Copyright (c) 2004, 
Dow Jones & Company Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.Houston -- MOST CORPORATE CHIEFS charged with federal crimes let their lawyers do the talking. But yesterday, embattled former Enron Corp. chairman Kenneth Lay took the microphone at a news conference and immediately launched into a campaign railing against the charges and offering explanations behind them.
Just an hour after pleading not guilty to 11 criminal counts related to the fall of Enron, Mr. Lay stood before a podium at a crowded banquet room in a hotel here to tell the public that he took responsibility for Enron but that his failure to save the company "does not equate to a crime."
Mr. Lay, who spoke for a little more than an hour, went on to attack the government's motive for bringing the case, the misconceptions he said the government has in the fall of Enron, and he turned the focus to Enron's former Chief Financial Officer Andrew Fastow, who pleaded guilty in a cooperation deal with the government. "I did not know what he was doing. He did not share with me what he was doing," Mr. Lay said as he faced a sea of television cameras.
Mr. Lay's strategy is a bold one and fraught with risks. Few defense lawyers advise clients to speak publicly because doing so could jeopardize their case. But Mr. Lay's defense team, led by veteran Houston trial lawyer Michael Ramsey, appears to be launching a two- pronged attack intended to undercut the government's case against him and also re-build his besmirched image by reminding the public about his civic-mindedness.
"It's a huge roll of the dice," said Bruce Yannett, a defense lawyer in New York. "He's previewing his defense and giving the government cross-examination material, if he takes the stand."
But Mr. Lay and his team seem intent on exploiting a possible weakness in the government's case, which characterizes Mr. Lay as playing a less-sweeping role in the Enron conspiracy than some expected. Explaining the shift in strategy, Mr. Ramsey, said, "The [indictment] does not demonstrate any need to be fearful, so we're speaking out today." He called the indictment "light" and "a stretch." Mr. Ramsey said he hasn't encouraged a client to speak publicly in decades. He decided to do so now because he is convinced of Mr. Lay's innocence, as well as the weakness of the government's case.
The new, chatty strategy also marks a stark reversal from Mr. Lay's own earlier course. Just two years ago when he was called before Congress to answer questions, Mr. Lay famously took the Fifth Amendment as a guard against self-incrimination. Mr. Lay's sudden move to open up could also impact how former Enron executives Jeffrey Skilling and Richard Causey -- who are also charged in the same indictment as Mr. Lay -- approach their coming trials.
Mr. Lay's approach seems in part geared toward putting his case directly before the public -- and prospective jurors. "I think that undoubtedly he is concerned about his reputation and he is equally concerned" about the degree to which "the jury pool is spoken to only by the government," said John Carroll, a former federal prosecutor who is now a defense lawyer in New York. Mr. Lay's team began the public- relations campaign Wednesday when it circulated an "urgent" request asking people to speak out about his character. "In preparation for the worst, our children and family would greatly appreciate your support by signing the attached affidavit. Letting the judge know that Ken has been a good citizen and cares about his community is important," the cover sheet to a fax read.
Yesterday, Mr. Lay's lawyers filed a 16-page packet with the court connected to his bail. It included a list of 85 public and private persons, solicited by the Lay camp, who signed affidavits attesting to Mr. Lay's character, and his role in the Houston community, his family life and his charitable donations, and cited his membership with the YMCA; Bush-Cheney Transition Advisory Committee; National Association for the Advancement of Colored People; and his board positions at Eli Lilly & Co. and Compaq Computer Corp.
By flagging his connection to President Bush, both in court documents and his news conference, Mr. Lay also seemed to suggest that there are underlying political overtones to his case. That theme "needed to be developed before the election," Mr. Ramsey said. Mr. Lay said that being a strong supporter of Mr. Bush "certainly hasn't helped."
In addition, Mr. Lay's spokeswoman also this week released to a reporter a list of 18 people, including the chairmen of several large corporations, who are willing to go on the record saying positive things about Mr. Lay.
Not all public campaigns are successful. Martha Stewart embarked on a fierce public-relations effort following her indictment last June. She launched a Web site and gave two high profile television interviews, but avoided discussing specific charges. The strategy didn't help: A jury convicted Ms. Stewart on all counts in March, and her appeal for a new trial was denied yesterday.
But like Ms. Stewart, who is a polarizing figure, Mr. Lay evokes strong feelings from the public. Mr. Ramsey said recent polls showed that 87% of the people in the south Texas, the district where the trial would take place, have some opinion about Enron. Enron wiped out the retirement plans of thousands of former employees and citizens of the Houston area.
Yesterday's onslaught may be just the tip of the iceberg. Mr. Ramsey promised that he and Mr. Lay would answer more questions in the days ahead. "It's not my first rodeo," said Mr. Ramsey.
(See related articles: "The 'It Wasn't Me' Defense --- CEOs From Enron to Sotheby's Blame Scandals on Underlings; Too Busy for All the Details?" and "Dunning the Deposed Boss" -- WSJ July 9, 2004)
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