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Last Updated: Wednesday, 14 December 2005, 10:45 GMT
Enron boss blames finance chief
Kenneth Lay speaking at the event in Houston
Kenneth Lay gave an impassioned speech
Former Enron boss Kenneth Lay has said his finance officer Andrew Fastow was solely to blame for the giant fraud that brought down the company.

Speaking at a business luncheon in Houston a month before the start of his own trial, Mr Lay said he bitterly regretted trusting Mr Fastow.

Mr Lay, who protests his own innocence, said that "sadly, tragically" his trust in Mr Fastow was misplaced.

Enron collapsed in 2001 after it tried to hide multi-billion dollar debts.

'Wave of terror'

Mr Fastow himself pleaded guilty to conspiracy and fraud last year, and is expected to testify against Mr Lay, who faces seven such criminal charges.

Getting up and speaking at this point is treading in dangerous territory
Jacob Frenkel, former prosecutor

In an impassioned speech at the Houston Forum, Mr Lay also accused prosecutors of waging a "wave of terror", and said defence witnesses were too scared to come forward to give evidence on his behalf.

Mr Lay called for former employees to be brave and come to his defence.

"It will only take a few brave individuals who are willing to stand up and say it's time for the truth to come out," he said.

"In this trial, apparently unlike most criminal defense cases, defendants are trying to get the truth in and the prosecutors... are trying to keep it out."

Without Mr Fastow's actions, he said, the company would never have gone under.

Gagging order

The judge who will preside over the case, Sim Lake, has already said there were no examples of misconduct by prosecutors, and it is not yet know what will be the impact of Mr Lay's comments.

"This is the kind of speech that can really raise the ire of judges if it can in any way be perceived as an attempt to influence the jury pool," said commentator and former federal prosecutor Jacob Frenkel.

"Getting up and speaking at this point is treading in dangerous territory."

Judge Lake has previously considered issuing a gag order surrounding the case, and said earlier this month that he would continue to monitor public statements.

Enron emerged from US bankruptcy protection late last year, and is currently disposing of its remaining assets to pay back creditors.

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