HOUSTON — The former Arthur Andersen LLP partner who admitted to illegally destroying Enron Corp.-related documents acknowledged Thursday that he preserved several potentially embarrassing records.

        David B. Duncan, who pleaded guilty to obstruction of justice charges April 9, told Andersen attorney Rusty Hardin in a second day of cross-examination at Andersen's obstruction trial that he made a point to keep records related to allegations brought in August by Enron vice president Sherron Watkins.

        “I believe I retained (documents) relevant to the Watkins allegation matter in a separate folder,” said Mr. Duncan, who then was presented with a stack of papers he identified as being from his Watkins file.

        Among the documents was a memo from fellow Andersen partner James Hecker, who took a call from former co-worker Ms. Watkins in August. In the call, she relayed her worries about Enron's questionable accounting of so-called “Raptor” entities and rumors of secret side deals that might have jeopardized the veracity of Enron's previous financial statements.

        The Hecker memo, which detailed his phone conversation with Ms. Watkins, was titled “Smoking guns you can't extinguish.” Mr. Duncan dismissed the title as nothing more than his co-worker's sarcastic wit.

        Also in the stack were copies of Ms. Watkins' complaints, which she also shared with Enron chairman and chief executive Kenneth Lay. A review by law firm Vinson & Elkins concluded in October dismissed many of Ms. Watkins' concerns, although many of the issues became flashpoints as investors lost confidence in the energy trader and it skidded into bankruptcy in December.

        “You kept in your files, undestroyed, Sherron Watkins' allegations?” Mr. Hardin asked.

        After Mr. Duncan said he did, Mr. Hardin responded, “You must not have been worried about the (Securities and Exchange Commission) seeing it?”

        Prosecutors immediately objected to Mr. Hardin's comment, and their objection was sustained by U.S. District Judge Melinda Harmon, a sequence of events that has become routine when Mr. Hardin has the floor.

        Mr. Duncan, who has been on the stand since Monday, is cooperating with prosecutors to seek a light sentence for his own obstruction conviction. He has testified he did not think asking employees to destroy extraneous Enron documents after the SEC announced an inquiry last October was illegal, but this year came to realize it was.

        Andersen contends neither the firm nor Mr. Duncan broke any laws and that Mr. Duncan took the plea deal under threat of extensive prison time that essentially would leave his three young daughters fatherless.

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