Kenneth Lay

Died July 5, 2006

UNTIL Kenneth Lee Lay, founder of the Enron Corporation, died yesterday of a heart attack, he was facing decades in prison, for helping perpetrate one of the most sprawling business frauds in US history.

He was due to be sentenced in October, which would have been the final humiliation for a man who had risen from a humble background to become head of one of the world's biggest companies - then tumbled spectacularly from grace.

Until 2001, Lay was so much part of the American establishment that President George W Bush had a pet name for him: "Kenny Boy".

He had led Enron's meteoric rise from a staid natural-gas pipeline company, formed by a 1985 merger, to a conglomerate that reached No 7 on the Fortune 500 in 2000 and claimed dollars-101bn (GBP55bn) in annual revenues. He travelled in the highest business and political circles.

For many years, his corporation was the Bush camp's single biggest contributor. He was also a major fund-raiser for the current President's father, George Bush Sr, during his own 1988 presidential campaign.

Lay was born in Tyrone, Missouri, and spent his childhood helping his family make ends meet. His father ran a general store and sold stoves until he became a Baptist minister. Lay delivered newspapers and mowed lawns to help supplement the family income. He attended the University of Missouri, where he earned two degrees in economics, and went to work at Exxon Mobil Corp's predecessor, Humble Oil & Refining, after graduation.

He joined the Navy, served his time at the Pentagon, and then served as undersecretary for energy in the Department of the Interior before he returned to business.

He became an executive at Florida Gas, then Transco Energy in Houston, and later became CEO of Houston Natural Gas. In 1985, HNG merged with InterNorth in Omaha, Nebraska, to form Enron, and Lay became chairman and CEO of the combined company the next year.

Lay built Enron into a high-profile, widely admired company, the seventh-largest publicly traded in the country. But Enron collapsed after it was revealed the company's finances were based on a web of fraudulent partnerships and schemes, not the profits that it reported to investors and the public.

It's effective bankruptcy cost 4000 employees their jobs and many of them their life savings. Investors also lost billions.

When Lay and former Enron CEO Jeffrey Skilling went on trial in the US District Court on January 30, 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 the purchase of a yacht for his wife Linda's birthday party, despite dollars-100m 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 defence didn't help his case with jurors. "I wanted very badly to believe what they were saying, " said one juror, Wendy Vaughan, after the verdicts were announced. "There were places in the testimony I felt their character was questionable."

The level of international infamy he achieved in the aftermath of Enron's collapse was such that few were surprised when actor Kevin Spacey revealed last month that Lay had been the model for his portrayal of icy megalomaniacal villain Lex Luthor in a forthcoming Superman film.

Lay was convicted on May 25, along with Skilling, 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 trial of bank fraud and making false statements related to his personal finances. At the time of his death, aged 64, the government was seeking to recover dollars-43.5m (GBP23.7m) that it said he pocketed as part of the conspiracy.