Andersen partner admitted shredding might be a crime

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The Independent Online

David Duncan, the Andersen partner in charge of the firm's fateful Enron account, admitted yesterday he told his family in March he might have committed a crime by shredding Enron-related documents – even as he was maintaining to US government investigators he did nothing wrong.

Under cross examination from defence lawyers at Andersen's trial, on obstruction of justice charges, in Houston, Mr Duncan said the shredding began on 23 October and continued until 8 November, when Andersen received a subpoena from the Securities and Exchange Commission.

His line with prosecutors until late March was that the destruction of documents before 8 November was acceptable, and in compliance with Andersen's own document retention policy, which required that only permanent working papers on a particular account should be kept.

But he said yesterday: "Right about that time [mid-March], I was discussing the fact that I might have committed a crime with my family." On 9 April, Mr Duncan struck a deal with prosecutors to plead guilty to obstructing justice, and to testify against Andersen in court.

The suggestion he was already privately talking about criminal conduct is part of the defence's attempt to portray Mr Duncan as the prime mover in the document destruction, and as someone who changed his story to avoid a possible jail sentence of up to 10 years.

Mr Duncan, 43, who was sacked by Andersen in January, has testified he saw colleagues "cleaning out" Enron-related documents. The shredding began after a meeting on 23 October, as Enron's mounting difficulties had become public.

Mr Duncan said he gave Andersen staff "a coded instruction" to destroy potentially incriminating documents. This followed a 12 October e-mail from Nancy Temple, an Andersen lawyer, reminding them of the firm's document retention policy.

Prosecutors maintain this was athinly coded message to get rid of material pertaining to Enron, which brought in $58m in fees for Andersen in fiscal 2000.