- The Washington Times - Wednesday, January 23, 2002

A House subcommittee investigating Enron Corp.'s financial collapse will issue subpoenas today for top executives at Arthur Andersen & Co., Enron's former accounting firm, to testify tomorrow on the shredding of Enron-related documents.
The subpoenas will target Joseph Berardino, Andersen's chief executive officer; Nancy Temple, a company lawyer; Michael Odom, a risk-management partner; and David B. Duncan, chief auditor who was fired after being blamed by the Chicago-based accounting firm for the document destruction.
Ken Johnson, spokesman for the Energy and Commerce subcommittee on oversight and investigations, said Mr. Berardino and Mr. Duncan will be subpoenaed as "reluctant witnesses" because of their refusals to respond to invitations to appear.
"Mr. Berardino was willing to testify but wanted a week or two to prepare. He found time to tell his story on 'Meet the Press.' He can find time to talk to Congress," said Mr. Johnson, adding that Mr. Duncan, questioned last week for more than four hours by committee lawyers, is expected to plead the Fifth Amendment.
Mr. Duncan called an "urgent meeting" on Oct. 23 to organize the destruction of Enron-related records. His attorney, Robert J. Giuffra Jr., has said his client was only following orders from Andersen lawyers when he began the document destruction. Andersen has denied the accusation.
The subpoenas are expected to be signed today by committee Chairman Billy Tauzin, Louisiana Republican, and Rep. James C. Greenwood, Pennsylvania Republican, who heads the subcommittee.
Meanwhile, FBI agents and federal prosecutors probing Enron's December failure swarmed into the firm's Houston headquarters yesterday amid accusations that thousands of Enron records also had been destroyed by company executives.
Enron, which filed for bankruptcy protection Dec. 2 in the largest corporate filing in U.S. history, confirmed that "Department of Justice and FBI personnel are on site conducting an investigation of the allegations raised."
During a court hearing, Enron lawyers said security guards had been posted inside the firm's headquarters building to prevent any further shredding of documents.
Attorneys for several current and former Enron employees and investors, who said company records were destroyed after a Securities and Exchange Commission probe of the firm began, also went to federal court yesterday seeking an order protecting Enron documents.
"It was a major accounting fraud, and now they have been caught destroying the evidence," said one of the attorneys, William Lerach, who added it might be necessary to station U.S. marshals at Enron.
In Houston, U.S. District Judge Melinda Harmon yesterday gave the attorneys until today to come up with a single motion concerning the shredding accusations. The motion would be a part of several pending lawsuits against Enron.
The Justice Department began a criminal investigation of Enron Jan. 9 to determine if company executives illegally blocked employees from selling billions of dollars in plummeting shares from their retirement accounts.
The probe also has focused on accusations that executives cashed out their stock while hiding massive losses from investors.
In addition to the SEC probe, the firm also is being investigated by the Labor Department and at least nine congressional committees.
Enron spokesman Mark Palmer said the firm was cooperating in the federal probe, saying that as soon as accusations surfaced concerning shredded records, Enron immediately preserved "the integrity of the site."
He said Enron offered "full cooperation" in the investigation "and we believe such an investigation is properly done by federal authorities, not plaintiffs' counsel for benefit of a lawsuit."
Enron's Washington attorney, Robert S. Bennett, said the firm told its employees in four e-mails between Oct. 25 and Jan. 14 they were not to destroy any relevant documents. He said Enron also has ordered an investigation to determine if anyone violated that directive.
Several former Enron employees have accused executives at the firm of destroying "hundreds of thousands of documents" in a shredding party that was "open and notorious and widespread." They said the document destruction began after Thanksgiving and continued through Christmas.

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