Texas jury sees through Enron's house of cards

In a testy exchange with a prosecutor during his trial, former Enron Chairman Ken Lay defended his extravagant ways -- even after Enron had collapsed and he was $100 million in debt -- by saying, "it was difficult to turn off that lifestyle like a spigot."
Lay had better find a way to turn it off now, because he appears to be headed to a federal penitentiary for a very long time. And even the most posh of the "country club" prisons will not support Lay in the manner to which he has become accustomed.
Jurors concluded that Lay and Jeffrey Skilling, Enron's former chief executive, repeatedly lied to cover up accounting tricks and business failures that led to the company's 2001 demise.
The collapse of Enron, which had grown from a small natural gas company to the seventh largest corporation in the nation in less than two decades, wiped out more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs.
The victims of Lay and Skilling's duplicity were myriad. They included investors and employees, many of whom were swept up in Enron's acquisitive net over a decade of extraordinary growth and essentially robbed of their value. Millions of consumers were victims of Enron's manipulation of energy markets.
Jurors were apparently not nearly as affected by Lay's sometimes surly attitude as they were by evidence that even as the Enron house of cards was collapsing, Lay and Skilling attempted to protect their own wealth by cashing out. Even as Lay was assuring employees that their pensions were safe in Enron's hands, he was selling his stock.
Time on their hands
Lay and Skilling have more time to get their houses in order than they gave their victims. Sentencing isn't scheduled until Sept. 11. Lay, 64, faces a maximum of 45 years on the counts the jury convicted him of, and another 120 years on bank fraud charges from a separate, nonjury trial. Skilling, 52, faces a maximum penalty of 185 years in prison.
Their sentences are not likely to approach the maximum, but they certainly should be substantial -- both as a matter of justice for the wrongs committed and as a warning to others. And while appeals are inevitable, we hope the judge is able to find that those appeals are unlikely to prevail, which will allow him to send Lay and Skilling to prison immediately after sentencing.
The Justice Department can take pride in sending more than a dozen of Enron's conspirators to jail. And U.S. Rep. Michael Oxley, and Ohio Republican and co-author of the Sarbanes-Oxley legislation that requires greater corporate openness, declared Thursday that the trial marks "the end of a dark era."
But that will only be true if lessons are learned from the Enron experience. Already, there are K Street lobbyists spending big bucks on efforts to gut Sarbanes-Oxley, claiming that it has made American business less competitive and is driving entrepreneurs to distant shores.
They should try singing that sad song to the former employees of any number of western utilities who thought their years of work and savings were secure when Enron devoured their companies, their jobs and their pensions.
There are lessons to be learned from Enron -- lessons that should be remembered for a long time.