- The Washington Times - Saturday, May 11, 2002

HOUSTON (AP) An Arthur Andersen LLP partner testified yesterday he didn't consider another partner's presentation of the accounting firm's document retention policy last October as an instruction to shred Enron-related documents.

Carl Bass is an Andersen partner whose criticism of Enron's accounting prompted Enron officials to push to get him barred from consulting with Enron auditors earlier last year. He said another Andersen partner on the energy trader's team, Mike Odom, discussed the policy during an Oct. 10 continuing-education meeting for Andersen workers.

That was two days before in-house Andersen lawyer Nancy Temple sent Mr. Odom an e-mail from the firm's Chicago headquarters reminding workers of the policy.

"He did talk about e-mails and stuff like that, but I don't recall the entire presentation," Mr. Bass said.

In addition, Mr. Bass said no one ever suggested he get rid of e-mail and other documentation of his disapproval of some accounting approaches that fueled Enron's descent into bankruptcy last year.

The firm is on trial for obstruction of justice in shredding documents and deleting computer records related to Enron audits in October and November as the Securities and Exchange Commission investigated the energy company's finances.

Outside the jury's presence yesterday, tension between prosecutors and defense attorneys erupted over questions and comments made within the jury's earshot.

Assistant U.S. Attorney Sam Buell complained in a bench conference that Andersen attorney Rusty Hardin repeatedly has tried to inject support of the firm's defense in his questioning of witnesses. Andersen is claiming no one intentionally destroyed Enron-related documents to keep them out of the hands of the SEC last year.

Mr. Buell said prosecutors were tired of "getting up all the time" to object to Mr. Hardin's questions.

Mr. Hardin retorted that prosecutors "were like little jumping beans" and he had "never seen lawyers whine like [Mr. Buell] just did at the bench."

U.S. District Judge Melinda Harmon admonished both and told Mr. Hardin to adjust his questioning.

Also yesterday, Judge Harmon refused Mr. Hardin's request that attorneys for David Duncan turn over their notes of his meetings with prosecutors before he pleaded guilty April 9 to directing shredding. Duncan was Andersen's lead auditor for Enron until he was fired Jan. 15.

Duncan is expected to testify early next week.

So far in the trial, completing its first week yesterday, two witnesses either invoked or announced plans to invoke their Fifth Amendment right against self-incrimination.

Kate Agnew, a former Andersen manager on Enron's account, invoked the right during a bench conference outside the presence of the jury Thursday.

During the same conference, prosecutor Andrew Weissmann told Judge Harmon that Miss Temple would invoke the same right by mail. In January, Miss Temple told Congress: "I never counseled any shredding or destruction of documents. I only wish that someone would have raised the question." The Department of Justice since has told her she is a target in their investigation.

Andersen could face probation for five years and a fine of up to $500,000 if convicted. It also could be fined up to twice any gains or damages the court determines were caused by the firm's action and would be barred from auditing publicly traded companies, likely putting the firm out of business.


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