Houston ? Enron Corp. founder Kenneth Lay received a barrage of written warnings from employees questioning the energy giant’s accounting integrity in the fall of 2001 but said on Monday that he was too busy trying to save the company to investigate.

The ex-chairman was combative during his fifth day on the witness stand in his fraud and conspiracy trial, accusing a federal prosecutor of highlighting only negative information.

“I didn’t have that luxury (of hindsight) when I was right in the middle of battle,” Lay protested.

Prosecutor John Hueston, in his third day of cross-examination, sought to show that Lay ignored warnings of accounting impropriety and financial doom after resuming as chief executive upon the resignation of co-defendant Jeffrey Skilling from that role in mid-August 2001. Enron, once the seventh-largest company in the U.S., filed for bankruptcy protection in December.

Yet in November 2001, with Enron’s stock and reputation in the tank, Lay told employees he could “not have ever contemplated” what lay ahead for the company and its stockholders.

One warning came in October 2001 via an e-mail from Jim Schweiger, a longtime trader, three days after Lay announced a massive third-quarter loss and $1.2 billion writedown in shareholder equity.

The bulk of the losses had been triggered by the unwinding of financial structures, run by former Chief Financial Officer Andrew Fastow, which prosecution witnesses testified were used to hide faltering businesses and boost earnings.

“The fact that senior management and the (Enron) board of directors knew these transactions were being used to manipulate earnings and the stock price, and took advantage of that knowledge to sell their ENE stock options, in my opinion, is CRIMINAL,” according to Schweiger’s e-mail displayed on a large screen, with portions of it read aloud to jurors.

If Lay would “play the game of lying, cheating and stealing,” he should have a “plausible story,” the e-mail said.

Lay bristled when Hueston pressed him on why he didn’t investigate Schweiger’s allegations.

“I was getting information from all sides, Mr. Hueston,” Lay said.

Law enforcement officials escort Enron founder Kenneth Lay and his wife Linda away from the courthouse after his fifth day on the stand in his fraud and conspiracy trial Monday, May 1, 2006 in Houston.

Schweiger’s Oct. 19, 2001, e-mail also alluded to the millions of dollars Fastow had earned from the partnerships. Lay waited until the next week to assign two directors to ask the CFO about it – after regulators had already launched an inquiry into it. Fastow was eventually fired over the amount he pocketed from the partnerships.

As early as September, The Wall Street Journal also asked how much money Fastow earned from the partnerships. Lay reiterated on Monday that he had refused to answer those questions at the behest of Enron public relations officials and did not himself ask Fastow about the earnings.

Lay said it was easy for the prosecutor to second-guess his decisions.

“The corpse is on the gurney now, Mr. Hueston, and you’re carving it up any way you want to carve it up,” he said.

Lay and Skilling are accused of lying to investors and employees about Enron’s financial prowess when they allegedly knew accounting tricks hiding bad news and inflated profits.

The two men counter no fraud occurred at Enron other than that committed by a few executives who stole money through secret side deals. They attribute the company’s descent into bankruptcy proceedings to a combination of bad publicity and lost market confidence.

While former Enron executive Sherron Watkins famously warned Lay in late August 2001 that Enron could “implode in a wave of accounting scandals,” Hueston showed she wasn’t alone.

Former Enron Chief of Staff Steve Kean told Lay in an August 2001 e-mail read in court Monday that the company’s indecipherable financial disclosures could attract accounting scrutiny.

Lay was expected to wrap up his testimony today.

Hueston also gave jurors a further glimpse of Lay’s former lifestyle, which in the first half of 2001 included chartering a boat for $200,000 for his wife’s birthday party, $4,700 for a two-night hotel stay on the French Riviera and $12,000 for his own birthday party at a resort.