DECLARATION OF CHARLES J. CLARK IN SUPPORT OF

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF COLUMBIA
__________________________________________   
)
UNITED STATES SECURITIES)
AND EXCHANGE COMMISSION)
)
Applicant,)MISC. NO. 03-1962
)
v.)
)
KENNETH L. LAY,)
)
Respondent.)
_________________________________________  )
DECLARATION OF CHARLES J. CLARK IN SUPPORT OF 
SEC’S APPLICATION FOR ORDER REQUIRING OBEDIENCE TO SUBPOENA
I, Charles J. Clark, pursuant to 28 U.S.C. § 1746, do hereby declare as follows: 
1.I am an attorney admitted to the Bar of the State of New York and the Bar of the
District of Columbia.  I am employed as an Assistant Director by the United States Securities and
Exchange Commission (“Commission”) in the Division of Enforcement, at the Commission’s
headquarters office in Washington, D.C.
2.This declaration is submitted in support of the Commission’s Application for an
Order, filed with this Court on September 29, 2003, requiring Kenneth L. Lay to comply with a
subpoena lawfully issued by the Commission, and is based on my direct participation in the
investigation captioned “In the Matter of Enron Corp.”
The Appointment Of The Bankruptcy Examiner
3.On December 2, 2001, Enron Corp. filed for Chapter 11 bankruptcy in the United
States Bankruptcy Court for the Southern District of New York.  On April 8, 2002, the Court

-2-
issued an Order pursuant to 11 U.S.C. §§ 1104(c) and 1106(b) ordering that an Examiner for
Enron be appointed.  See Order (Exhibit A).  According to this Order, the Enron Examiner was
authorized to “investigate all transactions . . . involving special purpose vehicles or entities
created or structured by [Enron] or at the behest of [Enron]” that meet certain criteria.  
4.On May 22, 2002, the United States Trustee for the Southern District of New
York named R. Neal Batson, an attorney with the law firm of Alston & Bird LLP based in
Atlanta, Georgia, to serve as the Enron Examiner.  To assist him in discharging his duties
pursuant to the Order, the Enron Examiner retained Alston & Bird as counsel to the Examiner. 
5.Since his appointment, it is my understanding that Mr. Batson, with the assistance
of Alston & Bird attorneys and others, has conducted an investigation pursuant to the Order and
has, on three prior occasions, submitted reports to the Bankruptcy Court describing the results of
that ongoing investigation.  It is also my understanding that his fourth and final report will be
submitted to the Bankruptcy Court in October 2003, and that this report will describe, among
other things, the role of Lay in the activities under investigation.    
Lay Submits To Questioning By The Examiner
6.On October 16, 2003, I received a telephone call from counsel for the Enron
Examiner.  At that time, and in subsequent telephone calls that day, he informed me that counsel
for Lay and counsel for the Enron Examiner had reached an agreement whereby Lay would be
made available for questioning by the Examiner for the purposes of his investigation.  He further
informed me that counsel for Lay and counsel for the Enron Examiner had entered into an
agreement whereby they specifically agreed to maintain the confidentiality of the circumstances

-3-
and substance of the meeting with Lay.  The meeting was to occur during the pendency of the
instant subpoena enforcement action.
7.Counsel for the Enron Examiner informed me, however, notwithstanding the
confidentiality agreement, he was authorized to provide the following, albeit limited,
information: (1) that Lay had agreed to meet with counsel for the Enron Examiner at 9:00 a.m. on
Saturday, October 18, 2003; (2) that Lay had agreed to answer questions relating to activities
under investigation by the Enron Examiner; (3) that this meeting would be in the form of an
interview (rather than transcribed testimony); (4) that the Enron Examiner was allowed to
describe and attribute the information provided by Lay in his forthcoming report; and (5) that a
number of attorneys representing Lay – including his “criminal counsel” – were aware of Lay’s
intention to meet with the Enron Examiner.  
8.Counsel for the Enron Examiner also stated that, beyond the information that
would be contained in the Examiner’s forthcoming final report, it was not anticipated that the
substance of the interview would be disclosed in the future.  Citing the agreement with counsel
for Lay in which they specifically agreed to maintain the confidentiality of the interview, counsel
for the Enron Examiner declined to answer any further questions, including who initiated the
meeting and whether this interview would be limited to particular subjects.  
9.At approximately 10:00 a.m. on October 22, 2003, I initiated a telephone call to
counsel for the Enron Examiner.  In response to a series of questions, he told me the following:
(1) Lay had met with counsel for the Enron Examiner on Saturday, October 18, 2003; (2) Lay had
answered questions as agreed; and (3) Lay had not asserted his Fifth Amendment rights during

-4-
the interview.  Again citing the agreement with counsel for Lay in which they specifically agreed
to maintain the confidentiality of the interview, counsel for the Enron Examiner declined to
answer any further questions regarding this interview.
10.At approximately 2:15 p.m. on October 22, 2003, counsel for the Enron Examiner
contacted me to clarify certain information he had provided previously.  He acknowledged that,
earlier in the day, he had stated that in essence while he did not think Lay had asserted his Fifth
Amendment rights during the interview, he had not discussed Lay’s interview with the attorneys
who conducted it and therefore did not know with certainty whether Lay asserted his Fifth
Amendment rights as to any particular question.  Moreover, pursuant to the confidentiality
agreement between counsel for Lay and counsel for the Enron Examiner, even if he did know
with certainty what happened during Lay’s interview, he stated that he was not permitted to
disclose this information.  His statements to me were confirmed in a message that was left on my
voice-mail shortly before the actual telephone conversation described in this paragraph.
Lay Produced The Documents At Issue To The Examiner, Apparently After This Action
Was Filed
11.I have read Lay’s Amended Response in this matter and understand that Lay has
now disclosed that he produced the documents withheld from the Commission to the Enron
Examiner.  Lay has not detailed the circumstances of this production, including the date on which
the withheld documents were produced.  However, I have learned of facts that support the
conclusion that Lay produced the documents to the Enron Examiner after the Commission filed
this action.

-5-
12.During the telephone conversation described in paragraph 10 above, I learned that
counsel for the Enron Examiner had “reason to believe” that the documents withheld by Lay
from the Commission had been produced to the Examiner.  Attorneys from counsel for the Enron
Examiner stated that they believed the withheld documents were included in a collection of
documents produced pursuant to a “confidentiality agreement” between counsel for Lay and
counsel for the Enron Examiner.  At my request, counsel for the Enron Examiner provided to me
via e-mail a copy of this agreement (unsigned), which is attached hereto as Exhibit B.  This letter
agreement between counsel for Lay and counsel for the Enron Examiner bears the date October
3, 2003, four days after the SEC filed its Application against Lay.  Thus, it appears Lay produced
the same documents withheld from the SEC to the Enron Examiner while this matter was
pending.
13.At approximately 3:50 p.m., and then again at 4:40 p.m., on October 22, 2003,
attorneys from counsel for the Enron Examiner provided additional information concerning Lay’s
production of the withheld documents.  This additional information is described herein:  Lay
provided approximately three and one-half boxes of documents to counsel for the Enron
Examiner in August 2003.  During the course of scheduling the interview described in
Paragraphs 6 through 10 above, counsel for the Enron Examiner sought assurances from counsel
for Lay that all non-privileged documents responsive to the Examiner’s subpoena had been
produced.  Thereafter, Lay and the Examiner agreed that Lay would produce additional
documents “on a voluntary basis, in lieu of a formal response to Examiner Neal Batson’s
Subpoena for Rule 2004 Examination served previously on Mr. Lay[,]” and the Examiner agreed

-6-
“not to share the [documents] with any other individual or entity without [Lay’s] permission
except by court order.”  See Exhibit B.  Subsequently, on October 6, 2003, Lay produced two
compact discs that Lay claimed held copies of documents previously provided to the
Commission staff, comprising approximately six boxes.  On October 8, 2003, Lay produced two
additional compact discs that Lay claimed held copies of documents previously provided to
counsel for litigants in the Enron shareholder class action lawsuit, comprising approximately
seven boxes.  At some point, counsel for Lay specifically told counsel for the Enron Examiner
that the documents being sought by the Commission in this subpoena enforcement action were
included in the documents that had been produced to the Enron Examiner.
14.At approximately 6:15 p.m. on October 22, 2003, counsel for the Enron Examiner
notified me that he would provide no further information to Commission staff concerning the
production of documents by Lay to the Enron Examiner.
Lay Produced The Records To Parties In The Enron Class Action
15.Lay has not disclosed in his Amended Response the identity of the other party to
whom he has produced the documents withheld from the Commission.  However, I have listened
to a message left by Lay’s counsel Deborah Meshulam on the voice-mail of Commission counsel
Luis Mejia on October 24, 2003 before the filing of the Amended Response.  In that message,
Lay’s counsel identifies the other disclosure as one made to “private parties” in the “class
action.”
Lay Has Not Previously Redacted Personal Notations
16.On prior dates, in response to the Commission’s subpoena for documents relating
to Enron, Lay has produced documents that bear notations by Lay referring to personal matters. 

-7-
Kutchey Dec. ¶ 9.  Lay has produced these documents without redacting these notations.
I declare under penalty of perjury that the foregoing is true and correct.  Executed on
October  ___, 2003.
_________________________________
Charles J. Clark

-8-
CERTIFICATE OF SERVICE
I hereby certify that on October ___, 2003, a copy of the attached:
Declaration of Charles J. Clark
was served upon the following parties or their counsel of record via:
[    ]Facsimile
[    ]Federal Express
[    ] First Class Mail, Postage Pre-Paid
[ X] By Hand
Earl J. Silbert
Piper Rudnick
1200 Nineteenth Street, N.W.
Washington, DC  20036-2412
(202) 861-6250
(202) 223-2085 (Fax)
_________________________________
Charles J. Clark

UNITED STATES DISTRICT COURT
FOR THE

DISTRICT OF COLUMBIA

__________________________________________   
)

UNITED STATES SECURITIES )
AND EXCHANGE COMMISSION )

)
Applicant, ) MISC. NO. 03-1962

)
v. )

)
KENNETH L. LAY, )

)
Respondent. )

_________________________________________  )

DECLARATION OF CHARLES J. CLARK IN SUPPORT OF 
SEC’S APPLICATION FOR ORDER REQUIRING OBEDIENCE TO SUBPOENA

I, Charles J. Clark, pursuant to 28 U.S.C. § 1746, do hereby declare as follows: 

1. I am an attorney admitted to the Bar of the State of New York and the Bar of the

District of Columbia.  I am employed as an Assistant Director by the United States Securities and

Exchange Commission (“Commission”) in the Division of Enforcement, at the Commission’s

headquarters office in Washington, D.C.

2. This declaration is submitted in support of the Commission’s Application for an

Order, filed with this Court on September 29, 2003, requiring Kenneth L. Lay to comply with a

subpoena lawfully issued by the Commission, and is based on my direct participation in the

investigation captioned “In the Matter of Enron Corp.”

The Appointment Of The Bankruptcy Examiner

3. On December 2, 2001, Enron Corp. filed for Chapter 11 bankruptcy in the United

States Bankruptcy Court for the Southern District of New York.  On April 8, 2002, the Court



-2-

issued an Order pursuant to 11 U.S.C. §§ 1104(c) and 1106(b) ordering that an Examiner for

Enron be appointed.  See Order (Exhibit A).  According to this Order, the Enron Examiner was

authorized to “investigate all transactions . . . involving special purpose vehicles or entities

created or structured by [Enron] or at the behest of [Enron]” that meet certain criteria.  

4. On May 22, 2002, the United States Trustee for the Southern District of New

York named R. Neal Batson, an attorney with the law firm of Alston & Bird LLP based in

Atlanta, Georgia, to serve as the Enron Examiner.  To assist him in discharging his duties

pursuant to the Order, the Enron Examiner retained Alston & Bird as counsel to the Examiner. 

5. Since his appointment, it is my understanding that Mr. Batson, with the assistance

of Alston & Bird attorneys and others, has conducted an investigation pursuant to the Order and

has, on three prior occasions, submitted reports to the Bankruptcy Court describing the results of

that ongoing investigation.  It is also my understanding that his fourth and final report will be

submitted to the Bankruptcy Court in October 2003, and that this report will describe, among

other things, the role of Lay in the activities under investigation.    

Lay Submits To Questioning By The Examiner

6. On October 16, 2003, I received a telephone call from counsel for the Enron

Examiner.  At that time, and in subsequent telephone calls that day, he informed me that counsel

for Lay and counsel for the Enron Examiner had reached an agreement whereby Lay would be

made available for questioning by the Examiner for the purposes of his investigation.  He further

informed me that counsel for Lay and counsel for the Enron Examiner had entered into an

agreement whereby they specifically agreed to maintain the confidentiality of the circumstances



-3-

and substance of the meeting with Lay.  The meeting was to occur during the pendency of the

instant subpoena enforcement action.

7. Counsel for the Enron Examiner informed me, however, notwithstanding the

confidentiality agreement, he was authorized to provide the following, albeit limited,

information: (1) that Lay had agreed to meet with counsel for the Enron Examiner at 9:00 a.m. on

Saturday, October 18, 2003; (2) that Lay had agreed to answer questions relating to activities

under investigation by the Enron Examiner; (3) that this meeting would be in the form of an

interview (rather than transcribed testimony); (4) that the Enron Examiner was allowed to

describe and attribute the information provided by Lay in his forthcoming report; and (5) that a

number of attorneys representing Lay – including his “criminal counsel” – were aware of Lay’s

intention to meet with the Enron Examiner.  

8. Counsel for the Enron Examiner also stated that, beyond the information that

would be contained in the Examiner’s forthcoming final report, it was not anticipated that the

substance of the interview would be disclosed in the future.  Citing the agreement with counsel

for Lay in which they specifically agreed to maintain the confidentiality of the interview, counsel

for the Enron Examiner declined to answer any further questions, including who initiated the

meeting and whether this interview would be limited to particular subjects.  

9. At approximately 10:00 a.m. on October 22, 2003, I initiated a telephone call to

counsel for the Enron Examiner.  In response to a series of questions, he told me the following:

(1) Lay had met with counsel for the Enron Examiner on Saturday, October 18, 2003; (2) Lay had

answered questions as agreed; and (3) Lay had not asserted his Fifth Amendment rights during



-4-

the interview.  Again citing the agreement with counsel for Lay in which they specifically agreed

to maintain the confidentiality of the interview, counsel for the Enron Examiner declined to

answer any further questions regarding this interview.

10. At approximately 2:15 p.m. on October 22, 2003, counsel for the Enron Examiner

contacted me to clarify certain information he had provided previously.  He acknowledged that,

earlier in the day, he had stated that in essence while he did not think Lay had asserted his Fifth

Amendment rights during the interview, he had not discussed Lay’s interview with the attorneys

who conducted it and therefore did not know with certainty whether Lay asserted his Fifth

Amendment rights as to any particular question.  Moreover, pursuant to the confidentiality

agreement between counsel for Lay and counsel for the Enron Examiner, even if he did know

with certainty what happened during Lay’s interview, he stated that he was not permitted to

disclose this information.  His statements to me were confirmed in a message that was left on my

voice-mail shortly before the actual telephone conversation described in this paragraph.

Lay Produced The Documents At Issue To The Examiner, Apparently After This Action
Was Filed

11. I have read Lay’s Amended Response in this matter and understand that Lay has

now disclosed that he produced the documents withheld from the Commission to the Enron

Examiner.  Lay has not detailed the circumstances of this production, including the date on which

the withheld documents were produced.  However, I have learned of facts that support the

conclusion that Lay produced the documents to the Enron Examiner after the Commission filed

this action.



-5-

12. During the telephone conversation described in paragraph 10 above, I learned that

counsel for the Enron Examiner had “reason to believe” that the documents withheld by Lay

from the Commission had been produced to the Examiner.  Attorneys from counsel for the Enron

Examiner stated that they believed the withheld documents were included in a collection of

documents produced pursuant to a “confidentiality agreement” between counsel for Lay and

counsel for the Enron Examiner.  At my request, counsel for the Enron Examiner provided to me

via e-mail a copy of this agreement (unsigned), which is attached hereto as Exhibit B.  This letter

agreement between counsel for Lay and counsel for the Enron Examiner bears the date October

3, 2003, four days after the SEC filed its Application against Lay.  Thus, it appears Lay produced

the same documents withheld from the SEC to the Enron Examiner while this matter was

pending.

13. At approximately 3:50 p.m., and then again at 4:40 p.m., on October 22, 2003,

attorneys from counsel for the Enron Examiner provided additional information concerning Lay’s

production of the withheld documents.  This additional information is described herein:  Lay

provided approximately three and one-half boxes of documents to counsel for the Enron

Examiner in August 2003.  During the course of scheduling the interview described in

Paragraphs 6 through 10 above, counsel for the Enron Examiner sought assurances from counsel

for Lay that all non-privileged documents responsive to the Examiner’s subpoena had been

produced.  Thereafter, Lay and the Examiner agreed that Lay would produce additional

documents “on a voluntary basis, in lieu of a formal response to Examiner Neal Batson’s

Subpoena for Rule 2004 Examination served previously on Mr. Lay[,]” and the Examiner agreed



-6-

“not to share the [documents] with any other individual or entity without [Lay’s] permission

except by court order.”  See Exhibit B.  Subsequently, on October 6, 2003, Lay produced two

compact discs that Lay claimed held copies of documents previously provided to the

Commission staff, comprising approximately six boxes.  On October 8, 2003, Lay produced two

additional compact discs that Lay claimed held copies of documents previously provided to

counsel for litigants in the Enron shareholder class action lawsuit, comprising approximately

seven boxes.  At some point, counsel for Lay specifically told counsel for the Enron Examiner

that the documents being sought by the Commission in this subpoena enforcement action were

included in the documents that had been produced to the Enron Examiner.

14. At approximately 6:15 p.m. on October 22, 2003, counsel for the Enron Examiner

notified me that he would provide no further information to Commission staff concerning the

production of documents by Lay to the Enron Examiner.

Lay Produced The Records To Parties In The Enron Class Action

15. Lay has not disclosed in his Amended Response the identity of the other party to

whom he has produced the documents withheld from the Commission.  However, I have listened

to a message left by Lay’s counsel Deborah Meshulam on the voice-mail of Commission counsel

Luis Mejia on October 24, 2003 before the filing of the Amended Response.  In that message,

Lay’s counsel identifies the other disclosure as one made to “private parties” in the “class

action.”

Lay Has Not Previously Redacted Personal Notations

16. On prior dates, in response to the Commission’s subpoena for documents relating

to Enron, Lay has produced documents that bear notations by Lay referring to personal matters. 



-7-

Kutchey Dec. ¶ 9.  Lay has produced these documents without redacting these notations.

I declare under penalty of perjury that the foregoing is true and correct.  Executed on

October  ___, 2003.

_________________________________
Charles J. Clark



-8-

CERTIFICATE OF SERVICE

I hereby certify that on October ___, 2003, a copy of the attached:

Declaration of Charles J. Clark

was served upon the following parties or their counsel of record via:

[    ] Facsimile
[    ] Federal Express
[    ] First Class Mail, Postage Pre-Paid
[ X] By Hand

Earl J. Silbert
Piper Rudnick
1200 Nineteenth Street, N.W.
Washington, DC  20036-2412
(202) 861-6250
(202) 223-2085 (Fax)

_________________________________
Charles J. Clark