HOUSTON – Just last week, Enron Corp. founder and convicted felon Kenneth Lay told his pastor he was at peace with his future, even if it included prison. Lay maintained that he was innocent of fraud and conspiracy in Enron's searing scandal that left thousands jobless and wiped out billions from investors.
The former corporate celebrity who ascended from near-poverty as a minister's son in Missouri to the pinnacle of America's business elite died Wednesday of what a county coroner said was heart disease while vacationing in Aspen, Colo. He was 64.
"I know he looked to be in good health. He looked like things were going well for him. He was in church last Sunday," said his pastor, Steve Wende of Houston's First United Methodist Church.
Lay faced spending the rest of his life in prison after his convictions May 25 that ended a blockbuster trial stemming from one of the biggest business debacles in U.S. history.
Wende said Lay told him last week that he was at peace with what he may face, and he bore no ill will toward jurors who convicted him.
"What he did feel like was that he had a future. He even brought up the subject of prison and said if he did go to prison, he felt like God could use him there," Wende said.
Scott Thompson, chief deputy coroner in Pitkin County, Colo., said Lay died of natural causes. Dr. Robert Kurtzman, Mesa County coroner in Grand Junction, Colo., said an autopsy showed Lay died of heart disease. He said there was evidence that Lay had also suffered a previous heart attack.
Lay was considered a visionary who had President Bush's ear during Enron's halcyon days, but his reputation and monumental wealth shattered with that of his company. He spent his last years optimistically insisting he was no criminal, even after he became a felon.
"I guess when you're facing the rest of your life in jail and in your heart you know you're an innocent man, I guess it's too much to bear," said close friend Willie Alexander of Lay's sudden death.
Lay had stayed out of the public eye since he and former Enron CEO Jeffrey Skilling were convicted May 25 of fraud and conspiracy for lying to employees and investors about Enron's financial health. Lay was convicted of six counts of fraud and conspiracy, while Skilling was convicted of 19 of 28 counts of fraud, conspiracy, insider trading and lying to auditors.
Lay also was convicted of bank fraud and lying to banks in a separate, non-jury trial related to his personal banking.
Lay was scheduled to be sentenced Oct. 23, along with Skilling, who also faces a long prison term. Lay's death will not affect the government's case against Skilling, who will appeal his convictions.
Skilling's lawyer, Daniel Petrocelli, described the ex-CEO as "devastated."
"Jeff and Ken worked closely over the years, and Jeff will miss him dearly," Petrocelli said.
Lay displayed no signs of ill health throughout the grueling four-month trial that started Jan. 30. He was consistently upbeat and smiling, holding hands with his wife, Linda, outside of court.
But The Denver Post reported Thursday a fellow diner said Lay looked run down while eating dinner at a restaurant Monday.
"I said to my husband ... 'He looks terrible,"' said Jennifer Alter of Basalt, who ate at an adjacent table at the Bella Mia Restaurant in El Jebel, west of Aspen. "I actually felt really sad. I just felt sorry for him."
Lay led Enron's transformation from a staid natural gas pipeline company formed by a 1985 merger to an energy and trading conglomerate that reached No. 7 on the Fortune 500 in 2000 and claimed $101 billion in annual revenues. He traveled in the highest business and political circles, lived an extravagant lifestyle and gave generously — as much as $6.1 million in 2001.
His status in Houston evaporated when Enron spiraled into bankruptcy protection in December 2001. The crash obliterated Enron's more than $60 billion in market value and thousands of jobs, and Lay was pushed out as chairman and CEO in January 2002.
The government launched a widespread fraud investigation that enveloped Enron's finance, trading, broadband and retail energy units. The probe amassed 16 guilty pleas from ex-executives, eight of whom testified against Skilling and Lay.
Lay and Skilling insisted no fraud occurred at Enron except from a few employees who skimmed money behind their backs, but jurors were unconvinced.
"I loved Enron very much. And I loved Enron's employees very much. I spent half my professional life running Enron. I think we built a great company. We changed energy markets around the world," Lay testified during the trial.
Prosecutors in Lay's trial declined comment Wednesday, both on his death and what may become of their effort to seek $43.5 million they say Lay collected as part of the conspiracy. The government is seeking $139.3 million from Skilling.
The Pitkin County Sheriff's Department said officers were called to Lay's house in Old Snowmass, Colo., shortly after 1 a.m. MDT (3 a.m. EDT). He was taken to Aspen Valley Hospital, where he died at 3:11 a.m. (5:11 a.m. EDT).
Lay spokeswoman Kelly Kimberly said in a statement that Lay and his wife, Linda, arrived in Snowmass on Monday.
"Mrs. Lay and their five children are grieving the sudden loss of their husband and father and appreciate the many kind words of support and sympathy," Kimberly said. She said a memorial service will be held at First United Methodist Church, but no date has been set.
Before the scandal, Enron was the single largest contributor to President Bush, who nicknamed Lay "Kenny Boy." Lay said he was closer to the president's father, former President George H.W. Bush.
"It was sad to hear the news of the death of someone I considered a friend," the elder Bush said in a statement Wednesday.
During the trial Lay had been expected to charm jurors, but instead came across as irritable and combative.
Lay defended his personal spending, including a $200,000 yacht for Linda Lay's birthday party in early 2001, despite $100 million in personal debt. He told jurors it was "difficult to turn off that lifestyle like a spigot."
Lay also defended how he borrowed more than $70 million from Enron in 2001 — even as the company was spiraling — and repaid most of those loans with company stock.
"I wanted very badly to believe what they were saying," juror Wendy Vaughan said after the verdicts were announced. "There were places in the testimony I felt their character was questionable."
Lay was born in Tyrone, Mo., and spent his childhood helping his family make ends meet. His father ran a general store and sold stoves until he became a minister, and Lay delivered newspapers and mowed lawns. He attended the University of Missouri, found his calling in economics, and went to work at Exxon Mobil Corp.'s (XOM) predecessor, Humble Oil & Refining.
He joined the Navy, served his time at the Pentagon, and then served as undersecretary for 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, Neb., to form Enron, and Lay became chairman and CEO of the combined company the next year.
Lay is survived by his wife, five children and stepchildren and 12 grandchildren.