Archive for Tuesday, February 19, 2002

Andersen internal probe close to complete for Enron

February 19, 2002


— Faced with speculation about a promised internal report into how its employees went about destroying documents relating to client Enron Corp., accounting giant Andersen and its law firm were hurriedly putting the finishing touches to their investigation Monday.

Sources close to Andersen said final conclusions were being "penciled in" and details of the internal review prepared by legal advisor Davis Polk & Wardwell could emerge within the next few days. But the Chicago-based accountant also said the investigation still is not finished.

In a terse statement, Andersen said its probe will clear top executives in its Chicago head office of wrongdoing and contain the document destruction efforts to Andersen's Houston office responsible for auditing Enron, "should not be relied on as accurate."

If the investigation indeed concludes that Chicago executives were unaware of apparently orchestrated efforts to destroy documents relating to Enron, that finding would be in line with the accounting firm's previous statements about the shredding.

Andersen has repeatedly blamed David Duncan, the firm's chief auditor on the Enron account until Andersen moved to fire him last month.

Duncan invoked his Fifth Amendment right against self-incrimination and refused to answer questions when called before a House subcommittee last month.

His attorney has said he did nothing wrong.

Duncan's legal team has said that document shredding began only after an attorney in Andersen's Chicago headquarters sent memos to the Houston office, highlighting its document retention policy.

Three weeks ago, Andersen Chief Executive Joseph Berardino said the firm's internal review was in its "final stages" and would be aired publicly when complete.

"I'd say its just a matter of days before we know all the facts and we'll be very forthcoming," he said.

Commenting has been disabled for this item.