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...hard to imagine how the mounting evidence of trouble could have escaped Lay's attention by last summer. Vice chairman Clifford Baxter--who committed suicide late last month--resigned in May after voicing concerns about accounting practices to Lay's top deputy, Jeffrey Skilling. The whistle-blowing memo by Enron vice president Sherron Watkins was sent to Lay on Aug. 15. Another warning memo, from employee Margaret Ceconi, made its way to Lay soon after. Nonetheless, Lay in September was telling employees to buy more stock and bet on Enron's future...

Author: /time Magazine | Title: Ignorant & Poor? | 2/11/2002 | See Source »

...house of cards that will fall," as a Texas energy executive attending an industry conference in Vail, Colo., a year ago groused to a senior Enron v.p. His dinner companion's startling reply: "You're more right than you know." Even people who believe that Lay was not involved in the dubious dealings of Skilling, Fastow and chief accounting officer Richard Causey concede that Lay had laid the foundation by encouraging Enron's ruthless, winner-take-all culture. A band of cocky, inexperienced young M.B.A.s was left alone to do whatever it took to structure a deal, regardless...

Author: /time Magazine | Title: Ignorant & Poor? | 2/11/2002 | See Source »

...Lays' claim that they are nearly as bankrupt as Enron is not winning them much trust or sympathy in Houston--or in Washington. Ken Lay now holds close to 3 million essentially worthless Enron shares, but he got most of his money by selling Enron stock early, reaping more than $100 million over the past three years. During that same period, he received salary and cash bonuses of more than $17 million. Last year alone he unloaded $25.7 million in Enron stock between January and mid-July as the share price fell from $80 to less than...

Author: /time Magazine | Title: Ignorant & Poor? | 2/11/2002 | See Source »

...Lay isn't the only member of his family to make a name in Houston's business elite. Travel Agency in the Park, co-owned by his younger sister Sharon Lay, 56, took the No. 4 spot in the Houston Business Journal's 2001 ranking of woman-owned businesses. But Ken Lay didn't just set an example for his sister--his company sent lots of deals her way. From 1996 through 2000, Sharon Lay's company (renamed Alliance Worldwide in December) received $6.8 million in commissions from Enron travel, according to SEC documents. Enron commissions reportedly accounted for half...

Author: /time Magazine | Title: Family Business: Lay's Sister Had A Sweet Deal Too | 2/11/2002 | See Source »

While Enron's employees were in theory permitted to book their business travel elsewhere, Sharon Lay's was the agency of choice. Callers to Enron's corporate-travel department still reach a telephone extension at Alliance Worldwide. Enron managers strongly discouraged employees from going elsewhere, according to former Enron staff members. Says one: "You only did that once." A memo last June reminded Enron employees to use TAP because of its volume discounts. But in some cases, the agency quoted fares that were no better than published rates, and still charged Enron a $30-per-ticket fee, Enron insiders...

Author: /time Magazine | Title: Family Business: Lay's Sister Had A Sweet Deal Too | 2/11/2002 | See Source »

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