Keeping it gully....
Enron is no joke....
The political implications alone are enough
to inspire the average joe to suspect foul
play here.
In other Enron news:
Thrown Over The Side, Enron's Auditor, David Duncan, Pleads Fifth Amendment While His Former Bosses Blame Shredding On Him
01/25/2002
By PETE YOST / Associated Press
WASHINGTON (AP) -- Scandals usually have scapegoats, and so far the Enron Corp. investigation has David Duncan, who took the Fifth Amendment in front of Congress.
The fired auditor from the Andersen accounting firm is perfect for the role.
Thrown to the wolves for destroying documents, Duncan worked 900 miles away from his superiors in Chicago, who all insist they had no idea what Duncan was doing.
But incredulous members of Congress refused to buy the firm's story.
Asked Friday whether Duncan seemed to be a rogue employee, Rep. John Dingell, the top Democrat on the House Commerce Committee, said "It's possible he was, it's possible he wasn't."
Dingell said on CBS's "The Early Show" that "the people who have the biggest problem" are Andersen officials who have been blaming Duncan.
"But I'm not about to absolve anybody here," he said. "I'm just disposed to say that we have considerable rascality. We have to find out who is at fault for what."
On Thursday, Republicans and Democrats on Commerce's oversight and investigations subcommittee kept touching on one question: Did Andersen executives look the other way while Duncan and dozens of employees cleaned out the Enron files in Houston?
"Why in God's name didn't ... the top brass at Andersen immediately send out word to everyone ... in the Enron case ... to not touch a document, not shred a document?" asked Rep. Jim Greenwood, the panel's chairman.
"The responsibility for that rests with the engagement partner," who was Duncan, replied Andersen executive C.E. Andrews.
"And all of Mr. Duncan's superiors in the company ... knowing this meltdown is happening at Enron, knowing that this SEC (Securities and Exchange Commission) investigation is on, sat silently, just assuming that Mr. Duncan would do the right thing?" asked Greenwood. "They gave him no direction whatsoever?"
"Mr. Duncan had been advised of our policies," Andrews replied.
The congressmen zeroed in on the week of Oct. 8, eliciting a new disclosure from Andersen.
The week started with Andersen hiring the prominent Wall Street law firm of Davis Polk " Wardwell to prepare for possible lawsuits arising from Enron's then-secret accounting and financial problems. Three days later, Andersen's Chicago headquarters sent Houston the firm's document destruction policy which permits discarding of a wide range of materials. It wasn't for another month -- after Andersen got a subpoena from the SEC -- that Chicago headquarters ordered Houston "to preserve all ... documents ... that we may have relating to the claims that are being filed" against the firm.
The SEC began an inquiry of Enron on Oct. 17, the day after the energy trading company announced $600 million in third-quarter losses.
It was Chicago headquarters attorney Nancy Temple who on Oct. 12 sent the document destruction policy to Houston. Under questioning, Temple said she had learned just days earlier the potentially explosive information that an Enron employee, Sherron Watkins, had made allegations about accounting practices the previous August.
"I never counseled any destruction or shredding of documents," Temple testified on Thursday. "And I only wish that someone" in Houston "had raised the question so that we could have consulted and addressed the situation."
Temple was quick to play down the significance of the Watkins allegations, noting that the law firm that reviewed them said Enron "did not need to take any further action."
For his part, Andrews minimized the lawsuit angle in the hiring the Wall Street law firm, Davis Polk.
"We engaged them to help us with ... financial reporting issues and possible litigation. And within the accounting literature, if you will, the term 'possible' is used frequently but does not mean probable," said Andrews. "And we had no reason at that particular point in time to expect litigation, no."
At Davis Polk in New York, attorney Daniel Kolb who is fielding questions about the firm's representation of Andersen declined to comment. Kolb's legal specialties are securities litigation and professional liability.
The congressional jury is still out on whether Duncan was thrown over the side by higher-ups who knew what was going on.
"I still haven't made up my mind on whether Mr. Duncan was a rogue employee or whether Mr. Duncan was set up as a scapegoat," Greenwood said.
In the Iran-Contra scandal, the Reagan administration clung to the notion that Marine Lt. Col. Oliver North was a rogue operator, a National Security Council aide secretly running an arms supply network unknown to the president and his Cabinet. Not unlike Duncan, North initially took the Fifth Amendment before Congress, then after being given a limited grant of immunity from prosecution said his superiors had approved everything he'd done.
In an interview last week with congressional investigators, Duncan put the blame where he feels it belongs: at company headquarters.
(Copyright 2002 by The Associated Press. All Rights Reserved.)
