The ex-chairman was combative during his fifth day on the witness stand in his fraud and conspiracy trial, accusing a federal prosecutor of highlighting only negative information.
"I didn't have that luxury (of hindsight) when I was right in the middle of battle," Lay protested.
Prosecutor John Hueston, in his third day of cross-examination, sought to show that Lay ignored warnings of accounting impropriety and financial doom after resuming as chief executive upon the resignation of co-defendant Jeffrey Skilling from that role in mid-August 2001. Enron, once the seventh-largest company in the U.S., filed for bankruptcy protection in December.
Yet in November 2001, with Enron's stock and reputation already in the tank, Lay told employees he could "not have ever contemplated" what lay ahead for the company and its stockholders.
As he did last week, Lay bristled and bickered, claiming he had received positive information along with negative.
One warning came in October 2001 via an e-mail from Jim Schweiger, a longtime trader, three days after Lay announced a massive third-quarter loss and $1.2 billion write down in shareholder equity. The bulk of the losses had been triggered by the unwinding of financial structures, run by former Chief Financial Officer Andrew Fastow, that prosecution witnesses testified were used to hide faltering businesses and boost earnings.
"The fact that senior management and the (Enron) board of directors knew these transactions were being used to manipulate earnings and the stock price, and took advantage of that knowledge to sell their ENE stock options, in my opinion, is CRIMINAL," according to Schweiger's e-mail, which was displayed on a large screen, portions of it read aloud to jurors.
If Lay was going to "play the game of lying, cheating and stealing," he should have a "plausible story," the e-mail said.
Lay bristled when Hueston pressed him on why he didn't investigate Schweiger's allegations.
"I was getting information from all sides, Mr. Hueston," Lay said.
Schweiger's Oct. 19, 2001, e-mail also alluded to the millions of dollars Fastow had earned from the partnerships. Lay waited until the next week to assign two directors to ask the CFO about it after regulators had already launched an inquiry into it. Fastow was eventually fired over the amount he pocketed from the partnerships.
As early as September, The Wall Street Journal also asked how much money Fastow earned from the partnerships. Lay reiterated on Monday that he had refused to answer those questions at the behest of Enron public relations officials and did not himself ask Fastow about the earnings.
Lay sneered that it was easy for the prosecutor to second-guess his decisions.
"The corpse is on the gurney now, Mr. Hueston, and you're carving it up any way you want to carve it up," he said.
Lay and Skilling are accused of repeatedly lying to investors and employees about Enron's financial prowess when they allegedly knew accounting tricks that hid bad news and inflated profits.
"I'm sure Lay's team would tell jurors that their client would rather be believed than beloved when his testimony is through," says CBS News legal analyst Andrew Cohen. "And I also would imagine the prosecutors are going to portray Lay's stridency on the stand as the mark of someone who was too passionate about Enron not to have known about the fraud that went on there."