Look out, Linda!

Oh, the humanity!

Federal authorities are investigating whether former Enron Chairman Ken Lay's wife acted improperly when she had their family foundation sell large quantities of Enron stock just days before the company's bankruptcy.

Mike Ramsey, lawyer for Ken Lay, confirmed Tuesday night that the Enron Task Force is investigating Linda Lay's requests that the charitable foundation sell shares in order to use the money to pay charitable obligations.

"It is a low and dirty blow," Ramsey said of the investigation. "The government has a vivid imagination. They believe they were anointed by the Lord to do what they please."

Ramsey said the Lays have learned of the investigation "in circumstantial ways" and have not been confronted by federal authorities.

Tom has a good summary of the case against Linda Lay.

Ramsey said Ken Lay has repeatedly asked for a speedy trial and complained that prosecutors have not complied.

"It appears the reason they were not willing to go to trial early is they have no proof. Now they will try extortion," Ramsey said.

He said the government has not directly threatened the family with charges against Linda Lay.

In its case against Enron's former chief financial officer, Andrew Fastow, the government threatened to file charges against his wife, Lea, sometime before she was actually indicted.

The husband and wife wound up pleading guilty in a joint deal. Lea Fastow is serving a year in prison on a tax charge, and her husband faces a possible 10-year sentence on two charges but is cooperating with the government.

David Berg, a longtime Houston lawyer, said if Linda Lay did act on information she got from her husband and did so before the public knew it, prosecutors are right to look at it, no matter who benefited.

"But they should have been looking at this years ago. The timing of this makes me suspicious. Doing this now conveys a weakness in the government's case," Berg said. "You have to think about what happened to Lea Fastow."

He said he suspects prosecutors knew about this possibility some time ago and are using it now "when they are facing one of the strongest trial lawyers in the country," he said, referring to Ramsey.

He noted the prosecutors got what they wanted in the Fastow case, and that was Andrew Fastow's guilty plea and cooperation.

"Now they are looking to hammer Ken Lay. And the hammer is his wife," Berg said.

Even I have to admit that the timing is a bit convenient for the prosection. Getting Kenny Boy to cop a plea and roll on Skilling and Causey would be a coup for them, since the case against Lay is almost surely the weakest.

Elsewhere in Enronarama, Tom and Dwight take a look at the rather large bills being prepared in the Enron bankruptcy case. All I can say is "Yowza!"

Posted by Charles Kuffner on November 17, 2004 to Enronarama | TrackBack