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Thursday, July 06, 2006

The Death of Kenneth Lay

The death of Enron founder and former CEO Kenneth Lay sent a shockwave out across the country.  Larry Ribstein has the sound-bite of the occasion: ""[A]nybody who thinks that he deserved to spend the rest of his life in jail is either a fool, a politician or a journalist."  (And Dave Hoffman has this riposte: "I'm not running for office, and I don't think this blog counts as journalism, so I must be a fool.")  A few thoughts:

  • I don't think his death should be an occasion to relitigate the facts of the case.  More particularly, Lay is not a martyr for the cause of white-collar defendants.  The attorneys at the Department of Justice did not cause his death, and they undoubtedly did not want this sad end.
  • Lay's death is undeniably a tragedy.  He did not deserve to die for his crimes.  And he didn't deserve a life sentence.  But as his death shows, even a one-month sentence could have been a "life" sentence.  So I think there's some confusion here about what a "life" sentence would mean in this context.
  • Lay was not the true villian of the piece.  Andrew Fastow is the real villian here.  The fact that Lay was prosecuted in a heavily publicized trial and now has died will mean that he is the symbol of Enron and its crimes.  And that's a shame.  If Andrew Fastow ends up getting out of prison, re-emerging Milken style, and then dying a wealthy and contented man, karma will have taken a holiday.
  • I expect to see a number of conspiracy theories out there soon.  Two possibilities: (1) Lay killed himself, using a undetectable heart-attack drug, in order to spare his family from the consequences of his conviction.  (2) Lay faked his own death, and he is now living on a remote island with Elvis, JFK, and Jim Morrison.

Posted by Matt Bodie on July 6, 2006 at 09:43 AM in Corporate | Permalink


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When I first saw the headline and realized the context of his death (right before his sentencing and jail-time), my first thought was that it was a suicide. It makes sense and the reported story just seems so coincidental. But then again, who knows?

Posted by: Clint | Jul 6, 2006 7:01:46 PM

I think you missed the big conspiracy theory. The first thing someone suggested to me after hearing the news was that Lay was about to reveal, well, something and the Bush administration had him silenced. Provides a nice counterpart to the Vince Foster theories, I suppose.

Posted by: Ivan | Jul 6, 2006 4:48:53 PM

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