Before scandal, Lay was Houston's go-to guy

updated 3:42 p.m. ET March 3, 2006

HOUSTON - He once had President Bush’s ear and Houston in the palm of his hand.

Now Enron Corp. founder Kenneth Lay faces an uncertain future dependent on whether a dozen jurors and a federal judge deem him guilty of crimes that could send the 63-year-old to prison for the rest of his life.

“Of anything and everything that I could imagine might happen to me in my lifetime, the one thing I would have never even remotely speculated about was that someday I would become entangled in our country’s criminal justice system,” Lay recently told an audience of Houston business and academic leaders.

Lay isn’t friendless. But the clout he enjoyed as a top Houston mover and shaker with White House connections is long gone.

“He’s been bruised badly,” said the Rev. William Lawson, a longtime Lay friend. “You don’t often come back to the place where you once were when someone puts this kind of mud on you. I don’t think he’ll ever be the go-to guy he was.”

Lay goes to trial Jan. 30 on seven counts of fraud and conspiracy for allegedly lying to investors and Enron employees about the company’s health before the onetime energy giant flamed out in December 2001.

Alongside him will be former Enron CEO Jeffrey Skilling, who faces 35 counts of fraud, conspiracy, insider trading and lying to auditors for allegedly conspiring to fool Wall Street into believing in a facade of success.

When that jury begins deliberating, Lay will go on trial without a jury before U.S. District Judge Sim Lake on charges of bank fraud and lying to banks about his intention to use $75 million in loans to buy Enron stock on margin.

Both Lay and Skilling have pleaded not guilty to all charges.

The scandal forced Lay to resign from corporate boards, rein in philanthropy and be labeled a pariah by many in the city where politicians, charities and civic leaders once cultivated his friendship.

“Lay was the great hero of Houston. He was the kind of civic leader who led the business community to all kinds of major investment in the city that might not otherwise have happened,” said Stephen Klineberg, a sociologist at Rice University.

However, Klineberg said many feel betrayed by Lay.

“There’s this guy who was so sort of seemingly selfless, committed to improving the city and wanting to make Houston a better place, who was meanwhile doing things or things were happening under his watch that were clearly destructive to people,” the sociologist said.

Lay’s contributions to the nation’s fourth-largest city are numerous.

In 1990 he took charge of planning a World Economic Summit in Houston for his friend, then-President George H.W. Bush. A few years later he galvanized Houston’s business community to reject a referendum that would have rescinded city affirmative action programs.

A 1996 referendum to build Enron Field, $251 million home to the Houston Astros, now called Minute Maid Park, barely passed after Lay mobilized support from business and black communities.

“His prestige, the respect people had for him then was extremely important,” Houston Astros owner Drayton McLane said. “We wouldn’t have won it without his support.”

After Enron crashed, the Astros shed the company’s $100 million, 30-year naming rights deal and erased its name from the ballpark.

“It hurt personally because I had such admiration for Ken and Enron,” McLane said. “But that was the right thing to do at the time.”

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