Enron chief Lay goes missing

FORMER Enron chairman Kenneth Lay has vanished as government officials attempt to serve a writ that would force him to submit to tough questioning by Congress.

Earlier in the day, Lay cut all ties with the collapsed energy giant when he resigned from its board. He has refused to voluntarily answer questions to Congress, saying that he would not get a fair hearing. Several members of Congress have accused him and other top Enron executives of criminal activity.

Lay, 59, stepped down as chairman and chief executive of Enron at the end of last month. His resignation from the company's board of directors was accompanied by a statement in which he said he wanted 'to see Enron survive and successfully emerge from reorganisation'.

The personal nature of the probe into his role in Enron's collapse had 'become a distraction to achieving this goal', he added. His resignation still leaves him holding more than one million Enron shares, Although worth only a fraction of their peak of more than $80 (£57) each last November, they still have a market value close to $1m (£700,000).

Finding Lay could take some time. He is known to own well over a dozen homes in America, although he claims huge debts have forced him to put many of them on the market. They include four houses worth more than $6m (£4m) each in the exclusive ski resort of Aspen and up to nine properties in Enron's home town of Houston, Texas. Bankruptcy laws in Texas mean that Lay and his wife cannot be forced to sell their main home, a luxurious flat in Houston said to be worth at least $7m (£5m). In addition, the couple are reported to own shares in other companies worth around $11m (£7m).

Enron's collapse has cost investors £40bn and left thousands of the company's employees with pension schemes that are almost worthless. Senior employees are accused of inflating Enron's share price by covering up massive losses. At the same time executives were cashing in shares worth millions of dollars.

Further evidence of wrongdoing came on Monday from a former senior accountant of the Enron Corporation who alleged that large sums of money were taken from employee benefits by executives of the firm, which if true would convert the Enron debacle into a criminal case.

Robin Hosea, a senior benefits accountant at Enron during 2000, told a CBS interviewer she noticed that employee benefits money was being spent by other departments in the firm, with the approval of the benefits department.

'A large amount of money was involved, and also a large number of items,' Hosea said. The unexplained payments she discovered were put in a category Enron called 'total postings without functional area'. In total, about $15m(£10m) was taken in this way by the end of 2000. Hosea tried to find out where all the benefit money was going. There were recurring monthly payments she considered suspicious to outside consultants.

When, last May, she asked her superiors about these anomalous transfers, she said she was told they were 'payments to friends of executives, and to just leave it'. She was so upset, she said, her husband called the chief executive of Enron, Lay, whom he knew from business dealings, to complain that his wife's warnings were being ignored.

'Mr Lay said it was none of our business,' Hosea said. She decided to take a disability pension for knee surgery. Six months later, days before Enron went bankrupt, she contacted government officials about her concerns. At the very moment when she was meeting investigators from the Department of Labour at her house, she told CBS, an Enron supervisor called her on the telephone and told her there were 'orders from high up' to keep quiet.

'They knew people from the Department of Labour were at my house,' said Hosea. 'I don't know why specifically, but I would assume that it was because I was probably being followed and watched.' She is receiving 'regular telephone threats' she said. 'It's Robin's daily warning.'

Former Conservative minister Lord Wakeham, a member of Enron's audit committee, could also be struck off as a chartered accountant following a British investigation into his role in the collapse. An American trade union, the AFL-CIO, will lodge a formal complaint today with the Institute of Chartered Accountants, of which Lord Wakeham is a member. The complaint is on behalf of the union's members who have lost more than $10bn (£7m) in pensions and benefits.

The nine-page complaint says his membership of the audit committee was inconsistent with a $6,000 (£4,000) a month consultancy fee he was being paid by Enron Europe.