ENRON CORP. WAS A VICTIM OF A "WITCH HUNT" THAT UNFAIRLY CRITICIZED THE GIANT ENERGY COMPANY'S BUSINESS AND DROVE IT TOWARD BANKRUPTCY, FORMER CHAIRMAN AND CHIEF EXECUTIVE KENNETH LAY TESTIFIED AT HIS CRIMINAL TRIAL ON TUESDAY ACCORDING TO REUTERS. IN HIS SECOND DAY ON THE WITNESS STAND, LAY TOLD THE JURY THAT IN OCTOBER 2001 THE WALL STREET JOURNAL HAD REPORTED THAT ENRON HAD ENGAGED IN DUBIOUS DEALS THROUGH PARTNERSHIPS OPERATED BY ENRON'S FORMER CHIEF FINANCIAL OFFICER ANDREW FASTOW. "WE THOUGHT IN FACT THE WALL STREET JOURNAL WAS ON A WITCH HUNT," LAY SAID UNDER QUESTIONING FROM HIS LAWYER GEORGE "MAC" SECREST. "WE DIDN'T HAVE ANY INFORMATION THAT ANDY FASTOW HAD DONE ANYTHING INAPPROPRIATE." LAY, 64, IS ON TRIAL WITH FORMER CEO JEFFREY SKILLING ON CHARGES THAT THEY HID FROM INVESTORS THE DECAYING FINANCIAL STATE OF A COMPANY THAT WAS ONCE THE SEVENTH LARGEST IN THE UNITED STATES. THE WALL STREET JOURNAL ARTICLES WERE THE FIRST TO SCRUTINIZE THE FASTOW PARTNERSHIPS, WHICH ENRON USED TO HIDE BILLIONS OF DOLLARS IN DEBT WHILE INFLATING ITS PROFITS. THOSE ARTICLES AND THE INTENSE MEDIA COVERAGE THAT FOLLOWED HELPED DRIVE THE COMPANY INTO ITS DECEMBER 2001 BANKRUPTCY, THEN THE LARGEST IN U.S. HISTORY. STILL, LAY SAID, THE COMPANY BELIEVED THAT FASTOW'S DEALS WERE LEGITIMATE AND THAT ANY PROBLEMS WITH THEM HAD BEEN SOLVED THROUGH AN ASSET WRITE-DOWN THAT QUARTER AND FASTOW'S BREAK WITH THE CONTROVERSIAL LJM PARTNERSHIP MONTHS BEFORE. --MORE 2124 Local Time 1824 GMT
