Andersen lawyer tries to show damaging Enron documents wer retained
HOUSTON (AP) – Arthur Andersen LLP’s lawyer tried to show Wednesday the same voluminous e-mails and documents being used to prosecute the accounting firm for obstruction of justice were preserved when alleged mass shredding took place last year. “Is this a document produced in discovery by Arthur Andersen?” firm attorney Rusty Hardin asked after displaying the prosecution’s barrage of potentially damaging documents, noting they were kept and turned over to the Department of Justice as both sides prepared for trial.
“Yes,” FBI Agent Barbara Sullivan, who introduced the documents for the government, repeatedly answered.
U.S. District Judge Melinda Harmon already had prohibited Hardin from asking Sullivan to interpret e-mails, memos or notes.
On Wednesday, Harmon narrowed the scope as Hardin tried to demonstrate that damaging draft memos and e-mails being used by the prosecution against the firm were retained as other documents were destroyed.
Andersen is charged with obstruction for destroying Enron-related documents and computer records as a Securities and Exchange Commission probe loomed.
Prosecutors say the sudden promotion of Andersen’s document retention policy in October was an implicit effort to destroy documents in light of the SEC’s probe. Andersen says it wanted to organize files and much excess material already should have been destroyed.
Documents Hardin asked Sullivan to identify included:
– An Aug. 23 memo from an Andersen partner regarding an Enron vice president’s concerns about Enron accounting labeled: “Smoking guns that you can’t extinguish.”
– Various memos regarding financial vehicles run by Enron’s former chief financial officer credited with helping fuel the company’s failure.
– Memos and e-mails regarding disputes between Enron audit team members and in-house Andersen consultants about how those vehicles should be treated on balance sheets. Harmon repeatedly sustained prosecution objections when Hardin asked if documents used by the government as evidence were retained by Andersen. After repeated bench conferences out of the jury’s earshot, he no longer identified some documents in evidence as “drafts,” instead asking if they were handed over to prosecutors as each side prepared for trial.
She also rebuffed one of Assistant U.S. Attorney Sam Buell’s requests for another bench conference, saying, “Let’s keep going.”
On March 20, Harmon told attorneys she wanted a verdict in the case by May 29, when she had nonrefundable airline tickets for a long-planned vacation.
During jury selection May 6 she said she wouldn’t take her vacation if the case wasn’t finished. Tuesday she told jurors court would be in session on Memorial Day to begin a fourth week of the trial. Also Wednesday, she scheduled a hearing outside the jury’s presence for Saturday.
Sullivan testified earlier in the day it was “misleading” for Hardin to suggest former lead Enron auditor David Duncan didn’t consult with superiors before advising his staff Oct. 23 to comply with the firm’s document retention policy.
“That interprets to read that out of the blue, without ever hearing anything about the policy, Dave Duncan all of a sudden decides to bring it up,” Sullivan said.
Duncan had received a copy of an e-mail by in-house Andersen lawyer Nancy Temple on Oct. 12 that said it “might be helpful” to remind the Enron team of the policy. That policy also was among several items discussed by Andersen partners in Houston and its Chicago headquarters Oct. 20.