Auditor refuses to testify about Enron

Associated Press

WASHINGTON – Fired auditor David Duncan was solely responsible for the massive destruction of Enron documents, officials of the energy company’s accounting firm told skeptical lawmakers Thursday. Duncan refused to answer questions, invoking the Fifth Amendment.

Lawmaker after lawmaker denounced the rushed paper shredding at Arthur Andersen and the complex business practices at Enron as Congress delved into the biggest bankruptcy in U.S. history. The company’s collapse cost investors billions of dollars, wiped out the retirement savings of thousands of employees and raised questions about the company’s extensive political connections.

Nancy Temple, a lawyer for Andersen, said she reminded auditors about the firm’s policy for retaining documents, but didn’t order their preservation or destruction after learning of a federal investigation of Enron.

“I was unaware of any shredding activity,” she insisted under intense questioning by members of the House Energy and Commerce Committee’s investigative panel.

Lawmakers disclosed that the Andersen attorneys had hired an outside law firm on Oct. 9, in large part in anticipation of possibly being sued over Enron accounting practices. That showed that Temple and other Andersen officials had an early indication of trouble and should have ordered all Enron-related documents to be saved, the House members said.

As Congress’ sprawling inquiry into Enron’s collapse stepped up, Senate Governmental Affairs Committee Chairman Joseph Lieberman said he will ask that panel to issue subpoenas for Enron’s and Andersen’s documents regarding their contacts with the White House and several federal agencies on regulations affecting the energy-trading company.

The financial debacle has touched more than half the members of Congress who accepted campaign contributions from the energy trading company, as well as top members of the Bush administration who were contacted by Enron as it teetered toward bankruptcy.

Andersen senior officials Dorsey Baskin and C.E. Andrews, appearing as subpoenaed witnesses with Temple, repeatedly pinned the blame on Duncan, whom Andersen fired last week. Andersen itself has been fired by Enron as its accounting firm.

“This effort was undertaken without any consultation with others in the firm or, so far as we are aware, with legal counsel,” Baskin said of the shredding.

Andrews insisted that Duncan, as Andersen’s lead auditor for Enron, was solely responsible for preserving documents.

Copyright ©2002 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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