credibility

Ken--
For what it's worth, here's a little perspective from some distance.

A billion dollars here, a billion there, it's adding up to serious numbers. But even worse is the loss of what was once, not long ago, a great stock of trust and credibility, both for Enron and Ken Lay personally. Sunday's NY Times front page of the Business Section story is about as bad as it gets, short of suspicions of personal dishonesty or criminal culpability. Suspicion or innuendo that maybe you didn't fully understand the deals must hurt as bad as any of the barbs. The old dumb-but-honest defense is not something you want to use in this case, anyway. And I doubt you could convince many people you didn't understand it.

The analogy of Clinton & Nixon in their darkest hours comes to mind. Nixon's "I am not a crook" speech or Clinton's "I did not have sex with that woman" did not fix their problems. When things get this bad the best (maybe only) way to re-coup is get really candid and lay all the cards on the table face up (with one important caveat about which more later.) Humility, contrition & candor are the antidotes for hubris, arrogance & deviousness, whether they were real or just perceived.

In whatever the right venue is, and I'm unsure on that, I'd like to see you tell the world:

This is what we did.
This is why we did it.
This is why we were confident it was wholly proper.
This is why it didn't come out as well as we had hoped.
This what we believe it might cost us when all is said & done.
And I will answer any questions you have on any of this because we have to
get it behind us and get on with running an ongoing business.

With the press on your case, and the SEC, and Enron's high Bush-related profile, and its critical position in the markets, and the tantalizing non-coincidence of Jeff's recent sudden departure -- this is a story that has legs. It's going to sell newspapers, fuel gossip and energize competitors until the fire's out and the smoke has dissipated. National TV coverage is a possibility even, but for anthrax and Osama-gate. For you to try to spoon-feed the pack on your heels will just make the story last longer and get juicer. Only a pre-emptive total disclosure can quench it even half as quickly as you'd hope for.

BUT THE CAVEAT. If anybody is exposed to personal criminal liability, then it ain't nearly so simple. In those circumstances, the best attorney you can get will have to counsel every move. And both the person and the corporation would need their own separate lawyers because interests can diverge very fast.

I don't think for a minute that this is a real issue. But I didn't think I'd see a $15 stock price either. The enormity of this quake has shaken even those who only wish you the best. Imagine how good it makes the hyenas feel.

As I said before, Lots of luck, Buddy. You need it worse that I ever thought you would. Kindest regards to Linda, too.

Ross