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USA: Fired Andersen Partner Refuses to Testify on Enron

by Kevin Drawbaugh and Susan CornwellReuters
January 24th, 2002

A fired partner of auditor Andersen on Thursday refused to testify to Congress on the destruction of evidence in the collapse of energy giant Enron, prompting lawmakers to say he was frustrating their probe.

Invoking his constitutional right against self-incrimination, a stony-faced David Duncan was quickly dismissed from the hearing on who was to blame for Enron Corp's demise, which has impoverished retirees, destroyed thousands of jobs and wiped out billions of dollars in shareholder capital.

"Enron robbed the bank, Arthur Andersen provided the getaway car and they say you were at the wheel," 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 previously, through his lawyer, that he was following instructions from Andersen in-house lawyer Nancy Temple and is cooperating with government investigators into the collapse of Enron.

At a simultaneous committee hearing in the Senate, Sen. Joseph Lieberman said he would further investigate Enron's links to the Bush administration, saying the company had been exposed as a "house of cards built on outrageous greed and deceit".

Greenwood, speaking at one of two congressional hearings on Enron on Thursday, lashed out at Duncan for his refusal.

"While Mr. Duncan has complied with the subpoena requiring his appearance today, by invoking his Fifth Amendment rights .. he will hamper the important work of this committee in our search for the truth about what transpired at Andersen during the critical period we are examining," he said.

Andersen Blames Duncan

In prepared testimony for the panel, Andersen squarely laid the blame on the Houston-based Duncan.

The firm accused him of purposefully directing destruction of "a very substantial volume of documents."

But 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.

The hearings are the first of nine scheduled over the next six weeks into Enron's spectacular decline -- in a matter of weeks -- from an energy trading colossus to the biggest U.S. bankruptcy filing in history amid questions about the company's accounting practices.

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.

On the other side of Capitol Hill, the U.S. Senate Governmental Affairs Committee was hearing from high-ranking former Securities and Exchange Commission officials and academic experts on whether Enron's troubles should have been spotted earlier and how to strengthen current safeguards.

At the Senate hearing Lieberman, a Connecticut Democrat, said his panel would ask the White House and federal agencies for further details on what they knew and did in the years leading up to Enron's collapse.

Enron was the largest contributor to President Bush's election campaign, and Democrats charge that it tried to influence the administration's energy policy before the company's collapse.

Lieberman said his committee will report its findings to the public in hearings to be conducted later this year. He hoped they would recommend changes in law and regulation to "strengthen the watchdogs in and out of the federal government so that nothing like the Enron scandal ever happens again."





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