- The Washington Times - Tuesday, January 22, 2002

A House subcommittee probing the collapse of Enron Corp. wants executives from the company's accounting firm to explain on Thursday the shredding of Enron-related documents.
The House Energy and Commerce subcommittee on oversight and investigations could issue subpoenas to compel reluctant witnesses.
The subcommittee has invited for questioning Arthur Anderson & Co. CEO Joseph Berardino; a key Andersen lawyer, Nancy Temple; and the chief auditor for the firm's Enron account, David B. Duncan, who was fired last week.
"We will invite them, and if they decline the invitation, we will subpoena them," said the subcommittee's spokesman, Ken Johnson, noting that Mr. Berardino could send the firm's general counsel, Andrew Pincus, to testify in his place.
The panel is trying to determine who ordered the destruction of thousands of Enron-related e-mail and paper documents outlining the Houston-based energy company's financial condition.
Sources close to the probe said the inquiry has focused, in part, on Mr. Duncan and Mrs. Temple.
Also on Thursday, the Senate Governmental Affairs Committee will discuss Enron's collapse. The panel's chairman, Sen. Joseph I. Lieberman, Connecticut Democrat, said the committee wants to know whether federal agencies could have done more to protect thousands of people and businesses hurt by Enron's failure.
"The untimely and wholly unexpected failure of a corporate giant like Enron is an alarm call to all of us in government to make sure we are doing all we can to protect the integrity of our markets and the savings and investments of the American people," Mr. Lieberman said in a statement.
Mr. Lieberman said the committee will call experts on investing and regulation of the financial markets, energy, trading, pensions and retirement savings to speak about flaws in the system "that allowed so many people to be victimized by Enron's collapse."
On Oct. 23, Mr. Duncan called an "urgent meeting" to organize the destruction of Enron-related records a process that lasted until Nov. 9, when Andersen received a subpoena from the Securities and Exchange Commission for Enron-related records.
Mr. Duncan's attorneys have argued their client was only following orders from Andersen's corporate headquarters in Chicago when he began the document destruction. He told panel lawyers last week it was "unusual" for Andersen's legal team to talk with auditors about the destruction of accounting records, the sources said.
Mrs. Temple is the author of an Oct. 12 e-mail that Mr. Duncan told the lawyers led to his decision to order the destruction of the Enron documents. The e-mail, sent to Andersen senior partner Michael Odum, who heads the risk-management division in the firm's Houston office, was later forwarded to Mr. Duncan.
The e-mail said, "Mike, it might be useful to consider reminding the engagement team of our documentation and retention policy. It will be helpful to make sure that we have complied with the policy." It advised Mr. Odum to contact Mrs. Temple if he had any questions, including a link to the firm's policy on the Andersen internal Web site.
Andersen said in a statement that at the time Mrs. Temple sent her e-mail, work on accounting issues for Enron's third quarter was in progress. The firm said Mrs. Temple told Andersen officials it was this uncompleted work she was referring to and she never told the audit team they should destroy documents for past work already completed.
Yesterday, the accusations of shredding spread to Enron itself, with two reports claiming that document destruction occurred after the federal government began an investigation in October.
ABC News reported that after Thanksgiving, Enron shredded accounting documents at its Houston headquarters, according to Maureen Castaneda, a former Enron executive.
Also last night, the Associated Press reported accusations against Enron of shredding from a lawyer who is suing the company on behalf of its investors. William Lerach said the destruction occurred even "on Christmas Day." Mr. Lerach said he will produce shredded documents today in federal court, where he will demand judicial seizure of all relevant Enron documents.
Enron attorney Robert Bennett said in a statement last night that the company is "investigating the circumstances of the reported destruction of documents." He said the company told all employees in October that "all relevant documents should be preserved," and that any violators "will be dealt with appropriately."

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