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Kenneth Lay resigns as Enron chairman and CEO

Kenneth Lay resigned as chairman and CEO of fallen energy trading giant Enron Corp on Wednesday as lawmakers turned a critical eye on tax shelters and accounting practices that played a role in Enron's downfall.

As the public outcry over history's largest corporate bankruptcy began to crystallize in congressional hearings, a fired partner at Enron's former auditor, Andersen, refused to testify before Congress without immunity.

Lay, who will retire as an Enron employee, will remain on the company's board of directors. The board, along with the bankruptcy creditors committee, is now selecting a specialist to join Enron to steer the company out of bankruptcy while serving as an acting chief executive.

Lay said in a statement he reached the decision to resign in cooperation with the creditors' committee.

"I want to see Enron survive, and for that to happen we need someone at the helm who can focus 100 percent of his efforts on reorganizing the company and preserving value for our creditors and hard-working employees," Lay said.

The multiple criminal, congressional and US regulatory investigations into Enron's collapse are taking much of Lay's time, he said. "It is becoming increasingly difficult to concentrate fully on what is most important to Enron's stakeholders," he said.

Major Political Player

White House spokeswoman Jeanie Mamo said on Wednesday Lay's resignation "doesn't change the president's focus which is on the criminal investigation, which will continue. It's ongoing and on the policy reviews to protect peoples' pensions."

Lay has been the top executive at Enron since its creation from the merger of Houston Natural Gas and Internorth, two gas pipeline companies.

Bush said on Tuesday his Cabinet's response to Enron's pleas for help at the end of last year was: "No help here." The president said he spoke to O'Neill and Evans about their contacts with Enron, but did not say when that occurred. Enron, Bush's largest corporate campaign supporter, was a major political contributor to both parties.

Meanwhile, a lawyer for the fired Andersen partner wrote the House of Representatives Energy and Commerce Committee, saying it was premature to require his client, David Duncan, to testify at Thursday's hearings into the Enron debacle.

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