Death of Enron Founder Ken Lay

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.

2 replies
  1. Heather Rae
    Heather Rae says:

    Out of respect for Ken Lay and his family, I won't post today. I've known a number of wives of high-flying businessmen and have witnessed just how drastically their business decisions and lifestyles can impact personal matters — for good and for bad. I feel for Mr. Lay's wife and my prayers are with her. Certainly, this isn't what she signed up for on her wedding day.As for Ken Lay, the ripple effect of Enron's trading schemes were felt throughout the utility industry. Those of us working on deregulated oppportunities saw them, and our jobs, chopped. Mr. Lay's business decisions personally effected not only his wife and family, Enron employees and shareholders, but people Mr. Lay would never have met. One word (sorry) would have gone miles in reparation.

  2. Anonymous
    Anonymous says:

    Neil, are you kidding me? How can you laud the "accomplishments" of a company whose only ostensible purpose was the manipulation of financial reporting to exploit public investment. For the benefit of the entrepreneur reading your comments, please take some care in attributing innovation to the Enron story where it is due – streamlining information and transactions in physical commodity markets – and not misappropriate praise to a company whose "meteoric" rise could not have been realised within the bounds of reasonable corporate or individual behavior.

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