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Saturday, May 18, 2002

Duncan: 'Destroy' was never said


Verbal clashes ensue in Enron document case

The Associated Press

        HOUSTON — Fired Arthur Andersen LLP auditor David B. Duncan mentioned his firm's document retention policy in a 30-minute “pep talk” to his Enron Corp. audit team in October, but didn't specify that they destroy documents as criticism of the energy company's murky finances began growing, he testified Friday.

        “We believed we had done everything appropriately and everyone should rest assured that would be handled,” he recalled telling his staff of about 100 people.

        Mr. Duncan, testifying at Andersen's obstruction of justice trial, said he didn't use the word “destroy” and didn't say specifically he was talking about the policy in regard to Enron documents.

        He also said he didn't destroy any documents immediately after the short Oct. 23 meeting because he had to prepare for an afternoon conference call with Andersen superiors.

        “I didn't want them to do anything more or less than comply with the policy, but I wanted them to work toward that end,” said Mr. Duncan, on the witness stand for a fifth day. “I was probably more focused on the notion of the fact of getting rid of extraneous information,” he said.

        Andersen attorney Rusty Hardin tried to ask if Mr. Duncan's team in October discussed what was then an informal Securities and Exchange Commission probe into Enron's finances, but U.S. District Judge Melinda Harmon sustained prosecutors' repeated objections.

        Andersen is accused of shredding documents and deleting computer records related to Enron audits to keep them out of the SEC's hands. Mr. Duncan pleaded guilty April 9 to directing the effort and destroying documents himself.

        Mr. Hardin and Mr. Harmon got into a shouting match late Thursday over evidence the defense wanted to present after jurors had been dismissed. Friday, the tension returned in the jury's presence.

        As Mr. Harmon sustained one in a string of objections, Mr. Hardin started to complain. The judge beckoned him and prosecutors to discuss the issue at the bench outside the jury's earshot.

        Mr. Hardin balked. “Nothing good ever happens up there,” he remarked before joining prosecutors in a whispered conversation unheard by jurors or spectators.

        The verbal clashes surfaced as Mr. Hardin tried to pin down Mr. Duncan on what he ordered. Mr. Duncan, 43, once a star accountant at Andersen until he was fired in January, maintained his innocence of intent to thwart the SEC until he forged a deal with prosecutors in early April.

        Denis McInerney, another Andersen lawyer, earlier Friday asked Mr. Harmon to review alleged inconsistencies between government summaries of what Mr. Duncan told FBI agents until he struck a deal.

        Mr. Duncan testified earlier this week he had found “fairly voluminous” errors in those summaries, including statements he hadn't made.

       



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