HOUSTON -- Former Andersen LLP partner David B. Duncan testified Monday that he knew he was breaking the law when he instructed employees to comply with the firm's document retention policy, which resulted in destruction of Enron Corp.-related materials.
Duncan, who pleaded guilty April 9 to obstruction of justice and agreed to testify against his former firm in exchange for leniency in sentencing, said he was aware Enron-related documents would be wiped out.
"I obstructed justice," Duncan said. "I instructed people on the (Enron audit) team to follow the document retention policy, which I knew would result in the destruction of documents."
Duncan took the stand in a Houston courtroom about 4:15 p.m. in the sixth day of the federal trial.
Andersen's attorney dismissed the impact of Duncan's testimony.
"I think it's going to be like a Super Bowl -- we have all this buildup and then it just flops," said Rusty Hardin, Andersen's attorney.
Like Duncan, Andersen is charged with obstruction of justice for destroying documents related to Enron, which began drawing the Security and Exchange Commission's interest in August and news mounted about inside partnerships, accounting irregularities and other problems that catapulted the Houston-based energy trader into bankruptcy on Dec. 2.
Attention eventually shifted to Enron's longtime auditor, Andersen, and the Houston-based audit team led by Duncan that reviewed its books.
Duncan initially met with the Justice Department Jan. 14 and was fired the next day. He agreed to plead guilty April 6, technically risking up to 10 years in prison time, and help prosecutors in their Enron/Andersen probe.
Duncan is considered the government's star witness and, in addition to testifying about document destruction, was expected to shed light on the complex accounting and maze of murky partnerships and special entities at Enron.
Earlier in the day, another Andersen employee, James Green, took the stand.
He testified that after receiving a company memo about the retention and destruction of documents, he deleted hundreds of e-mails relating to his involvement with Enron.
Green said that he continued to delete e-mails until he received a Nov. 12 subpoena to preserve the information.
He said that he was then "floored" to receive a company memo telling him that the e-mails should have been preserved.
Copyright 2007 by Click2Houston.com.
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