May 31, 2002 By Mark Babineck Associated Press Writer 3 min read

HOUSTON (AP) – An Arthur Andersen LLP auditor who did not work on the Enron Corp. account testified Thursday she consistently complied with the firm’s document retention policy, which calls for destruction of extraneous paperwork and e-mails. Emily Madison, who left foundering Andersen last Friday to begin a job this week as partner with rival Ernst & Young, said she consulted a superior at the firm’s Houston office last fall about what to do with documents from the account of a company that had switched auditors during the summer.

“Our policy is … we have no need to retain anything else” besides important audit-related documents, senior partner Michael Odom replied in an e-mail.

Prosecutors contend Odom later encouraged Andersen workers to destroy documents by stressing the retention policy.

Madison did not name the company in question, but acknowledged under cross-examination the other company was not having the problems Enron was experiencing in late October and early November, when auditors on the energy trader’s account were purging documents and e-mails.

“Was there any litigation or Securities and Exchange Commission investigation related to that other client?” Assistant U.S. Attorney Andrew Weissmann asked.

Madison answered, “There was none.” The Justice Department argues Andersen’s in-house promotion of the document retention policy around the time Enron was sinking under a flood of accounting problems was too much of a coincidence. Andersen counters its employees were trying to properly organize audit-related materials and discard things extraneous to the account that had piled up over time.

Unlike several other current and former Andersen employees who have testified to little or no knowledge of the document retention policy before last October, Madison said she was a stickler on keeping up with paperwork and routinely purged extraneous material.

Lead defense attorney Rusty Hardin hoped to complete his case by Friday, although that was in doubt after U.S. District Judge Melinda Harmon took an unexpected 11/2-hour break Thursday morning. Harmon, who had been scheduled to leave on a European vacation Wednesday, reported her diabetic son was lost in the Rome airport for three hours until he was found safe. Prosecutors planned a short rebuttal case early next week, followed by closing arguments and jury deliberations.

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.