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JULY 26, 2004
Ken Lay's Lame Excuse If Kenneth Lay didn't know, he should have. The same goes for WorldCom's Bernard J. Ebbers, Adelphia Communications' John Rigas, and HealthSouth's Richard M. Scrushy. All four chief executives are using ignorance as a legal defense in financial disasters that have cost employees, retirees, and shareholders deep suffering. But the cost is even higher for Corporate America. The very idea of CEOs hiding behind "plausible deniability" casts business in a terrible light. In a society that preaches individual responsibility, arguing that "I didn't know" undermines the moral authority of business culture. If CEOs aren't responsible for their companies, who is? Ken Lay can use any defense he wishes, but his claim of ignorance is hardly plausible. The Enron men accused by the government of committing widespread fraud -- former CEO Jeffrey K. Skilling, Chief Financial Officer Andrew S. Fastow, and chief accountant Richard Causey -- weren't distant underlings.They were Lay's closest lieutenants at the highest levels of the company. And what Skilling and Fastow did was part and parcel of Enron's business model. Without the fraud, Enron would not have been nearly as profitable. How could Lay not be held responsible for his people and what they did? Chief executives are usually reluctant to talk publicly about other CEOs' travails. But they should make an exception in the case of Ken Lay and other executives who plead ignorance in denying their corporate and public responsibilities. It is time to shame these people, and there is no better way than for their colleagues to condemn them.  Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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