Federal agents opened an investigation Tuesday into the destruction of documents at Enron Corp. headquarters in Houston after company officials found a wastebasket full of shredded material in the company's 19th-floor accounting offices.
The action came as congressional investigators in Washington, D.C., said they will subpoena the chief executive and other executives with Andersen LLP, the Enron auditor that previously acknowledged shredding documents.
Enron officials disclosed Tuesday that they notified the Justice Department after finding the shredded material late Monday. The company searched the accounting offices after a former executive told news organizations she witnessed shredding as recently as the second week in January.
"There will be an extensive investigation done under the auspices of the Justice Department," said Ken Marks, an attorney representing the company. He said there may be "completely innocent" explanations.
The Justice Department and FBI declined comment. Bush administration officials, however, said they understood that FBI agents in Houston had gone to Enron headquarters.
Both congressional investigators and the Securities and Exchange Commission said Tuesday that they would widen their probes into the Enron collapse to review the allegations of document shredding.
"We are including the most recent document-destruction issue within the scope of our investigation," Stephen Cutler, SEC enforcement chief, said at a news conference in Washington.
Rep. Jim Greenwood, R-Pa., who chairs the House subcommittee on oversight and investigations, said his panel plans to examine the shredding. He said it also will subpoena Andersen Chief Executive Joseph Berardino and fired partner David B. Duncan, who supervised the Enron audit out of the Houston office.
The subpoenas signal a tougher stance by congressional investigators looking into the collapse of Enron, ranked in the Fortune 500 as the seventh largest U.S. company last year.
"We want to know what documents were destroyed and who destroyed them," Greenwood said, referring to the Andersen documents.
A committee spokesman said that a subpoena was necessary because Duncan has indicated through his attorney that "in all likelihood," he would invoke his Fifth Amendment right against self-incrimination.
"We believe that he has important information," said committee spokesman Ken Johnson. "We are going to continue to insist on his appearance. Certainly, he provided some detailed information to our investigators last week, and we would like him to repeat his story under oath."
Duncan's attorney, Robert Giuffra, said Tuesday night that he had not received a subpoena from the committee and had made no final decisions about Duncan's testimony.
Greenwood said the committee would frown on Duncan's refusal to answer questions under oath. The Pennsylvania lawmaker said Duncan's attorney requested, but did not receive, immunity for his client in exchange for testimony.
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