Lay's Sister Had A Sweet Deal Too

Ken Lay isn't the only member of his family to make a name in Houston's business elite. Travel Agency in the Park, co-owned by his younger sister Sharon Lay, 56, took the No. 4 spot in the Houston Business Journal's 2001 ranking of woman-owned businesses. But Ken Lay didn't just set an example for his sister--his company sent lots of deals her way. From 1996 through 2000, Sharon Lay's company (renamed Alliance Worldwide in December) received $6.8 million in commissions from Enron travel, according to SEC documents. Enron commissions reportedly accounted for half the travel company's revenue.

While Enron's employees were in theory permitted to book their business travel elsewhere, Sharon Lay's was the agency of choice. Callers to Enron's corporate-travel department still reach a telephone extension at Alliance Worldwide. Enron managers strongly discouraged employees from going elsewhere, according to former Enron staff members. Says one: "You only did that once." A memo last June reminded Enron employees to use TAP because of its volume discounts. But in some cases, the agency quoted fares that were no better than published rates, and still charged Enron a $30-per-ticket fee, Enron insiders say. Sharon and Ken Lay declined to comment.

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Other Houston travel firms knew they had little hope of an Enron contract. "Let's just say it was hard to get in," says Gary Pearce, general manager of Navigant, one of the city's largest corporate-travel firms. For all of Ken Lay's belief in free-market competition, for family he made exceptions. Enron also acquired a company owned in part by Ken Lay's son Mark, who then received a three-year, $1 million employment contract. As for Ken Lay, he continues to travel on a private Enron jet.