Enron founder Ken Lay died today, apparently of a heart attack at age 64. Despite the massive scandals and fall from grace of Enron, I still have a great deal of respect for what Ken Lay and the company he built accomplished over the past 20 years.
On the good:
- Built a $100 Billion/year business, to become one of the top 10 largest companies in America. One of the few meteoric rises in a traditionally slow moving energy industry in the last half century.
- Driving force behind electric utility deregulation in the US.
- Made a staid little gas pipeline company a global household name.
- Helped introduce whole new industries in from things like trading broadband to independent electricity retailing, and spawn whole new financial products – and if not created, at least drove the concept of convergence of telecom, gas, and electric utilities, into the market.
- Introduced a freewheeling, dealmaking culture into an industry that often struggles to get out of its own way. At one time, virtually EVERY utility in the country, if not the world, was advocating a “be like Enron or get squashed” strategy.
On the bad:
- Presided over the fall of said company, now the largest bankruptcy in history, reputation tarnished with scandal after scandal – and today viewed as at best a house of cards, at worst an utter fraud.
- Presided over a range of alleged and proven securities frauds from insider trading, to accounting fraud, to stock manipulation.
- Fall of Enron, coupled with significant difficulties in the bellwether California deregulation model, helped topple signficant advancements towards deregulation, and may have brought a complete stop to future US power market deregulation for years to come.
- Even at his trial, was unable to shake the fraud allegation that he was selling his own Enron stock while telling his employees and the market he was buying, and asking his employees to buy as well.
Love ’em or hate ’em, take the good with the bad, Ken Lay and Enron certainly made their mark. I’m not sure I could do better even with all the stars aligned in my favor. My condolences for the Lay family in their time of sorrow.