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Fired Auditor of Enron Refuses to Testify - 2002-01-24

The fired auditor of the bankrupt Enron Corporation has refused to testify before Congress, invoking his constitutionally-protected right not to incriminate himself. David Duncan appeared before a House subcommittee investigating the shredding of the energy trading company's documents.

Mr. Duncan was fired by the Arthur Andersen auditing firm earlier this month for his role in the destruction of Enron documents as a government probe into the company's collapse was beginning.

Appearing before a House Energy and Commerce subcommittee, Mr. Duncan invoked his Fifth Amendment protection when Chairman James Greenwood, a Republican from Pennsylvania, asked him a single question. "Did you give an order to destroy documents in an attempt to subvert government investigations into Enron's financial collapse, and if so, did you do so at the direction at the suggestion anyone at Andersen or at Enron?" asked James Greenwood.

"Mr. Chairman, I would like to answer the committee's question, but on the advice of my counsel, I respectfully decline to answer the question based on the protection afforded me under the Constitution of the United States," responded David Duncan.

But Andersen representatives who testified did not hesitate to blame Mr. Duncan for the document destruction. Dorsey Baskin, managing director of Andersen's professional standards group, said, "Our investigation indicated that he directed the purposeful destruction of a very substantial volume of documents just as the government investigation was beginning. This is the kind of conduct that Andersen cannot tolerate."

Mr. Duncan previously told investigators that he destroyed documents according to company guidance that was spelled out in an electronic mail note from Andersen attorney Nancy Temple last October.

But Ms. Temple testified to the subcommittee that she never counseled any shredding or destruction of documents.

Lawmakers want to know why Enron failed to report hundreds of millions of dollars in losses to stockholders and employees. Many investors lost their life savings.

The House subcommittee is one of nearly a dozen Congressional committees that are investigating Enron's financial dealings, along with the U.S. Justice and Labor Departments and the Securities and Exchange Commission.

Enron, once the seventh largest corporation in the United States, filed for bankruptcy last month. The company's chairman, Kenneth Lay, resigned Wednesday.