Enron Auditor Says Documents Gone
By MARCY GORDON, AP Business Writer
WASHINGTON (AP) - The firm that audited the books of collapsed Enron Corp., Arthur Andersen LLP, disclosed Thursday that its employees had destroyed a ``significant but undetermined'' number of documents related to the company.
Federal law enforcement agencies and congressional investigators are seeking the documents as part of their inquiries into the failure of the giant energy-trading company, which left countless investors burned and employees out of work with billions of dollars of losses in their Enron-heavy retirement accounts.
Rep. Billy Tauzin, R-La., whose House Energy and Commerce Committee is among the agencies and panels investigating, called the destruction of documents ``a deeply troubling development.''
``Anyone who destroyed records simply out of stupidity should be fired. Anyone who destroyed records to try and subvert our investigation should be prosecuted,'' Tauzin said.
Ken Johnson, a spokesman for Tauzin, said Andersen officials told committee investigators Thursday that thousands of documents had been destroyed.
Houston-based Enron entered last month into the largest corporate bankruptcy in U.S. history.
At the Securities and Exchange Commission (news - web sites), which is investigating Andersen's auditing work for Enron, Enforcement Director Stephen M. Cutler said destruction of documents ``is obviously an extremely serious matter.''
``Documents are an essential ingredient in our investigations,'' he said. ``The destruction of documents by Arthur Andersen will not deter us from pursuit of our investigation and will be included within the scope of our investigation.''
The SEC is scrutinizing questionable partnerships Enron used to keep some $500 million in debt off its books and allow company executives to profit from the arrangements.
Andersen, one of the Big Five accounting firms, said in a statement that in recent months, electronic files and other documents related to its auditing of Enron had been destroyed or deleted.
Chicago-based Andersen said its company policy ``required in certain circumstances the destruction of certain types of documents.''
However, the firm said, millions of documents related to Enron still exist, and it has managed to retrieve some of the deleted electronic files. Andersen said it is continuing retrieval efforts through electronic backup files, ``and is continuing in its efforts to fully learn and understand all the facts related to this issue.''
Andersen has asked John Danforth, the former Missouri attorney general and U.S. senator, ``to conduct an immediate and comprehensive review of Andersen's records management policy and to recommend improvements.''
The surprise announcement by Andersen came in a day punctuated by revelations from members of the Bush administration concerning Enron.
The White House disclosed that Enron Chairman Kenneth L. Lay reached out to two of President Bush (news - web sites)'s Cabinet officers when the energy company was collapsing. Attorney General John Ashcroft (news - web sites), who received campaign contributions from Enron executives during his failed 2000 senatorial bid, said he will recuse himself from the criminal investigation of Enron being conducted by the Justice Department (news - web sites).
Andersen said that in recent months, people in the firm involved with the Enron auditing ``disposed of a significant but undetermined number of electronic and paper documents and correspondence.'' |
