Andersen Under Fire at Enron Hearings
Thursday January 24, 3:09 pm Eastern Time
WASHINGTON (Reuters) - Auditing firm Andersen came under heavy fire on Thursday, as a sacked Andersen partner refused to testify in Congress on the shredding of documents related to the Enron collapse, and senior Andersen officials tried to lay blame on their former partner.
And, as a new round of congressional hearings got underway into the energy giant's collapse and Anderson's involvement as its auditor, a senior lawmaker said Andersen officials were aware early on of Enron's problems.
Top Andersen executives said the destruction of documents being sought by investigators was wrong and largely the fault of David Duncan, a partner who managed the Enron account before he was fired.
Invoking his constitutional right not to incriminate himself, a stony-faced Duncan was quickly dismissed from one of two Capitol Hill hearings, prompting lawmakers to say he was frustrating their probe.
``Enron robbed the bank, Arthur Andersen provided the getaway car and they say you were at the wheel,'' said Rep. Jim Greenwood, chairman of the House Energy and Commerce subcommittee on oversight and investigations.
Andersen fired Duncan earlier this month for what it said was his role in destroying documents related to the Enron audit. Duncan has said, through his lawyer, that he was following instructions from Andersen.
The hearings are the first of nine scheduled over the next six weeks into Enron's spectacular decline, going in a matter of weeks from energy trading colossus to the biggest U.S. bankruptcy filing in history.
Enron Chairman and Chief Executive Officer Ken Lay resigned late on Wednesday, saying he reached his decision in cooperation with the company's board and creditors committee.
Earlier on Thursday, Rep. Billy Tauzin, the Republican chairman of the House Energy and Commerce Committee, said evidence would emerge from the subcommittee hearing that would show the level of involvement of top Andersen officials.
``Senior officials and partners in Arthur Andersen were quite aware of the problems of Enron early off and began this process of invoking the so-called retention and destruction policy to clean out files and to alter and delete files from the records,'' Tauzin told ABC's ``Good Morning America'' show.
Tauzin said there were at least 80 people under Duncan who were working overtime in an attempt to clean out the files. He also said lawmakers interviewed Duncan for 4-1/2 hours before the FBI and Justice Department announced its interest in the case late last year.
In the Senate, where another committee was holding a simultaneous hearing, Connecticut Democratic Sen. Joseph Lieberman said he would further investigate Enron's links to the Bush administration. He said Enron had been exposed as a ''house of cards built on outrageous greed and deceit.''
Separately, Army Secretary Thomas White, the highest-ranking former Enron employee in the Bush administration, said in a letter to California Democratic Rep. Henry Waxman that no-one had asked him to intervene on Enron's behalf.
And, also on Capitol Hill on Thursday, Federal Reserve Chairman Alan Greenspan said he did not think the collapse of Enron would undermine confidence in the broader economy. ``I actually don't have that concern,'' he said.
WAS DUNCAN A SCAPEGOAT?
While Andersen squarely laid the blame on the Houston-based Duncan in prepared testimony for the House subcommittee, Florida Republican Rep. Cliff Stearns said Duncan may have been following orders, from higher up in Andersen, coded as reminders of document retention policies.
``Is Mr. Duncan being made a scapegoat?'' Stearns wondered aloud in opening remarks.
After Greenwood asked Duncan if he ordered destruction of documents to subvert government investigations into Enron's collapse, and if he did so at the direction of others, Duncan invoked his constitutional right not to incriminate himself.
``I would like to answer the committee's questions, but on the advice of my counsel, I respectfully decline to answer the question based on the protection afforded me under the Constitution of the United States,'' said Duncan.
``Respectfully, that will be my response to all your questions,'' he told the committee. He was then excused from the witness table.
Andersen partner C.E. Andrews and Andersen managing director Dorsey Baskin, in written testimony to the subcommittee, said Duncan directed the purposeful destruction of a very substantial volume of documents.
``In doing so, he gave every appearance of destroying these materials in anticipation of a government request for documents,'' the two said.
``The case of Mr. Duncan was clear enough to allow us to draw conclusions about his responsibility at an early stage of the inquiry. That is not true of other Andersen personnel who were involved with the destruction of documents,'' the two Andersen executives told the House subcommittee. |
