of the University of Texas Law School, who led the inquiry, told Congress last week that "virtually everyone from the board of directors down" understood Enron's use of its partnerships was to "offset its investment losses with its own stock."
