Andersen figure charged with obstruction of justice
WASHINGTON (AP) – A senior Arthur Andersen auditor was charged Tuesday with a single criminal obstruction charge, and has agreed to plead guilty to thwarting the government’s investigation into the collapse of Enron Corp., people familiar with the matter said Tuesday. The precise charge against David B. Duncan, who was fired in January shortly after Andersen acknowledged massive shredding of Enron documents, was outlined in court papers filed Tuesday in federal court in Houston. It said Duncan did “knowingly, intentionally and corruptly persuade and attempt to persuade other persons … to withhold records, documents and other objects from an official proceeding, namely an investigation by the Securities and Exchange Commission.”
Duncan was expected to appear later Tuesday in federal court in Houston, where the government filed the two-page criminal information.
The charge against Duncan said the shredding took place between Oct. 23 and Nov. 9.
Duncan also has agreed to cooperate with prosecutors pursuing obstruction charges against Andersen and in the broader investigation of the collapse of Enron, people familiar with the matter said, speaking on condition of anonymity.
Duncan’s attorney, Robert Giuffra, said late Monday that he had no comment on his client’s decision to plead guilty, which was initially reported by The Washington Post and The New York Times.
“As we have said from the outset, Mr. Duncan is continuing to cooperate with the government’s investigation of this matter,” Giuffra told The Associated Press.
A grand jury indicted Andersen on March 7 on a single count of obstructing justice, accusing the firm of destroying “tons of paper” at offices worldwide and deleting enormous numbers of computer files on its audits of Enron.
At times, the government said, the shredding was so fast-paced that employees worked overtime and shredding machines couldn’t keep pace.
The indictment was unsealed March 14, and Andersen has pleaded innocent.
Court documents also have disclosed that a second grand jury was empaneled March 27 in Houston to investigate the collapse of Enron. The court papers said the grand jury “is proceeding with appropriate investigative steps.”
The accounting industry has been under scrutiny since Enron’s bankruptcy on Dec. 2, the largest corporate failure in U.S. history, and several legislative proposals have been circulated in Congress. The Securities and Exchange Commission is pursuing a civil investigation of Enron and Andersen.
Duncan is believed to be the first person in the case to have struck a deal with prosecutors.
Lawyers for Andersen met Friday at the Justice Department to negotiate a settlement, but no deal was reached. It was unclear whether future settlement meetings were planned immediately.
The charge against Andersen is set for trial on May 6.