Lay admits reneging on bank deals

HOUSTON – Kenneth Lay gave an encore performance on the witness stand Monday, this time playing to an audience of just one, and took a stark new turn – admitting he did not comply with rules spelled out in bank documents that bore his signature.

The Enron Corp. founder testified in his own defense at a nonjury trial on charges he reneged on agreements with banks that loaned him money, but he insisted he meant no harm and said he regretted not paying more attention to his personal finance.

Asked by one of his defense lawyers whether he knew now that he had not fully complied with the rules of the loan documents, Lay addressed U.S. District Judge Sim Lake specifically.

“Very much so, Your Honor,” he said. “There’s no doubt that we did not fully comply with all the provisions of those documents.” He said he never would have made intentional false statements “if I’d known what all the facts were.”

Lay’s executive assistant, Rosalee Fleming, testified Lay spent far more time on Enron business than on his own finances. And Lay said he regretted he did not have more time to devote to his personal finance.

Lake will decide Lay’s fate on four charges – one count of bank fraud and three counts of making false statements – all tied to pledges that he would not use cash he borrowed privately from three banks to buy or carry margin stock.