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Andersen blames fired partner
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January 24, 2002: 2:50 p.m. ET
Fired Andersen auditor Duncan invokes Fifth Amendment, declines to testify before panel.
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NEW YORK (CNN/Money) - Executives of accounting firm Andersen LLP attempted Thursday to place the blame for the destruction of Enron Co. auditing documents entirely on fired partner David Duncan.
Dorsey Baskin, managing director of Andersen's professional standards group, told the Subcommittee on Oversight and Investigation, that Duncan directed staff to destroy documents as the investigation began. Baskin is appearing instead of Andersen CEO Joseph Berardino.
Managing partner C.E. Edwards said that once Andersen found out about the shredding, the accounting firm owned up to the actions and revealed them publicly.
Duncan himself declined to testify at the hearing. The auditor, appearing before the Congressional panel, invoked his Fifth Amendment right against self-incrimination when asked specifically by Rep. James Greenwood (R-Pa.), chairman of the House Energy and Commerce oversight subcommittee, if he gave the order to destroy the documents.
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Rep. Cliff Stearns (R-Fla.)
Congressman questions Andersen executives | |
Duncan then said he would invoke the Fifth Amendment to all questions. Details
Andersen attorney Nancy Temple also testified and repeatedly denied that her e-mail spurred the document shredding. Duncan had told Congressional investigators that the document shredding had begun after he received an e-mail from Temple, detailing Andersen's document retention policies.
"I was not aware of any shredding activities," Temple said.
After five hours of testimony, Rep. Greenwood said the panel had not received enough evidence to conclude that Duncan acted independently. Another Congressman questioned whether the fired auditor was being made a scapegoat.
Enron, a former energy trading pioneer, filed for bankruptcy protection on Dec. 2 - the biggest Chapter 11 filing in U.S. history. Accounting firm Andersen has come under scrutiny for its auditing of the company.
Rep. Billy Tauzin (R-La.), chairman of the House Energy and Commerce Committee, told CNN in an interview before the hearing started it is likely criminal charges will be filed because of indications that both Enron and Andersen shredded financial documents after Enron filed for bankruptcy and as it faced numerous investigations and lawsuits. "I would not be surprised if some criminal indictments come out of this," Tauzin said. One congressional aide told CNN the shredding at Andersen was more widespread than the company has acknowledged, involving as many as 80 employees. 
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