- The Washington Times - Friday, January 25, 2002

Arthur Andersen & Co.'s chief auditor, fired last week over the destruction of Enron Corp.-related documents, refused yesterday to testify without a grant of immunity to a House subcommittee investigating Enron's financial collapse.

Called before a packed hearing room as the first witness by the House Energy and Commerce subcommittee on oversight and investigations in what promised to be a lengthy probe, David B. Duncan claimed his Fifth Amendment right against self-incrimination and was dismissed.

"I would like to answer the committee's questions, but on the advice of my counsel, I respectfully decline to answer the question based on the protection afforded me under the Constitution of the United States," Mr. Duncan told the subcommittee's chairman, Rep. James C. Greenwood, Pennsylvania Republican.

Mr. Duncan's refusal to answer questions came shortly before senior Andersen executives, who also had been subpoenaed to testify before the subcommittee, sought to blame Mr. Duncan solely for the shredding of thousands of Enron-related e-mails and paper financial records a move met with skepticism by panel members.

The document destruction began after Andersen learned the Securities and Exchange Commission had begun an investigation into Enron's failure.

"Enron robbed the bank, Arthur Andersen provided the getaway car and they say you were at the wheel," Mr. Greenwood told Mr. Duncan in trying to elicit answers.

"Did you give an order to destroy documents in an attempt to subvert governmental investigations into Enron's financial collapse? And, if so, did you do so at the direction or suggestion of anyone at Andersen or at Enron?" Mr. Greenwood asked.

Mr. Duncan refused to answer the question and, after another attempt to ask a separate question, Mr. Greenwood told the former chief auditor, "I am disappointed to hear that. … We thank you for your attendance today and your respect for this committee's process. You are dismissed, and perhaps we will see you on another occasion."

The subcommittee's ranking Democrat, Rep. Peter Deutsch of Florida, said the panel could grant immunity to Mr. Duncan, but chose not to do so because of the pending SEC probe and a criminal investigation of Enron and Andersen by the Justice Department.

One of Andersen's top executives, Dorsey Baskin Jr., managing director of the firm's professional standards group, called the destruction of the records a "tragedy." He said the company was "determined to get to the bottom of what happened."

But Mr. Baskin said it was clear Mr. Duncan organized an "expedited effort to shred or otherwise dispose of Enron-related documents." Mr. Baskin said the shredding took place without the knowledge of company executives and that over the course of several days, "a very substantial volume of documents and e-mails" had been destroyed.

He said the destruction of the records stopped shortly after Mr. Duncan's assistant sent a Nov. 9 e-mail to other secretaries saying "no more shredding." This occurred the day after Andersen received a subpoena from the SEC concerning the agency's investigation of Enron.

"Mr. Duncan's actions reflected a failure of judgment that is simply unacceptable in a person who has major responsibilities at our firm," Mr. Baskin said. "Yet our investigation indicated he directed the purposeful destruction of a very substantial volume of documents just as the government investigation was beginning."

Mr. Duncan's attorney, Robert J. Giuffra Jr., has said his client was following orders from Andersen executives when he began the document destruction. During four hours of questioning by subcommittee lawyers last week, Mr. Duncan said Andersen's legal team sent an e-mail reminding him of the firm's policies on the destruction of accounting records from which he took his cue to shred the records.

Andersen attorney Nancy Temple, also called to testify, wrote the Oct. 12 e-mail, which explained the firm's "documentation and retention policy." Mr. Duncan said he had never before received such an advisory. Mrs. Temple denied the e-mail was a suggestion to begin the destruction of any Enron-related documents.

After five hours of testimony, panel members said they might have to invite the Andersen executives for a return engagement.

"We may have to have you back. At the end of the day here we still don't have evidence to suggest that Mr. Duncan, who did not testify, is a rogue employee of Anderson. We have a lot of information we need to gather," Mr. Greenwood said.

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