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Lay dies in Aspen

Janet Urquhart and Chad Abraham

Ken Lay, one of the nation’s most reviled men, died in one of the most peaceful settings imaginable.Lay, whose fraudulent mismanagement of Enron wreaked havoc on thousands of lives, was staying at the 37-acre ranch of I.V. Pabst, with Snowmass Creek rushing past and striking views of the surrounding peaks.Lay was pronounced dead at 3:11 a.m. Wednesday at Aspen Valley Hospital. An autopsy revealed Lay was suffering from heart disease.Meeting with the media on the property’s gravel driveway, Pabst staunchly defended Lay. She called the Enron founder “a wonderful man who did a lot of wonderful things for a lot of people.” And many in Aspen praised his philanthropy.But Lay, 64, was likely about to embark upon a decades-long prison term for doing just the opposite. More than 20,000 lost their jobs and millions in retirement savings when Enron imploded. The energy-trading giant dropped $60 billion of its market value en route to the largest bankruptcy and corporate fraud case in American history.That Lay was renting a home on the ranch belies the relative turmoil he’s lived in since the scandal. At the height of his wealth and fame he was far from just being a renter in the Aspen area. He owned four properties in Aspen and a nickname – “Kenny Boy” – from President George W. Bush. Documents at the Pitkin County assessor’s office show Lay and his family sold all their properties here for about $24 million. Still, even after selling the residences, the Lays often used the upper Roaring Fork Valley to disappear from the public’s bloodlust.A man standing next to Pabst on Wednesday said Lay liked the ranch “because he could get away.” He didn’t give his name. “We enjoyed his company as much as he enjoyed ours,” he said.”It’s a beautiful spot,” Pabst added. “I hope we get the privacy that we all need. We’ve had a sad loss.”Lay was often spotted in the Town Center Booksellers in Basalt buying the Wall Street Journal, the Financial Times and Investor’s Business Daily. He also frequented the Woody Creek Tavern.When Lay was indicted two years ago, Aspen Times columnist Michael Cleverly set up a gallon-sized donation jar at the tavern.”It’s kind of a tradition when the wealthy get in a jam in Woody Creek, we try to help them out,” Cleverly told The Associated Press with a chuckle.The bar eventually gave the “Ken Lay Defense Fund” jar – which contained cash and other items, including dog biscuits and a pacifier – to Lay and his wife. Cleverly said they accepted it good-naturedly.Although his conviction was highly publicized, Lay and his wife also received recognition locally for their philanthropic efforts.Lay was the anonymous funding source behind a research project in women’s biochemistry, according to Dr. Phyllis Bronson, a local neuro-biochemist involved in the study. He provided about $75,000 over a two-year period for the study of women’s mood and brain chemistry, she said.The clinical research took place in Aspen; the molecular research was done at the University of Denver.”I just think it’s really important that word get out about Ken’s philanthropic efforts here,” Bronson said.Lay was also a contributor to the Aspen Music Festival and School, and donated $440,000 in four years to the Aspen Center for Environmental Studies. But he failed to give the final $110,000 in the fifth year of his pledge.The Kenneth and Linda Lay Family Foundation had pledged a total of $550,000 to ACES to help build and furnish a field study center at Rock Bottom Ranch near El Jebel and establish an endowment fund for the facility.Pitkin County Assessor Tom Isaac said as far as he knows, Lay no longer owned anything in Aspen.”He had four properties and sold all of them,” Isaac said. “It is possible that he has something under a limited liability partnership,” but he said he had not heard of Lay buying anything.Records show that Lay and his wife sold the four properties in Aspen for a total of $23.88 million in 2002 and 2003, while they had paid a total of $17.57 million for them, starting in 1991.Since the collapse of Enron, Linda Lay in interviews said she and her husband were so financially strapped that they were forced to sell their local properties. Their biggest gain was for a 5,489-square-foot home at 165 Shady Lane – a real estate brochure called it a “cottage” – near the Aspen Art Museum, which they sold for $10 million in 2002.The Lays sold two of the properties for a loss and two for more than what they paid for them, according to public records.It was Lay’s connection to Enron’s meteoric rise and eventual collapse that put him in the global spotlight. Lay led Enron from a staid natural gas pipeline company formed by a merger in 1985 to an energy and trading conglomerate that reached No. 7 on the Fortune 500 in 2000 and claimed $101 billion in annual revenues.Lay and Enron CEO Jeff Skilling were convicted May 25 of defrauding investors and employees by repeatedly lying about Enron’s financial strength in the months before the company plummeted into bankruptcy protection in December 2001. Lay was also convicted in a separate non-jury trial of bank fraud and making false statements to banks, charges related to his personal finances.Enron collapsed after it was revealed the company’s accounting books were based on a web of fraudulent partnerships and schemes, not the profits that it reported to investors and the public.When Lay and Skilling went on trial Jan. 30 in U.S. District Court in Houston, it had been expected that Lay, who enjoyed great popularity throughout Houston as chairman of the energy company, might be able to charm the jury. But during his testimony, Lay ended up coming across as irritable and combative.He also sounded arrogant, defending his extravagant lifestyle – including a $200,000 yacht for his wife’s birthday party, despite $100 million in personal debt – and saying “it was difficult to turn off that lifestyle like a spigot.”Both he and Skilling maintained that there had been no wrongdoing at Enron, and that the company had been brought down by negative publicity that undermined investors’ confidence.His defense didn’t help his case with jurors.”I wanted very badly to believe what they were saying,” juror Wendy Vaughan said after the announcement of the verdicts. “There were places in the testimony I felt their character was questionable.”Skilling, reached by telephone at his home in Houston, told The Associated Press that he was aware of Lay’s death.”No, I don’t have any comment,” he said quietly.Prosecutors in Lay’s trial also declined to comment Wednesday, both on his unexpected death and what may become of the government’s effort to seek a $43.5 million judgment from Lay that they say he pocketed as part of the conspiracy. Lay’s death will not affect their case against Skilling.Both were scheduled to be sentenced Oct. 23. Lay faced decades in prison, as does Skilling. Lay was free on a $5 million bond and allowed to remain in Aspen and Houston.The British newspaper the Guardian reported rage among some callers to a Houston radio show over Lay’s ability to remain here.”Former employees yesterday suggested there was some irony in the venue of Lay’s death – a luxurious chalet in one of America’s most expensive resorts,” the article says.Lay family spokeswoman Kelly Kimberly told The Aspen Times: “The Lays have a very large family with whom they need to communicate, and out of respect for the family we will release further details at a later time.”Lay is survived by his wife, Linda, five children and 12 grandchildren.The Rocky Mountain News and The Associated Press contributed to this report.


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