The Economist Saturday, June 3 The energetic messiah By bending all the rules of the energy business, Kenneth Lay has turned Ea~ron from a stodgy gas concern into a soaring new-economy company. Bus what has he learned along the way? year ago, the top brass from big .. chaiucttti~ticconIidenca. Mr Lay responds and gas companies gasheued London. new-economy company They beaunsionned a bss. gosstped a los and foreisbecamecool drsnktoomuchcofiee.DutwhenKennethLay .1 lit sum. the Enton sale is every bit as te. rose to speak there was pmn.dtop silence. As ~ titatltabltas it seems. And Mr Lay~s boast lass the chatratan of Enron sketched his vision ibr I year about growing his compatty ninefold how liberalization and deregulanon would * once again. met with gasps as the time. eel- transform the world~ enetgy markets, his a- ~.. tairaly seems less oudandlsh now, especially vals were butily scnbbkrag noses. Some nod- . - when he maintains that lntons strongest did dumbly. Oshess shouted out half.balsed ' growth Is stIll ahead of us'. ~s does nothing questions. Having e~spanded Enrons matlut -~ duidiewayo(MrLaysdominasiono!all capitalisanon ninefold over the past decade. hesurveys?lsinsun realyso flawless? asked one bose. could he ~ - 4 Hauls. hubuls ~Welidoisagainthiscornlngdecade.hesu- -; sponded coolly. Mouths feD agape. MrLay~uru~ewthesequesuosu Enron is blazing a trail foe its industry. so talk about the ~ Afrer his speech. Mr Lay commented wan - struwthaisy.asldnghimmadmisevessdw aide. with sante ssszpnse. that -~ ~ ii kessougher than psaflinh teeth. guys finally seessi togas iLYes.shempondedsmugly.theywue This isodd.ford ebltmdusbsas appaoach so innovation that is in. even using some of our languagerSpend long essot~ls mmmd top U wiesosuch anopponsutisdc Rita as Ensun is bound to peoducs Enron jteo emnd you feel you stein the midst some stat of a Nut Given all Isis successes, surely failures should be ass. Mr Lay, with his pasuisn far ptuudly displayed as ted badges of coarage?Aflez4uckiahl.lhe n..k~.",is theculrstw~s.l4isdiscblesaue issmaaaus.m ~ intelligent. aggressive group of yaun~sh pm&ssionals~? al of whom "ges is~The "Isis she meal maultet fmces inshelmtg.esaid enezgy business. gas pipelines. At she titn~ she market for gas and electricity was heavlyregulasedornmby~overnmettrmonopoIy almost winy- whezL Bus Mr Uywaseonvmnced that thingawould ehasigejohe lobbied haitI for deregulation, and positioned himself to capital. ise on the slightest aperture or loophole in the law. Thanks as Is take-no.pnsoners attitude, and its hIghly sophisticated approach so managing risks, the Run has come to dominate Ameska's siur- keis forwholesale gas and elecmeity~The tesul. ate bseathsalrlogu the firms sales have leaps float SsA billion a decade ago m$o.s blllionlasryear.wihmossofshatcomingftemuvduusgenea~vJsis trying to repeat the nick in Esszopeandjapan. Lay is now setting out to rernalse titian yet again. byforging intothedignaleeonomy.lnalhmyoflnldadves.hehas ptopelled litton usia trading wholasals power on the insenset. into web sales of elecisielty so retail ems switers. and even into Internet tradhugof bandwldth.Aawellassuplrsgfltsz.movw advantage, his Rusts aRm belap gape.. she pammets to such tisley venassas. b foray into retail electricity. Ibresasaple. Is with aoL and test, while Compaq mid Sun Mleiasiummns naheloisse tahiti the private it macaura to studs bandwidth. response from invessoss has hem astonishment. followed by posm. En. ions share pike has rocketed far hour than thomof otherenergycompanap(see chan~ Analysts continue so iwIs. Donaw Eassey of Menill Lynch thinks slurs Ba- ran is unl9uely positioned to be theGuut- etal Electric of the new economy" Wads I 4if yeauapuus nupuogwgieptiee.whiehmidsobIasitei~moes. Isaveonewondeslng Itheever lumailsuit such mistakes. A dueler palm as whenhebasked about I9~. iii II [ I I -. - - L~~*i ~i*~7 5g*4 ll~. power susloss. Hats off-but whet has Mr lay couldiok - sheds , toavoid the whiff of heL~the~~, Rum ~mfietsad i,v in euri.-t - -a O.wkin item - h~~W di t shoe host nowbe a so sitarist prom- naominthejsmk-bondboomoltheiWee. Mrlayspeaksglowktgiyoftheheydayof Dramlandofits star trader. MIchael Nil. keti, whom he courses as a friend: they endedupinjailfoepssshingshelawtoo ~ far,asrdsheanopnsDreeelcollapsadina hmofbadkbuandiplominy..~ul1nL, its anagance. mmii it hurdlv likely to nemesas,eveit so. LAY-SEC 000023343 CONFIDENTIAL TRBATMENT UNDER FOIA REQUESTED BY KENNETH LAY I GOVERNMENT EXHIBIT 24274 Cnm No. H 04-0025 DJIIIr.dup P.sre,ultu. 51 IN lUbtW ~ .1 NW-- tlNheFU - -