Enron's plunging stock price disturbed the sleep of the company's former chief executive Jeffrey Skilling and was one reason he quit last August, ex-Chairman Kenneth Lay told an internal Enron inquiry.
"Skilling was taking Enron's stock decline personally and could not sleep at night," Lay said in comments summarized by the Enron inquiry panel in a memo released Tuesday.
When Skilling testified to a congressional committee this month, the former CEO said that when he left the energy trading firm in August, citing personal reasons, he thought it was financially sound.
"I did not believe the company was in any financial peril," Skilling told a House Energy and Commerce oversight subcommittee on Feb. 8.
By December, Enron had filed for bankruptcy, a record U.S. insolvency, amid questions about dealings with special partnerships that its own investigators have found were used to hide debt and inflate profits by nearly $1 billion.
The investigators conducting the internal Enron inquiry, headed by University of Texas law school dean William Powers, interviewed Lay on Jan. 16 about the company's demise.
They summarized his comments in a memo that was obtained by the House Energy and Commerce Committee and released Tuesday.
While the memo does not contain direct quotes from Lay, it is the closest thing to a public accounting from Lay now available. Lay has declined media interviews and refused to answer questions from a Senate committee last week, citing his Fifth Amendment right against self-incrimination.
Skilling's attorney had no immediate comment on Lay's account.
The memo said that Lay was shocked last July when Skilling told him he wanted to resign as CEO.
"Skilling said he wanted to spend more time with his family. Skilling has teenagers that were approaching college age and there was a family-related issue," the memo said.
"Lay pushed him a little more on the reason for his decision and Skilling said that he was under a lot of pressure and felt that Enron's stock price was dropping and he could not do anything about it. Skilling was taking Enron's stock decline personally and could not sleep at night," the memo continued.
Lay said he asked Skilling to reconsider over the weekend, but the next Monday Skilling was still adamant that he wanted to quit, according to the memo. It said some members of the Enron board also tried to convince Skilling to stay.
Much of the rest of the memo recounted Lay's statements that he had not been aware of problems with off-the-books partnerships until the company was close to collapse.
Lay said, for example, that he did not even know former Enron Global Finance executive Michael Kopper -- who Powers says made at least $10 million through his involvement in the partnerships. Lay also said that as late as October 2001 he "had never heard of Chewco," one of the partnerships that dated back to 1997.
Powers, who led an examination of the company's controversial partnerships, told a Senate committee last week that the raw notes of the Lay interview were tossed out after being compiled in the memo.
He said this was the standard way of conducting internal investigations, but this did not please the committee's chairman, South Carolina Democrat Sen. Ernest Hollings, who exclaimed: "Good gosh, you shredded the notes."