Chasing the Wind

Ken Lay was arrested this morning. It’s about time, it’s been what, 2-1/2 years since Enron collapsed?

By the way, when you have millions and millions of dollars, you’re arrested by the most attractive of FBI agents. It’s a perk.

“We saw the stock a-rising and our hearts stood still.
Go Enron-ron-ron, go Enron-ron.
Everyone’s retirement accounts were filled
With Enron-ron-ron, with Enron-ron.
Yes, we loved you, Ken.
We were so happy then.
Everyone in California has to write a check
To Enron-ron-ron, to Enron-ron.

The accountants said that everything was A-OK
At Enron-ron-ron, at Enron-ron.
Now the moving vans are taking all the desks away
From Enron-ron-ron, from Enron-ron.
We lost almost everything.
Except for the management.
And when they try to find the evidence I think they’ll see
It’s all gone, gone, gone from Enron-ron-ron.
It’s all gone, gone, gone from Enron-ron-ron.
It’s all gone, gone, gone from Enron-ron-ron.

Here’s my prediction: Ken Lay goes free. I think there’s a lot of evidence that Andrew Fastow and Jeffrey Skilling were cooking the books, but Ken appears to have been very much hands-off. I think his defense is going to be, “I didn’t know, I left the running of the company to others.” Incompetence will get you fired as CEO, but I’m not sure they can send him to jail for it.

But more telling, Ken Lay will insist on a jury trial. Then they’ll take random people off the street with 8th grade educations (engineers and accountant will be excluded, of course). Then the prosecution will have to explain a) what off-balance sheet partnerships are, b) how they can be misused, c) why it’s illegal, d) why even though Fastow and Skilling’s name is all over the paperwork, Lay ought to be convicted. I don’t think the prosecution can pull it off; the jury will say, “We don’t really understand that off-partner sheet thingy was, but we didn’t see enough evidence that Lay knew about it.”

Update: The woman is FBI Special Agent Paula Schanzle.