Congress scornful of Enron accountants

In the first committee hearing on the Enron scandal on Capitol Hill yesterday, Congress members poured scorn on witnesses from accountants Arthur Andersen as they tried to parry questions on document shredding.

The withering tone of the proceedings was set at the start by Congressman Jim Greenwood, when he snapped at fired Andersen auditor, David Duncan: "Enron robbed the bank, Arthur Andersen provided the getaway car and they say you were at the wheel."

Mr Duncan, stony-faced and dressed in dark suit and tie, refused to respond when Mr Greenwood proceeded to ask him if, as lead Andersen partner on the Enron account, he had deliberately given an order to destroy documents to "subvert governmental investigations".

Instead, Mr Duncan invoked his Fifth Amendment right to remain silent, saying: "Respectfully, that will be my response to all your questions." He was dismissed, leaving three very uncomfortable Andersen witnesses to try to pin the blame on Mr Duncan for the document destruction.

However, they were excoriated by panel members over the failure by Andersen to instruct employees to stop shredding documents between October 22rd, when a Security and Exchange Commission investigation was launched into the now-bankrupt energy trader, and November 9th when subpoenas were issued.

Before the hearing by the House Energy and Commerce's investigations and oversight subcommittee, Mr Greenwood said that 80 Andersen employees worked overtime to destroy documents related to Enron during this period.

Some of the most withering questions came from Republican Representative Billy Tauzin, subcommittee chairman, aimed at Andersen attorney, Ms Nancy Temple, who denied repeatedly that an October 12th e-mail she wrote helped trigger the wave of document destruction.

Mr Tauzin demanded to know why she waited until November 9th to issue a specific instruction to stop shredding. "The issue was not raised," Ms Temple said.

When Andersen global managing partner Mr C E Andrews interrupted to say that the responsibility was with the the "engagement partner" (Mr Duncan), Mr Tauzin asked incredulously how such a decision was left to an accountant and not a lawyer.

Mr Andrews said Mr Duncan organised the destruction of Enron-related documents without any consultation with others in the firm. It was "totally inappropriate", he said. "We do not condone that."

At the end of the five-hour hearing, Mr Greenwood said they still did not have evidence to suggest that Mr Duncan was a "rogue employee" of Andersen.

Mr Duncan, who was fired last week, has claimed to investigators that he was following company guidance on document destruction laid out in the October e-mail from Ms Temple. Andersen manager, Mr Michael Odom, has also said he viewed the Temple memo as unusual. In another October 24th memo from a manager, employees were told the document shredding was so important that it should be pursued even "on an overtime basis, if necessary for the remainder of this week or for however long it takes".

Some 11 Congressional panels are investigating aspects of the collapse of Enron, the biggest bankruptcy in US history, and the failure of Andersen to expose devices used by Enron to hide huge losses.

Mr Kenneth Lay resigned as chairman and chief executive of Enron on Wednesday after a court-appointed creditors' committee asked for his dismissal.

At a Senate Governmental Affairs committee, former SEC chairman Arthur Levitt, said "It's well past time to recognise that the accounting profession's independence has been compromised."