Jury deliberates first day without verdict

By MILTON LAWSON  |  June 6, 2002 at 8:22 PM
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HOUSTON, June 6 (UPI) -- Jurors in the federal trial of Arthur Andersen LLP retired late Thursday without reaching a verdict on a charge that the accounting firm shredded Enron Corp. records sought in a federal investigation.

The nine men and three women will resume their deliberations at 9 a.m. CDT Friday.

During the day, the jurors sent notes to U.S. District Judge Melinda Harmon, asking for pens and paper, a list of exhibits and a transcript of star government witness David Duncan's testimony. The judge told them to request specific portions of Duncan's testimony.

"The jury would be there three weeks if we gave them David Duncan's testimony," she remarked, meaning it would be a lengthy transcript.

Duncan, a former Andersen partner and the supervisor of Enron audits, was testified for several days during the trial now in its fifth week.

The jury received the obstruction of justice case late Wednesday night after listening to more than eight hours of closing arguments. They retired to the jury room but in about an hour they told the judge they would begin deliberations early Thursday.

Andersen, once the nation's fourth largest accounting firm, is charged in a federal indictment with shredding thousands of Enron records after it was learned that the Securities and Exchange Commission was going to investigate Enron.

If Andersen is convicted, the company could be fined up to $500,000 and more importantly, prohibited from performing audits for public companies. The Chicago-based firm has already lost more than 600 clients due to the Enron collapse.

In closing arguments, government attorneys said Andersen employees were "girding themselves for the Enron wars" when they began shredding documents, but the defense argued they were only carrying out routine destruction of extraneous records.

"The incredible irony in this case is that we are being prosecuted based on evidence that we preserved and gave to the government," lead Andersen attorney Rusty Hardin said.

Andersen attorneys argued during the 21 days of testimony that most of the Enron documents were not destroyed and they made the basis of the government's case. They said shredding of extraneous records is a common business practice.

Hardin said the government's star witness, Duncan, told the truth when he said he didn't think he had done anything wrong at the time. Duncan pleaded guilty April 9 to obstruction of justice in a plea bargain with the Justice Department.

Federal prosecutor Samuel Buell said Andersen officials knew when they began shredding documents Oct. 23 that they were facing another SEC investigation. He said they had recent experience with other SEC reviews of their accounting practices.

"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."

In her instructions, Judge Harmon told the jurors a unanimous verdict would be needed to convict Andersen on the charge. The jurors must sift through testimony from 28 witnesses and scores of exhibits.

Although the collapse of Enron in the nation's largest bankruptcy has spurred scores of federal investigations and civil lawsuits, the Andersen obstruction of justice case is the first criminal case to actually go to the trial.

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