Accessibility links

Andersen Accountant Pleads Guilty to Obstructing Justice - 2002-04-09


The former Arthur Andersen accountant in charge of auditing failed energy company Enron is pleading guilty to obstructing justice. David Duncan was fired in January, after Andersen officials acknowledged some of their workers had destroyed Enron financial documents.

David Duncan's guilty plea said he knowingly persuaded co-workers and others to shred financial documents at Enron last October and November, just as the federal government was beginning its investigation into the energy company's collapse.

Enron's failure late last year resulted in the largest corporate bankruptcy in United States history. It also wiped out the retirement savings of thousands of Enron employees and other shareholders.

As part of the plea agreement, Mr. Duncan will cooperate with the Justice Department's investigation of the Enron collapse and the Andersen accounting firm's role in it.

Last month, the federal government indicted Andersen on a single charge of obstructing justice. It accuses the firm of destroying tons of paper and deleting large numbers of computer files pertaining to its Enron audits. The government has said at times the document shredding was so fast-paced that employees worked overtime and shredding machines could not keep pace.

Andersen officials fired Mr. Duncan in January and have characterized the document shredding as the work of a few rogue employees.

Since the indictment, Andersen has lost more than 140 of its corporate clients. Two weeks ago, its chief executive, Joseph Berardino, announced he would step down.

The former head of the U.S. central bank, Paul Volcker, has been brought in to try to save the company. He has proposed Andersen sell off or merge all of its non-auditing businesses, including its lucrative consulting unit.

Monday, Andersen announced it was cutting 7,000 jobs, one-fourth of its U.S. workforce. Many of those cuts are being made at the firm's Chicago headquarters.

The firm has been trying to negotiate a settlement of its obstruction of justice charge. A trial is scheduled to begin May 6.

XS
SM
MD
LG