HOUSTON — A former Securities and Exchange Commission investigator working at Arthur Andersen LLP should have anticipated an agency inquiry and made sure Enron-related documents were preserved, according to prosecutors trying to convict the firm of obstruction of justice.

        Andrew Weissmann, the New York-based assistant U.S. attorney in Houston to prosecute Andersen in the first criminal trial related to last year's flameout of the former Big Five accounting firm, prodded former SEC interim chief accountant John Riley about his role.

        Using a marker and an easel to spell it out for jurors beginning the fifth week of the trial Monday, Weissmann listed a barrage of suspicious and problematic issues that mounted in late October and early November, culminating in a Nov. 8 subpoena of Enron's auditor, Andersen.

        Weissmann quizzed Riley about the Oct. 23 conference call in which he was prepped to visit the Enron audit team the next day in Houston. Weissmann appeared baffled that Riley, who spent 11 years at the SEC, wasn't briefed about the letter of inquiry the regulator issued Enron the previous week.

        “Didn't anyone say, "John, this letter came in and we discussed it three days ago.'?” Weissmann asked rhetorically.

        Riley, the last witness to be called by Andersen in its defense, earlier told firm attorney Rusty Hardin — and later Weissmann — that despite mounting press reports questioning the integrity of Enron's books and further troubling revelations on the inside, he never had reason to expect an SEC subpoena in the days leading to its arrival.

        Prosecutors contend Andersen organized document destruction because it feared an SEC investigation, though employees have testified that was not the case. Riley, who left the SEC in 1995 as deputy chief accountant for the agency's corporation finance division, said even a second letter sent Oct. 30 by the SEC's enforcement division didn't ring alarm bells with him.

        “I had no reason that (an imminent subpoena of Andersen) would be the case at that time,” he said.

        Riley visited twice in late October to help the Enron audit team try to sort through the company's bookkeeping. On Oct. 26, three days after the SEC contends the order to destroy documents was issued in Houston, a mechanical sound caught Riley's attention.

        “I remarked: 'What's that noise? You guys have a shredder up here?” said Riley, an audit practice director based in San Diego. Lead Enron auditor David Duncan told him it was indeed the shredder, but it was chewing up only routine sensitive information, Riley said.

        “My response was to him: 'Well, this wouldn't be the best time in the world for you guys to be shredding a bunch of stuff.”' Riley testified. Duncan pleaded guilty April 9 to obstruction and testified against his former employer last month.

        During the questioning of Riley, Weissmann tipped the government's hand as to a possible subject of further courtroom action as the Justice Department's Enron Task Force keeps digging.

        In an aside, Weissmann mentioned how someone could construe as a crime the withholding of documents related to a partnership called Chewco, which auditors learned last autumn should not have been kept off Enron's books because of a secret side arrangement between parties.

        “That could be fraud,” Weissmann said.

        Prosecutors expected to present a short rebuttal case Tuesday before both sides made closing arguments and sent the case to the jury. Conviction could get Andersen probation for five years and up to $500,000 in fines. It also could be fined up to twice any gains or damages the court determined were caused by the firm's action and would be barred from auditing publicly traded companies.

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