Andersen argues shredding was routine

By MILTON LAWSON   |   June 5, 2002 at 9:45 PM   |   0 comments

HOUSTON, June 5 (UPI) -- An attorney for Arthur Andersen LLP argued Wednesday that the accounting firm's employees were doing a routine job when they shredded Enron Corp. documents and they did not intend to subvert a federal investigation.

In closing arguments, defense attorney Rusty Hardin disputed government claims during the obstruction of justice trial that Andersen destroyed the documents to derail a Securities and Exchange Commission investigation of accounting practices at Enron.

Hardin said David Duncan, the Andersen supervisor of Enron audits, was telling the truth earlier in the trial when he testified he was only carrying out the company's policy on retention of critical documents and the destruction of extraneous ones.

"The incredible irony in this case is that we are being prosecuted based on evidence that we preserved and gave to the government," he told the jury.

Duncan pleaded guilty to obstruction of justice April 9 and was the government's star witness but Hardin charged in his closing argument that the former Andersen partner was "corruptly persuaded" by the government to enter the plea agreement.

Assistant U.S. Attorney Samuel Buell charged during his closing that Andersen began shredding the Enron records Oct. 23 after company officials learned that the SEC was going to investigate the troubled Houston energy trading company.

Buell said Nancy Temple, an in-house Andersen attorney, coordinated multiple offices and personnel to make sure they were using the company's document retention policy to destroy critical Enron documents.

"Simple reason and common sense says they were getting ready to defend themselves against the SEC and litigation," he said. "They were girding themselves for the Enron wars."

Temple was listed as a potential witness for the Anderson trial but she was never called to testify.

Hardin said later Temple was being unjustly targeted by the prosecution because Duncan had not testified as they wanted him to do during the trial.

"Nancy Temple has been wronged, personally, legally and morally in this trial," the Andersen lawyer said. "We don't do this in this country ordinarily. We don't use them as a substitute corrupt persuader when the one we brought to the ball doesn't say what we want."

The government also presented a graph showing that the courier shipments of Enron records to the Andersen office for shredding climbed from 70 to 90 pounds a day during a routine day to nearly 2,500 pounds about Oct. 24 when the shredding began.

Buell also anticipated that the defense would argue later in the day that the destruction was routine.

"The suggestion that this was routine cleanup is ridiculous," he said. "They did this two weeks before receiving a subpoena in the midst of a crisis."

U.S. District Judge Melinda Harmon told the jurors they would have to reach a unanimous verdict without a reasonable doubt in order to convict Andersen. The jury was expected to begin deliberation Thursday after hearing eight hours of closing arguments.

Andersen, once the fourth largest accounting firm in the nation, was the chief auditor for Enron before it filed for Chapter 11 protection last December in the nation's largest bankruptcy. This is the first criminal trial to come out of the scandal.

Andersen has lost more than 200 clients and laid off 7,000 of its 26,000 employees since the Enron collapse.

If convicted, Andersen could be fined up to $500,000 or put on probation, which could mean restitution, a moratorium on certain types of business or other restrictions.

© 2002 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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