Fired Enron auditor refusing to testify at hearing on document shredding

By Marcy Gordon

Associated Press

WASHINGTON – The Arthur Andersen auditor fired for his role in the destruction of Enron-related documents is refusing to testify to Congress about the shredding, his attorney said Wednesday. He still must show up at the hearing, however.

The House Energy and Commerce Committee served a subpoena Wednesday morning on the auditor, David Duncan, to testify at a hearing Thursday.

But one of Duncan’s attorneys, Robert Giuffra, told the committee in a letter that “he will rely on his constitutional right not to testify” unless he is given immunity by the panel.

Congress can compel witnesses to show up, but cannot force them to answer potentially incriminating questions without granting them immunity from criminal prosecution.

Giuffra said the Energy and Commerce investigative subcommittee is taking the unusual step of requiring Duncan to come before it publicly Thursday and invoke his Fifth Amendment right not to testify.

“He’s now flying (to Washington) from Houston and the committee is going to make him exercise his constitutional rights on national television,” Giuffra said.

Most often, when a witness expresses a desire to invoke the Fifth Amendment right against self-incrimination, congressional panels do not require a public appearance to do so. Duncan already has talked to committee investigators.

Subpoenas also were served Wednesday morning on Andersen attorney Nancy Temple and risk manager Michael Odom for their testimony at Thursday’s hearing.

“No one’s getting a free pass on this one,” said Ken Johnson, spokesman for the House Energy and Commerce Committee.

The committee had planned to also subpoena Andersen chief executive officer Joseph Berardino. But the accounting firm agreed late Tuesday to send another top official familiar with Andersen’s internal investigation into the document destruction, Johnson said.

He said committee investigators were negotiating with Andersen officials over which official would appear.

Enron’s own alleged shredding, meanwhile, is being investigated by FBI agents at the bankrupt energy company’s Houston headquarters.

In a sprawling inquiry with both financial and political overtones, 11 House and Senate committees are investigating the Enron debacle, while the Justice Department and the Securities and Exchange Commission pursue their own less-visible probes.

Enron’s slide into the biggest bankruptcy in U.S. history on Dec. 2 left thousands of employees out of work and stripped of their retirement savings after Enron temporarily barred them from selling company stock from their Enron-dominated 401(k) accounts. Investors around the country were burned.

President Bush said he was angered that his mother-in-law, Jenna Welch, lost about $8,000 on her investment in Enron stock.

“A lot of the stockholders didn’t know all of the facts. And that’s wrong,” Bush said Tuesday.

The president has received large political contributions over the years from Enron Chairman Kenneth Lay, who is expected to testify before two congressional committees on Feb. 4.

Bush also urged Congress not to be distracted by the Enron investigation.

“I’m confident that all the facts will come out on Enron. And I’m also confident that if Congress has the right attitude, we can get a lot done,” he said in a pitch for his economic revival plan.

In Houston on Tuesday, FBI agents arrived at the soaring headquarters building to look into other alleged shredding while attorneys for investors suing Enron asked a federal judge to bar the company and Andersen from destroying any more records.

Enron said it had posted security guards to block employees from floors holding accounting and finance records.

The judge urged attorneys for Enron and the investors to come up with a plan to protect company documents and get back to her on Wednesday.

Chicago-based Andersen fired Duncan last week for his role in the extensive destruction of Enron-related documents after federal regulators began investigating possible accounting improprieties.

Temple and Odom, while expressing willingness to testify, have raised concerns about protecting confidential information relating to the investigation, Johnson, the committee spokesman, said.

A former Enron executive, Maureen Castaneda, has alleged that document destruction took place openly at the company headquarters starting after Thanksgiving and continuing until as recently as last week.

The Securities and Exchange Commission started looking into Enron’s accounting in mid-October, after the company reported a third-quarter loss of more than $600 million. The SEC’s inquiry eventually included demands for financial documents from Enron and Andersen.

On the Net: Enron Corp. site: http://www.enron.com