Lay told the jurors that he never doubted Fastow till he came to know in 2001 that he had collected $45 million from his deals.
"Enron Corp trusted its finance chief and believed critical newspaper articles about his off-the-books partnerships were part of a witch hunt," he said.
Lay said the company's board considered that the entities created by Fastow did not conflict with Enron's interests, even as the Wall Street Journal published a series of articles about them. The government alleges Enron used Fastow's partnerships to hide losses and debts from investors and auditors before the company collapsed in 2001.
He said the disclosures, in a series of articles in The Wall Street Journal, undermined investor confidence in the
company, which he was convinced was in sound financial shape.
"We thought the Wall Street Journal was on a witch hunt against Fastow and maybe Enron," said Lay, on the witness stand for a second day in his federal fraud and conspiracy trial in Houston.
"At that time we still didn't have any knowledge Fastow had done anything inappropriate."
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