HOUSTON - Former Enron Corp. Chairman and Chief Executive Kenneth Lay surrendered to federal authorities on Thursday to face criminal charges related to his leadership of the disgraced energy powerhouse.

Lay, who has steadfastly denied all wrongdoing, appeared calm and relaxed as he entered FBI offices in Houston. In a statement on Wednesday after he was indicted, Lay said he had done nothing wrong and that the indictment was not justified.

KENNY BOY DOES THE PERP WALK Former Enron CEO Ken Lay is escorted in handcuffs by an FBI agent into the Federal Courthouse in Houston, Texas, July 8, 2004 after surrendering to authorities to face wire fraud and conspiracy charges in the demise of the former energy giant. REUTERS/Richard Carson

"You guys are up early," the 62-year-old Lay said as he strode past a pack of about 50 reporters and news cameras gathered in front of the FBI offices on Thursday. "Nice of you all to show up this morning."

Asked if he planned to comment on the charges, he replied, "I don't think this morning we'll make a statement."

His attorney, Mike Ramsey, said Lay would speak to reporters later in the day.

After about 20 minutes inside the FBI offices, where he was fingerprinted and processed, Lay emerged in handcuffs and was taken to a federal court house. He was scheduled to appear before a federal magistrate judge at 11:30 a.m. local time.

Houston-based Enron was the nation's seventh-largest publicly owned company by revenue before it spiraled into a then-record bankruptcy in the final months of 2001.

Disclosures that the company hid billions of dollars in debt and burnished its financial statements through the use of complicated, off-the-books transactions ultimately prompted its swift failure.

Lay, a leading U.S. industrialist and close friend of President Bush -- who called him "Kenny Boy" -- now faces felony charges stemming from the debacle.

As has been the pattern with most of the 21 other ex-Enron employees charged with crimes, the U.S. Securities and Exchange Commission is also expected to file civil charges against Lay.

Lay, as head of Houston Natural Gas, had executed a 1985 merger that formed the national pipelines giant that became Enron. He was Enron's chief executive for most of the company's history, ceding those duties to his hand-picked successor, Jeff Skilling, in February 2001 until Skilling abruptly quit in August 2001. Lay stepped back in as CEO until he was forced out in disgrace in January 2002.

As Enron steamed toward collapse, Lay's appeals for help to top Bush administration officials, including Commerce Secretary Donald Evans, were met with silence.

The charges come two-and-a-half years after the Justice Department's Enron Task Force began an investigation that has slowly climbed the corporate ladder.

Former Chief Financial Officer Andrew Fastow, who simultaneously managed the off-books partnerships that struck questionable deals with Enron, pleaded guilty in January in exchange for a 10-year prison term and agreed to cooperate with prosecutors.

Fastow helped prosecutors bring charges against Skilling, who, under Lay, was the architect of Enron's expansion into the trading of everything from natural gas and electricity to Internet network capacity.

Skilling and Enron's former chief accountant, Rick Causey, were charged together and have both pleaded not guilty to more than three dozen counts of insider trading, fraud and lying on Enron financial statements. Observers speculate Lay may face similar charges.

© 2004 Reuters Ltd

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