Fastow Testimony in Enron Trial Targets Lay

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Andrew S. Fastow, the government's star witness in the Enron Corp. trial, testified Wednesday on his meetings with former chairman Kenneth L. Lay, providing more details to buttress the prosecution's arguments that Lay and others knew the company was in trouble but continued to make positive public statements about its prospects. Fastow, Enron's former chief financial officer, came to the stand Tuesday in the trial of Lay and Jeffrey K. Skilling, who was the company's chief executive until August 2001.

He said then that by the time of Skilling's departure "the foundation was crumbling" for Enron but Lay continued to make positive public statements about the company's prospects. Just two days after Skilling left, Fastow met with Lay to discuss Enron's increasingly troubled finances, Fastow testified Wednesday. The men talked about Enron's international assets, 80 percent of which were performing below expectations.

Prosecutor John C. Hueston contrasted Fastow's bleak picture with statements Lay made to analysts, employees and investors in August and September 2001. In those months, Fastow said he and Lay discussed a $1.2 billion accounting error, problems with the company's high-speed Internet unit, and other troubles. "The day of reckoning was being forced upon us," Fastow testified.

Lay told reporters on Aug. 24, 2001: "There are no accounting issues, no trading issues, no reserve issues, no previously unknown problem issues. The company is probably in the strongest and best shape that it has ever been." Fastow told the prosecutor that he concluded those and other statements by Lay were "misleading."

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/08/AR2006030800357.html

[The_Casual_Observer]

1. "I don't know Mr Lay"

[napi21]

2. I LOVE IT!!!! FRY HIM!!!! n/t

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3. Fastow says Lay lied about Enron's problems

Ken Lay, a former chief executive of Enron Corp., repeatedly lied to investors about the company, portraying it as financially sound even as it spiraled toward bankruptcy in 2001, the company's former finance chief, Andrew Fastow, testified on Wednesday.

Fastow, the government's key witness against Enron's two former CEOs, said Lay knew the Houston-based energy trading firm was drowning in debt and piling up undisclosed losses, but assured a financial world made nervous by the sudden resignation of Jeffrey Skilling as CEO in August 2001 that all was well.

"It was what Mr. Lay was saying, what the company was saying. I was trying to keep up the deception as well," said Fastow in his second day of testimony in the fraud and conspiracy trial of Lay and Skilling. "It was a lie."

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-03-08T184626Z_01_B613621_RTRIDST_0_BUSINESSPRO-ENRON-TRIAL-DC.XML

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4. Anyone know how its going today?