Wednesday, April 10, 2002

Andersen auditor cuts a deal

Duncan admits shredding documents while at Enron

By Kristen Hayes
The Associated Press

        HOUSTON — The Arthur Andersen auditor who oversaw Enron Corp.'s books pleaded guilty Tuesday to directing the shredding of Enron documents and agreed to cooperate with prosecutors.

        Former partner David B. Duncan is believed to be the first person in the Enron case to strike a deal with federal prosecutors. He was fired by Andersen after the firm acknowledged the large-scale destruction of Enron documents and deletion of computer files related to the collapse of the energy giant.

        Mr. Duncan admitted persuading co-workers and others to shred documents to thwart the government's investigation into the collapse of the energy giant, according to court records filed earlier Tuesday.

        Mr. Duncan, who was fired in January shortly after Andersen acknowledged massive shredding, pleaded guilty to the charge that he did “knowingly, intentionally and corruptly persuade and attempt to persuade other persons ... to withhold records, documents and other objects from an official proceeding, namely an investigation by the Securities and Exchange Commission.”

        Standing before U.S. District Judge Melinda Harmon, Mr. Duncan described how he ordered Andersen employees to comply with a policy to retain certain documents and destroy others on Oct. 21, two days after he learned the SEC was investigating the company. “I also personally destroyed such documents,” he told the judge. “I accept that my conduct violated federal law.”

        An obstruction conviction can carry fines and up to 10 years in prison. It was unclear what punishment Mr. Duncan would receive in exchange for his plea, although Judge Harmon warned him the sentence could be more severe than anything prosecutors might have discussed with him.

        Under the plea deal, Mr. Duncan is immune to further prosecution related to the Enron case as long as he continues to cooperate with federal authorities — which could include testimony at future trials — and agrees not to sell his story or otherwise profit from the debacle.


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