US Congress to Probe Destruction of Enron Documents

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Last updated at: (Beijing Time) Tuesday, January 22, 2002

US Congress to Probe Destruction of Enron Documents

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A U.S. House Panel is planning to issue subpoenas if necessary to compel testimony from Enron's accounting firm and the auditor it fired for the destruction of thousands of Enron documents, a panel spokesman said on Monday.

"We have made it clear that we'll be prepared to subpoena any reluctant witnesses," said Ken Johnson, spokesman of the House Energy and Commerce subcommittee on oversight and investigations. The panel has scheduled a hearing for Thursday.

Joseph Berardino, Chief Executive Officer of Enron's accounting firm Arthur Andersen, criticized his firm's lead auditor David Duncan, saying he displayed "extremely poor judgment" in destroying documents in last October and November.

Duncan earlier told investigators he simply followed the advice from Andersen's lawyers to discard the documents.

The tentative witnesses for the hearing include Duncan, Andersen attorney Nancy Temple and Berardino or other Andersen officials.

Johnson, the House panel spokesman, said the committee is interested in finding out "where Andersen is in its internal investigation of the Enron controversy" and wants to "examine administrative and disciplinary actions taken in the wake of the disclosure that documents" were destroyed.

A variety of federal law enforcement agencies and congressional investigators are probing Enron's sudden collapse, the largest bankruptcy in U.S. history and one that cost many employees their retirement savings.

Enron executives and directors sold their own shares of the company when employees were encouraged to continue investing.

One of the biggest sellers was Kenneth Lay, Enron's chairman and chief executive officer. Lay's lawyer said Lay disposed of millions of dollars in Enron stock because he needed to raise cash to repay loans, not because of concerns about the health of his company, the New York Times reported on Monday.

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