Witness Says Shredding Volume High
The Arthur Andersen accountants auditing Enron Corp.’s books sent as many as 20 trunks of documents to be shredded during a three-day span in October, Andersen’s office librarian testified Thursday.
The volume of paper appeared unusual for such a brief time frame, said Sharon Thibaut, a 29-year company employee who ran the firm’s Houston records room. Thibaut, taking the witness stand in Andersen’s obstruction of justice trial, said she hadn’t received much data from the firm’s Enron team during the prior 10 months.
In examining the contents of the footlocker-like trunks, which weigh about 100 pounds when full, Thibaut said she didn’t see audit work papers, which are required to be saved under Andersen’s document retention policy.
Under cross-examination from Andersen attorney Rusty Hardin, Thibaut said the volume sent for destruction equaled about half a box for each member of the Enron audit team, which she said was “not an excessive amount.”
Andersen is accused of destroying files to impede a Securities and Exchange Commission inquiry of the energy giant’s finances. Hardin said outside the courtroom that Thibaut’s testimony bolsters his contention that the amount of files destroyed was inconsequential.
Thibaut took the stand amid continued tension in the courtroom. Prosecutors repeatedly objected to Hardin’s remarks, and at one point asked for a bench conference to complain privately to the judge that the Andersen lawyer was trying to paint them as “obstructionists.” Assistant U.S. Atty. Samuel Buell told reporters that he was “a little tired of Mr. Hardin’s speeches.”
Hardin said outside the courthouse that he had “never met such a bunch of whiners in my life.”
Hardin also clashed with prosecutors outside the jurors’ presence over the jury instructions to be given by U.S. District Judge Melinda Harmon. Prosecutors asked Harmon to remind jurors that three Andersen executives cited their right against self-incrimination and refused to testify.
If that request is granted, Hardin said, he would try to show in court that the three invoked their rights only after being threatened by prosecutors.
Harmon has called a special conference Saturday to hear the two sides debate the jury instructions. Part of the dispute focuses on whether jurors can ascribe the actions of David B. Duncan, formerly Andersen’s lead Enron auditor, to the entire firm. Duncan has pleaded guilty to obstruction of justice and is cooperating with federal investigators.
Duncan has testified that he told subordinates Oct. 23 to comply with Andersen’s document policy, which calls for auditors to keep only the records needed to back up their accounting judgments and to destroy drafts, duplicates and other files deemed extraneous.
Early Thursday, the chief of Andersen’s fraud investigation team testified that Duncan didn’t tell him that he had initiated the destruction effort. David Stulb, who visited Duncan’s office Oct. 31, said “it would have been nice to know” about the shredding effort. Stulb said he didn’t learn of the destruction until January, when Andersen publicly disclosed it.
Stulb testified earlier that he stopped Duncan from throwing away the cover sheet of a memo summarizing an Enron vice president’s allegations of accounting fraud at the energy conglomerate.
Stulb said Thursday that he left the encounter thinking Duncan was naive, adding that he had told Andersen officials John Geron and Nancy Temple that Duncan “needed guidance” on document retention. But under cross-examination, Stulb testified that he didn’t tell either of them about the incident in which Duncan appeared ready to toss out the cover sheet.
Also Thursday, Texas’ accountancy board filed a notice to revoke Andersen’s accounting license in the state.
