HOUSTON — A former Arthur Andersen LLP partner said Tuesday he implicitly encouraged his staff to shred Enron-related documents because he believed lawsuits were likely and that the Securities and Exchange Commission planned an investigation.

        David B. Duncan, who was Andersen's chief auditor on the energy trader's account, also testified he huddled with superiors after an Enron vice president related worries over some complicated transactions, but that the firm eventually accepted the word of Enron lawyers that everything appeared proper.

        Mr. Duncan spent a second day on the stand in Andersen's obstruction of justice trial. The accounting firm is accused of destroying documents in advance of a possible SEC probe into Enron. Mr. Duncan pleaded guilty to the same charge April 9 and is cooperating with the government in exchange for mercy.

        Mr. Duncan said he did not explicitly order the mass shredding and deleting that was carried out by the company's audit team, but rather he gave a reminder about Andersen's document retention policy last Oct. 23.

        “I told them to not do anything more or less than follow the policy,” said Mr. Duncan.

        Mr. Duncan and others testified they thought document destruction had to stop only upon receipt of a subpoena, which the SEC issued Nov. 9.

        With respect to Enron's questionable transactions, Mr. Duncan testified he was included on a conference call in late August 2001, shortly after Enron vice president Sherron Watkins confided to a friend at Andersen — where she once worked — about accounting problems on major transactions.

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