Andersen execs offer leads on shredding
By Flynn McRoberts
Chicago Tribune staff reporter
Published February 21, 2002
HOUSTON -- Two partners in the Andersen accounting firm's office here have given what plaintiffs' attorneys described Wednesday as a road map to help determine who ordered Enron documents destroyed and why they did it.
In depositions taken in a conference room of a Houston hotel this week, partners Thomas H. Bauer and Michael M. Lowther provided a "guide to further information, but we need it from other people," said Roger Greenberg, the lead local counsel for a massive securities-fraud lawsuit against Enron executives and Chicago-based Andersen.
So lawyers for the plaintiffs, led by the University of California Board of Regents, plan to use Bauer's and Lowther's depositions to ask the federal judge overseeing the lawsuit to let them depose "a handful" of additional Andersen employees regarding the firm's document destruction and retention policies.
"The essential questions--who destroyed what documents and why--we have not received answers to," Greenberg said. "We're going to be asking for people who can testify to that information."
The plaintiffs' request for this week's depositions, which are limited to issues regarding destruction and recovery of paper and electronic documents related to Enron, were approved last month by U.S. District Judge Melinda Harmon.
Harmon also is overseeing a class-action lawsuit filed on behalf of Enron retirement plan participants, who notched their own legal victory Wednesday in bankruptcy court in New York as U.S. Bankruptcy Judge Arthur Gonzalez allowed their lawsuits to move forward.
Gonzalez lifted a stay on those cases starting June 21 but gave Enron 120 days to argue why the stay should remain in place, according to attorneys involved in the case.
The thicket of litigation involving Enron's collapse falls into three categories: the bankruptcy, a class-action lawsuit filed on behalf of Enron retirement plan participants and another class action on behalf of Enron shareholders such as pension funds.
The Andersen depositions are for the shareholders' lawsuit. Lowther and Bauer were placed on leave after Andersen admitted to shredding documents after the Securities and Exchange Commission began probing Enron's accounting methods last fall. Lowther reportedly remains on staff but was relieved of management duties.
David B. Duncan, the fired Andersen partner in charge of the Enron account, also was deposed this week, but he asserted his 5th Amendment right against self-incrimination, Greenberg said. Duncan did the same when called before Congress last month.
Two other Andersen officials from its Houston office--Michael C. Odom, former risk management partner, and Stephen Goddard Jr., former managing partner--are scheduled to be deposed this week, Greenberg said. They, too, were placed on administrative leave, according to court filings.
Nancy Temple, a lawyer at Andersen's Chicago headquarters, will be deposed on March 4, Greenberg said.
Temple sent an e-mail to Andersen's Houston office on Oct. 12 spelling out the firm's document destruction policy for auditors.
Temple told a U.S. House subcommittee last month that she reminded auditors about the firm's policy for retaining documents but didn't order they be preserved or destroyed after learning the SEC had begun investigating Enron.
Asked about the nature of Lowther's deposition, taken Wednesday, and Bauer's, taken Tuesday, Greenberg replied: "We're not doing cartwheels. They've simply provided additional lines on a map that lead to other people from whom we can hopefully get more concrete information."
Also Wednesday, a spokesman for the University of California Board of Regents dismissed a report that Andersen had offered a settlement of $260 million out of fear that the Enron scandal could put it out of business.
"The university has had no substantive discussions with Andersen" said spokesman Trey Davis.
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