Quiet marked Lay's last days

Former Enron chief dies of heart ailment while in Aspen area

James Paton, Rocky Mountain News

Published July 6, 2006 at midnight

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ASPEN - Ken Lay spent his final days in a modest home tucked away in Old Snowmass, mostly keeping to himself and driving even farther from this star-laden city to the small town of Basalt to buy newspapers.

The Enron founder, convicted of one of the most sprawling business frauds in U.S. history, died from severe coronary artery disease early Wednesday. He was 64.

The Pitkin County Sheriff's Department said officers were called to the ranch, 20 miles from Aspen, shortly after 1:41 a.m. He was taken to Aspen Valley Hospital, where he was pronounced dead at 3:11 a.m.

Family spokeswoman Kelly L. Kimberly issued a statement saying, "Ken Lay passed away early this morning in Aspen. The Lays have a very large family with whom they need to communicate. And out of respect for the family, we will release further details at a later time."

Lay was convicted May 25, along with former Enron CEO Jeffrey 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 nonjury trial of bank fraud and making false statements to banks, charges related to his personal finances.

Lay faced what would likely have been a prison term lasting decades.

As part of Lay's $5 million bond conditions, he was required to stay in the Southern District of Texas, in Colorado or en route between the two until his sentencing in October.

He traveled to Old Snowmass with his wife Linda shortly after he was convicted. Lay was sighted on a United Airlines flight and was staying at the Pabst Ranch along the rustic Snowmass Creek Road.

If Lay was seeking solitude, he couldn't have picked a better spot. The winding street with 25 mph speed limit signs leads drivers past horses, seemingly endless grassy fields and a place called the Lazy O Ranch.

I.V. Pabst owns the 32-acre site where Lay spent his last moments. The great-granddaughter of Frederick Pabst, the founder the Pabst Brewing Co., was found on Wednesday standing in the dirt driveway of her property, accompanied by sheriff's deputies blocking the entrance.

"Ken was a wonderful, wonderful man," she told the Rocky Mountain News in a brief interview, declining to say more about her relationship with Lay. "This planet has lost a treasure. This is a very big loss. I want the media to give the family the privacy they deserve."

The home where Lay was staying was modest. It includes a 2,038- square-foot farmhouse with a 925- square-foot wood deck, Pitkin County property records show. The home has four bedrooms and 2 1/2 baths, according to the documents. Part of the ranch is next to property owned by the late John Denver.

Lay's body was taken to Community Hospital in Grand Junction.

Lay apparently avoided Aspen, instead ducking into a bookstore in Basalt, down the valley from Aspen, to buy his newspapers on weekends.

"He was a generally nice guy, but he didn't spend much time here," said Hector Lopez, assistant manager at Town Center Booksellers in Basalt, a town about halfway between Aspen and Glenwood Springs.

Lopez couldn't recall seeing Lay in recent weeks but said he typically picked up copies of The New York Times and financial publications such as Investor's Business Daily and Wall Street Journal.

Lay kept a low profile, though he did emerge from time to time. The former Enron bigwig was an occasional patron at the Woody Creek Tavern, a local meeting spot often associated with writer Hunter S. Thompson. Employees and regulars remember him as an affable guest who liked to come in for a glass of chardonnay.

Jim Ibbotson, who has lived nearby on Woody Creek Road for about 20 years and frequents the bar, recalls seeing Lay several times in a corner booth, ignoring the crowd. And the crowd, accustomed to seeing prominent people, left him alone.

"We despise what he did to those poor retirees who put their faith in him," said Ibbotson, who relaxed at the bar known for its colorful customers in a tie-dye T-shirt and shorts.

Ibbotson's buddy, who would only give his first name, Don, said they learned of Lay's death quickly. "He didn't post bail," he said. "I guess he just bailed."

At the same time, the two talkative patrons said they welcomed Lay in the hangout and probably would have grown to like him.

Skilling, reached by telephone at his home in Houston, told The Associated Press that he was aware of Lay's death.

"No, I don't have any comment," he said quietly.

Prosecutors in Lay's trial also declined comment Wednesday, both on his unexpected death and what may become of the government's effort to seek a $43.5 million judgment from Lay that they say he pocketed as part of the conspiracy.

Lay's death will not affect the case against Skilling.

A check with the Pitkin County assessor's office shows Lay and his family had sold all their properties in the Aspen community for about $24 million. Assessor Tom Isaac said as far as he knows, Lay no longer owns anything in Aspen.

"He had four properties and sold all of them," Isaac said recently. "It is possible that he has something under a limited liability partnership," but he said he had not heard of Lay buying anything.

Records show that Lay and his wife sold four properties in Aspen for a total of $23.879 million in 2002 and 2003, while they had paid a total of $17.57 million for them, starting in 1991.

Lay led Enron's meteoric rise 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. Lay traveled in the highest business and political circles.

For many years, his corporation was the single biggest contributor to President Bush, who nicknamed him Kenny Boy. 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.

Both Lay 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.

Lay, who described himself as naturally optimistic, displayed no signs of ill health throughout the grueling four-month trial that started Jan. 30. His lead lawyer, Michael Ramsey, was sidelined for several weeks during the trial because of heart problems.

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. Lay delivered newspapers and mowed lawns to pitch in. He attended the University of Missouri, found his calling in economics, and went to work at Exxon Mobil Corp. predecessor Humble Oil & Refining upon graduation. He served in the Navy and as an undersecretary in the Department of the Interior.

Staff writers Joanne Kelley and John Rebchook, dispatches from The Aspen Times and news wire services contributed to this report.

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