Andersen jurors told to ‘pack a bag’ as trial heads into closing arguments
HOUSTON (AP) – Arthur Andersen LLP shirked its duty to alert investors to shady accounting when auditors destroyed Enron-related documents at the start of a regulatory probe of the energy company, a federal prosecutor said Wednesday. “Auditors are on the hook legally when it turns out the client’s finances turn out to be wildly misstated on their watch,” Assistant U.S. Attorney Sam Buell said in closing arguments in the fifth week of the auditing firm’s obstruction of justice trial.
“If you know the (Securities and Exchange Commission) is coming, you can’t destroy evidence,” Buell said.
Andersen is charged with shredding documents and deleting e-mails related to Enron’s audits as the Securities and Exchange Commission began probing the energy company’s accounting practices.
He said Andersen knew Enron employed risky accounting methods but decided to stick with its client, which generated $52 million in revenue in 2000.
Buell also said Andersen officials thought they had a “window of opportunity” to destroy documents since the SEC didn’t subpoena them until Nov. 9. He said top officials knew the SEC was examining Enron’s finances in late October, when shredding began in earnest.
The sides were given four hours each for final arguments before jurors were to begin deliberations.
U.S. District Judge Melinda Harmon advised jurors to “pack a bag” and prepare to stay in downtown Houston overnight Wednesday. She didn’t indicate whether the jury would be sequestered until a verdict is reached.
Also on Tuesday, Harmon made final changes to a 15-page instruction that she will read to jurors.
Harmon handed prosecutors a victory when she included in the instructions that jurors can consider Andersen’s previous run-ins with the SEC.
The instructions also call for the jury to be told that three witnesses who declined to testify were unavailable. Prosecutors had wanted the panelists to be told the witnesses “refused” to testify.
If convicted, Andersen faces fines and would be barred from auditing public companies. More than 650 of its 2,300 clients already have fired the firm, most since the indictment was unsealed March 14.
Andersen said employees shredded documents to comply with a long-standing company policy of eliminating unnecessary and outdated materials.