Enron accountants 'destroyed papers'

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The Independent US

The accounting firm Arthur Andersen last night admitted destroying audit documents relating to the collapse of the American energy giant Enron.

Less than a day after the Justice Department announced a criminal probe into America's biggest ever corporate failure, Andersen stunned the US political and financial community by saying that its employees had "disposed of or deleted" several documents relating to its audit work.

The documents, both paper and electronic, are said to have been destroyed over the summer and autumn, before Enron's swift slide into bankruptcy in December.

Enron was a major longtime backer of President George Bush and the Republican Party, and its failure is shaping up as the biggest potential scandal yet to threaten the Bush administration.

The Securities and Exchange Commission, the Wall Street watchdog, said the disappearance of the documents was an "extremely serious matter".