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Enron Mail |
Enron To Tap Restructuring Expert To Replace Ex-CEO Lay Dow Jones News Service, 01/24/2002 USA: White House - Lay resignation will not deter probe. Reuters English News Service, 01/24/2002 Enron auditor ripped as hearings open MSNBC, 01/24/2002 Enron Executives Depart, Trader Seeks New Leaders Bloomberg, 01/24/2002 UBS Moves To Start Up Former Enron US Energy Trade Ops Dow Jones Energy Service, 01/24/2002 USA: Jesse Jackson to meet, pray with Enron's Lay. Reuters English News Service, 01/24/2002 The Collected Letters of Enron's Employees: Michael Lewis Bloomberg, 01/24/2002 Enron delinquent in state tax payments Associated Press Newswires, 01/24/2002 Andersen employees paid overtime to shred Enron documents - internal memo AFX News, 01/24/2002 USA: Judge grants early Andersen depositions in Enron suit. Reuters English News Service, 01/24/2002 Arthur Andersen Ordered to Protect Enron Documents Bloomberg, 01/24/2002 Andersen Workers Told to Work Overtime on Shredding, Rep. Says Bloomberg, 01/24/2002 Wide Effort Seen in Shredding Data on Enron's Audits Bloomberg, 01/24/2002 Enron's chief auditor refuses to testify CNN, 01/24/2002 Enron Duncan Text Associated Press Newswires, 01/24/2002 USA: Lawyers see settlement of massive Andersen suits. Reuters English News Service, 01/24/2002 State Board Confirms Investigation into Arthur Andersen LLP/Enron Audit PR Newswire, 01/24/2002 Fed's Greenspan Comments on `Egregious' Accounting at Enron Bloomberg, 01/24/2002 Greenspan Says Enron 'Abrogated' Good Will Of US Public Dow Jones Capital Markets Report, 01/24/2002 USA: Derivatives at root of Enron collapse, expert says. Reuters English News Service, 01/24/2002 Campaign Finance Bill to Get a Vote, Thanks to Enron Bloomberg, 01/24/2002 SEC Chairman Pitt's Plan `Needs More Teeth,' Levitt Says Bloomberg, 01/24/2002 Enron Asks Ct For Quick OK Of India Unit Sale To BG Grp Dow Jones, 01/24/2002 SEC Considers Post-Enron Changes To Financial Reports Dow Jones News Service, 01/24/2002 Eyeless in Houston The Real Values Crisis Behind the Enron Collapse ABC News, 01/24/2002 More Enrons to come? CNN Wolf Blitzer Reports, 01/24/2002 Media Advisory: Enron Legal Documents Available at FindLaw PR Newswire, 01/24/2002 Enron To Tap Restructuring Expert To Replace Ex-CEO Lay By Christina Cheddar 01/24/2002 Dow Jones News Service (Copyright © 2002, Dow Jones & Company, Inc.) Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Who Enron Corp. (ENRNQ) taps to replace Kenneth Lay as the company's chief executive will provide clues about the future shape of the bankrupt company. Lay resigned late Wednesday amid pressure from the company's creditors committee. Enron, once the nation's largest energy trading company, now is preparing a search for a chief restructuring officer to serve as an interim chief executive. In an e-mail to employees, Lay said, the restructuring specialist would join Enron's remaining management team to direct the company's ongoing operations. The decision was applauded by Enron's creditors committee, which is using its clout to exert its will over how the company reorganizes in order to protect its interests. "The creditors committee is pleased with Ken Lay's and the Enron board's decision regarding Ken Lay's departure," said Luc Despins, a partner at Milbank Tweed, the firm representing Enron's creditors committee. "The creditors committee views this as a step in the right direction to maximize value for all creditors. The committee is encouraged that Enron is proceeding with the retention of a chief restructuring officer," he said. Despins declined to comment on what qualities the creditors committee would be looking for in a candidate, or how long the process might take. Sources familiar with turnaround efforts and executive recruitment said the process will be swift, and a decision could be made in few days. These people say Enron's next step will be to form a search committee made up of members of the creditors committee and the board. Next, the committee would work with a recruitment firm to identify candidates and make a selection and offer to the candidate. He or she would need to be approved by the bankruptcy court, one of the sources said. Enron spokesman Vance Meyer said he couldn't immediately comment on the details of the selection process. However, he said, Enron was in "an active search." There is a small pool of turnaround experts that come to mind, one executive recruiter said. The list includes individuals such as Robert S. Miller, currently chairman and chief executive of Bethlehem Steel Corp. (BS). Miller, who is best known for negotiating the 1980 loan bailout of Chrysler Corp, wasn't immediately available to comment. However, through a Bethlehem Steel spokeswoman, he said he remains committed to helping restructure the Bethlehem, Pa., steel company. "I made a personal commitment in September 2001 to the board of directors and to the employees of Bethlehem Steel Corp. to work with the firm until it was on stable ground," Miller said. Beyond executives who specifically deal in restructuring, there are those like financier Carl Icahn, who are famed for their ability to dismantle a company and eke out the value of its assets. Although it isn't necessary that the individual come from the energy industry, knowledge of the sector is helpful. Whoever is chosen, the person's reputation and background will say a lot about the strategy Enron's board and its creditors committee plan to take in the restructuring, said John Challenger, chief executive of Challenger Gray and Christmas, a Chicago-based outplacement firm. As for Lay, he will remain on Enron's board. In his email to employees Wednesday, Lay cited the distractions caused by "multiple inquiries and investigations" as one factor contributing to his decision to resign. Both Lay and Earl Silbert, a Washington, D.C.-based attorney representing Lay, weren't available for comment. Lay's departure follows other recent exits. Vice Chairman Mark Frevert left at the end of December, and Greg Whalley, Enron's president and chief operating officer, will join Swiss bank UBS AG (UBS), which acquired Enron's trading operations on Jan. 18. Both Frevert and Whalley were part of Enron's office of the chairman. The lone remaining member of office of the chairman is Chief Financial Officer Jeffrey McMahon, who was named chief financial officer after Andrew Fastow was forced to resign. Questions regarding an off-balance sheet financing vehicle run by Fastow sparked the initial inquiry into Enron's finances by the Securities and Exchange commission. Enron's Myer said he wasn't immediately sure whether others would be promoted to the office of chairman. Other departures include that of Mike McConnell, who was president of Enron Global Markets. According to Meyer, some of the resignations reflect Enron's restructuring efforts. Since filing for bankruptcy protection in early December, some of Enron's assets have been sold off or have suffered. -By Christina Cheddar, Dow Jones Newswires; 201-938-5166; christina.cheddar@dowjones.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: White House - Lay resignation will not deter probe. 01/24/2002 Reuters English News Service (C) Reuters Limited 2002. WASHINGTON, Jan 24 (Reuters) - The resignation of Enron Corp chairman Kenneth Lay will not deter the administration from seeking answers to the energy trading firm's spectacular collapse, a White House spokesman said on Thursday. Asked about Wednesday's resignation of Lay, a friend and major political supporter of President George W. Bush, White House spokesman Ari Fleischer said, "Nothing changes the determination of this administration to help protect people's pensions." "I know that no matter what happens to one individual there, even if that individual is a friend of the president's or is a supporter of the president's, nothing is going to stop the president and this administration from pursuing justice," he said. Enron is facing multiple congressional and federal investigations over its collapse, which threw thousands of employees out of work and devastated investors, including employees whose pension plans were heavily invested in Enron stock. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron auditor ripped as hearings open Congressional probes of energy firm's collapse begin Surrounded by counsel, David Duncan invoked the Fifth Amendment Thursday in order not to testify before a Congressional panel investigating actions surrounding Enron's collapse. MSNBC STAFF AND WIRE REPORTS WASHINGTON, Jan. 24 - The chairman of a House panel investigating Enron's collapse asserted Thursday that the shredding of records by Enron accountant Arthur Andersen clearly 'compounded the catastrophic business failure' of the energy giant. Top Andersen executives responded to the criticism by telling the panel that David Duncan, its lead partner for auditing Enron's books, was largely responsible for the most of the destruction of documents sought by government investigators. AS EXPECTED, Duncan refused to testify at the House hearing, invoking his right under the Fifth Amendment of the Constitution. Rep. Jim Greenwood, R-Pa., said that the decision by Duncan not to testify "will hamper the important work of this committee in our search for the truth that what transpired at Andersen during the critical period we are examining." The hearing came a day after Enron Chairman Kenneth Lay, who has close ties to President Bush, resigned his post. As the House panel pursued the document destruction at Andersen, the Senate Governmental Affairs Committees planned to question former regulators and other experts on whether the government failed to exercise proper oversight of Enron. The Securities and Exchange Commission started looking into Enron's accounting in mid-October, after the company reported a third-quarter loss of more than $600 million. The agency's inquiry eventually included demands for financial documents from Enron and Andersen. Enron's slide into the biggest bankruptcy in U.S. history on Dec. 2 left thousands of employees without jobs and their retirement savings all but gone because the funds had been tied largely to now-nearly worthless Enron stock. Other investors and creditors also have lost hundreds of millions of dollars. At least 11 congressional committees plan hearings on the collapse of what once was the nation's seventh-largest corporation. While reports emerged this week of document shredding at Enron's Houston headquarters as well, the focus of the House subcommittee, for the time being, is on the destruction of Enron-related papers at Anderson at a time last fall when the energy giant was descending toward bankruptcy. Last week, Andersen fired Duncan because of his role in Enron-related document destruction in October and November, just as Enron's problems were publicly emerging and the SEC began a formal investigation. But Duncan has claimed to investigators that he was following company guidance on document destruction laid out in an Oct. 12 e-mail from Andersen corporate attorney Nancy Temple at the firm's Chicago headquarters. Temple and Dorsey Baskins Jr., managing director of Andersen's professional standards group, were expected to be quizzed by the House panel as to why the memo was written and on the firm's normal paper shredding policies. The company claims the Temple memo was routine and aimed only to combat the "pack-rat" mentality of many accountants. Duncan's interpretation of the Oct. 12 memo reflected a sinister view, one supported by another Andersen manager, Michael C. Odom, who also has told investigators he viewed the memo as unusual. He also has been subpoenaed to testify. And a new Andersen document, obtained from committee sources Wednesday, also suggests the Temple directive was more than routine. In the Oct. 24 memo from a manager, employees were told the document shredding was so important that it should be pursued even "on an overtime basis, if necessary for the remainder of this week or for however long it takes." Investigators also may question Temple about a warning by Duncan last October that Enron's explanation for huge third-quarter losses might be misleading investors. Duncan expressed his concerns to Enron officials on Oct. 15, a day before the losses were announced with no change, according to several memos made available by the House subcommittee. But if lawmakers had hoped to hear from Duncan, they have been disappointed. Robert Giuffra Jr., one of Duncan's attorneys, informed the subcommittee Wednesday that the Duncan has not had time to prepare, has not had access to critical documents and will testify only if given immunity - as is his right under the Fifth Amendment. "Mr. Duncan seeks the full disclosure of the truth" and will continue to cooperate with the congressional investigations as well as those by the Justice Department and the SEC, Giuffra wrote. Kenneth Johnson, a spokesman for the full committee, said the panel did not want to impede a criminal investigation at the Justice Department, so it rejected the immunity request as well as a request by Duncan that he not be required to appear. ANDERSEN OFFICIALS DECRY SHREDDING Meanwhile, Andersen partner C.E. Andrews and Andersen managing director Dorsey Baskin, in written testimony to the House subcommittee, said the destruction by Duncan was wrong and that the auditing firm has taken steps in response. "Our investigation indicated that he directed the purposeful destruction of a very substantial volume of documents - and in doing so, he gave every appearance of destroying these materials in anticipation of a government request for documents," the two said. Duncan has said through his lawyers he did not do anything wrong but was simply following instructions from Temple and is cooperating with government investigators. "The case of Mr. Duncan was clear enough to allow us to draw conclusions about his responsibility at an early stage of the inquiry. That is not true of other Andersen personnel who were involved with the destruction of documents," the two Andersen executives told the House subcommittee on oversight and investigations. "Our investigation into the destruction of documents by Andersen personnel is far from complete," they said. The Associated Press and Reuters contributed to this report. Enron Executives Depart, Trader Seeks New Leaders 2002-01-24 16:00 (New York) Houston, Jan. 24 (Bloomberg) -- Enron Corp. executives are leaving the company as it struggles to survive the largest U.S. bankruptcy case, while creditors began exerting power to salvage the remains of the fallen energy trading giant. A day after Chairman and Chief Executive Kenneth Lay resigned amid pressure from the creditors, the company stepped up the search for new management to rescue it from oblivion. Officials at three New York-based consulting firms that specialize in turning around failing businesses are the front runners to replace Lay, people close to the company said. They areAlvarez & Marsal, Glass & Associates Inc. and Zolfo Cooper LLC, the people said. ``My guess is Enron will get sold off in pieces and the creditors will be left to fight over the bones,'' said Al Koch, chief operating officer of turnaround consulting firm Jay Alix & Associates. Creditors are concerned Enron may be worth less than they thought, analysts say. That means they're likely to get a fraction of the more than $40 billion they're owed. With Lay's departure, Enron plans to choose a turnaround specialist to run the company until a permanent replacement is found, Enron spokesman Mark Palmer said. For now, Chief Financial Officer Jeff McMahon and Stan Horton, chairman and chief executive of Enron Global Services, are in charge, Palmer said. Perceptions Deborah Hicks Midanek, a senior official at Glass & Associates, declined to comment on whether her firm might be named to lead Enron's reorganization. ``Stabilizing perceptions'' of Enron is of paramount importance, she said. ``Enron needs to restore confidence that the company is being handled in a responsible manner.'' Bryan Marsal, co-head of Alvarez & Marsal, declined to comment. His partner, Tony Alvarez, is chief executive officer of apparel maker Warnaco Group Inc. Stephen Cooper of Zolfo Cooper didn't return phone calls seeking comment. Lay's resignation was intended to fend off appointment of a Chapter 11 trustee in the case, experts say. A Chapter 11 trustee would supplant Enron's top officials and its board of directors. The trustee would likely name a new law firm to replace Weil, Gotshal & Manges as Enron's bankruptcy attorneys. A group of creditors led by Wiser Oil Co. and Nuevo Energy Co., former Enron trading partners, has asked U.S. Bankruptcy Judge Arthur J. Gonzalez in Manhattan to appoint a Chapter 11 trustee to run Enron's North American operations. `Fed Up' ``Motions by creditors to appoint a trustee or administrator is a clear indication that they are fed up,'' said Nancy Rapoport, dean of the University of Houston Law Center. ``There's a lack of confidence in Lay.'' Lay's attorney, Earl Silbert, and Luc Despins, an attorney for Enron's creditors' committee, didn't return phone calls. To oust management and have a trustee appointed, creditors must show management has been incompetent or committed fraud, said Patrick A. Murphy, a lawyer with San Francisco's Murphy Shenemen Julian & Rogers. Document shredding and suggestions the true state of the company's financial health was covered up might be adequate grounds to name a trustee, lawyers suing Enron said. ``If this were a smaller case, this would result in the instant appointment of a trustee,'' said David M. Bennett, a Dallas lawyer representing some Enron creditors. Enron's slide into insolvency has devastated its executive ranks. Of the 14 executives listed in the company's annual 10-K filing with the U.S. Securities and Exchange Commission in April, at least half, including former Chief Executive Officer Jeffrey Skilling and former Vice Chairman Clifford Baxter, are no longer with the company. Departures Vice Chairman Mark Frevert said in interview that he left the company at the end of the year. Frevert said he ``really can't say'' whether he quit or was fired. Greg Whalley, president and chief operating officer, is set to join Swiss bank UBS AG, which acquired Enron's trading operation on Jan. 18, according to the sale documents. In early December, Enron paid $55 million to 500 employees to persuade them to stay at the company for 90 days. Three-fourths of the employees held positions below the rank of vice president at the time. McMahon became CFO in October, after the ouster of Andrew Fastow, who set up and ran many of the private partnerships that led to Enron's demise. McMahon, a certified public accountant, joined Enron in 1994 from MG Natural Gas Corp., where he was CFO. Phone calls to Enron seeking comment from McMahon and Whalley weren't returned. Seeking Control With most of Enron's more desirable assets sold or withering, creditors have stepped up efforts to control what's left of the company. In court papers filed yesterday, the creditors' committee asked a bankruptcy judge for permission to investigate Enron's former auditor, Arthur Andersen LLP, to help it prepare possible legal action against the accounting firm. Enron fired Andersen last week after the firm admitted employees destroyed Enron-related documents. Lay's resignation comes amid a dozen government investigations and more than 50 civil lawsuits into Enron's collapse. The company filed bankruptcy Dec. 2 and fired more than 4,500 employees after it admitted overstating profit by $586 million since 1997. UBS Moves To Start Up Former Enron US Energy Trade Ops By Mark Golden and John Edmiston 01/24/2002 Dow Jones Energy Service (Copyright © 2002, Dow Jones & Company, Inc.) Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- UBS AG (UBS) unit UBS-Warburg took a step forward Thursday in its restart of the acquired North American energy trading unit of Enron Corp. (ENRNQ). UBS Warburg management asked all Enron employees that had accepted employment offers or intended to do so to attend a hastily called orientation meeting in Houston at the posh Houstonian Hotel. About 700 employees attended thee meeting, where they were given basic information about UBS and dealt with routine employment matters, attendees outside the hotel said. The employees were told that they would hear more about UBS' vision for the trading unit next week. UBS declined to comment on the meeting. UBS has offered jobs to the vast majority of Enron's North American energy trading staff, and many of those workers have already signed employment contracts, Enron and UBS employees said. The unit is expected to start trading next month. "Our goal is to reestablish the business," UBS spokesman David Walker said. "The buildup will be measured and focused on customer needs." In a deal approved by the bankruptcy court last week, UBS will take ownership of Enron's North American energy trading operations. The transaction involves no cash, but Enron will collect a third of the unit's profits for 10 years. UBS can begin to buy out Enron's interest in Year 3 of the deal. Walker declined to comment on whether UBS expects its energy trading volume to approach Enron's former level, nor would he say what the size of the unit's capitalization will be. The company won't be afraid of taking some big risks, however. "The risk profile will be consistent with the risk profile of UBS Warburg," Walker said. Some traders for other companies have questioned whether the UBS/Enron group could be anywhere near as large as the old Enron. Without enormous capitalization, the unit won't be able to make huge directional calls on commodity prices or stand by those calls for awhile even when the market moves in the opposite direction, as Enron did. Without huge deal flow, some traders have said, UBS/Enron won't have the market information that helped Enron traders make the right directional calls most of the time. But employees of Enron and UBS disagreed Thursday. "They haven't given us specifics, and I'm sure it won't be like 'the Big E' - that was an extreme situation," one trader moving to UBS said. "But they recognize the need for a certain amount of latitude in order to make money in this business. Will there be a severe change to risk limits? I don't think so." A UBS employee agreed. "That's what we do for a living: We manage risk and sometimes make big bets, too," the employee said. "Don't think that we don't have any tolerance for that." UBS has no intention of buying any of Enron's current trading positions, which are in the process of being liquidated following Enron's bankruptcy filing Dec. 2. Nor does UBS have any intention of acquiring Enron's retail unit, Enron Energy Services, which worked closely with the wholesale traders. "We plan on building up our own portfolio," Walker said. -By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com (John Edmiston in Houston and Jason Leopold in Los Angeles contributed to this article.) Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: Jesse Jackson to meet, pray with Enron's Lay. 01/24/2002 Reuters English News Service (C) Reuters Limited 2002. HOUSTON, Jan 24 (Reuters) - Civil rights activist Rev. Jesse Jackson and former Enron Corp. chief executive Ken Lay were set to talk on Thursday night in a meeting at Enron headquarters that was likely to include a prayer session, a Jackson spokesman said. The hastily arranged session will be part of a two-day Jackson visit to Houston to drum up support for thousands of laid-off Enron employees who lost their savings in the energy trader's financial collapse, spokesman Mike Levine said. "(Jackson) wanted to meet one-on-one with Lay just to let him know he's not here to come after him. He's just here to raise support for the employees," Levine said. "I'm sure they'll do some praying," he said. The besieged Lay, who is the son of a Baptist preacher, resigned in disgrace as Enron's chairman and chief executive officer on Wednesday, saying he could not reorganize the bankrupt company and fight its mounting legal battles at the same time. He remains on Enron's board of directors, but is scheduled to testify before Congress next month and faces numerous civil lawsuits and a criminal investigation by the U.S. Justice Department. Enron was the nation's top energy trading company until Dec. 2 when a ruinous financial scandal forced it into Chapter 11 bankruptcy. Jackson's visit comes a day after fellow activist Al Sharpton appeared on the steps of Enron headquarters to urge federal help for Enron employees and investors. An Enron spokesman was not immediately available for comment. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. The Collected Letters of Enron's Employees: Michael Lewis 2002-01-24 14:33 (New York) (Commentary. Michael Lewis, whose books include ``Next: The Future Just Happened'' and ``Liar's Poker,'' is a columnist for Bloomberg News. The opinions expressed are his own.) Berkeley, California, Jan. 24 (Bloomberg) -- One of the high points of my day is reading the mail I receive from current and former Enron Corp. employees. If you are in the middle of a big media story and have some feel for its nuances, the coverage of that story always seems ridiculously inadequate. A lot of Enron's employees seem to feel the press doesn't fully understand what has happened to them. At any rate, a number of Old Enronians have felt compelled to call or write to me. Thanks to them I know that the now notorious Raptor partnership, into which Enron's top executives stuffed many bad investments, got its name because raptors ate garbage. Thanks to them I understand that the documents Arthur Andersen shredded were probably butt-covering memos from junior accountants to their bosses that spelled out the tacit understanding between the junior accountants and Enron that enabled Arthur Andersen to turn a blind eye to Enron's deceits. Thanks to them I know that Jeffrey Skilling was widely regarded as the shrewdest of the top executives and, by resigning for ``personal reasons,'' signaled to everyone else that Enron was doomed. But these letters from Enron's employees -- especially the ones from people still working at Enron -- are frustrating, because they usually come with a request that I avoid contacting them for further discussion. They don't want to be famous, just understood. Unanswered Questions With no one on the inside to quiz, I still don't understand the story as it demands to be understood. Big questions remain about Enron, including: 1) Why did Enron make so many really stupid investments? At the heart of the company's problems were a lot of inexplicable purchases of Indian power plants and Brazilian pipelines and so on. As one especially acute Enron correspondent put it, ``it really takes a ton of people to flush billions down the toilet. Popular wisdom would have us believe that it was just a few bad apples at the top (but) at the very least hundreds of employees knew about a couple of bad deals they worked on. Why weren't they wondering who was making all the money?'' Enron's investment decisions were so colossally inept as to suggest an ulterior motive. But the best explanation I've received -- that Enron bought power plants in far-flung places to gain access to information about supply and demand in those markets that it could use in trading -- still rings hollow. Fastow Mystery 2) Why didn't Enron's former chief financial officer, Andrew Fastow, sell his Enron stock on the way down? Kenneth Lay and Skilling and other top executives clearly knew that they had to get out while the getting was good and sold millions of dollars of Enron shares. Lay was more or less hand-selling his private holdings to his employees. But Fastow, who knew as much about the rot as anyone, held on when he must have known the stock was likely to collapse. Why? Even as he functioned as Enron's CFO was he grooming himself for the courtroom? Is that why he was so quick to hire crack trial lawyer David Boies? 3) Why isn't it considered strange that Enron lent millions of dollars to its already rich chairman? Lay's lawyer has claimed that Lay sold some of his Enron stock simply to repay personal loans the company made to him. But why was the company lending him money in the first place? This Is Morality? 4) Why was Sherron Watkins, the author of the now famous letter to Lay, reprinted last week in the New York Times, regarded within Enron as a deeply moral person? Her letter has been waved about in the media as a weapon against Lay, as evidence that the boss ignored warnings from below, and that there was at least one good woman inside Enron who was deeply, deeply disturbed by the bad behavior. But Watkins' letter was not a work of moral philosophy. Her chief concern was not that Enron was breaking the law and cheating its investors, but that people outside Enron might find out that Enron was breaking the law and cheating investors -- and that, as she put it, ``my eight years of Enron work history will be worth nothing on my resume.'' 5) Why do people continue to work for companies even after they've concluded the people who run them are dishonest? Watkins' letter quotes a fellow employee saying ``I know it would be devastating to all of us, but I wish we would get caught. We're such a crooked company.'' Many of Enron's employees now claim to have been equally cynical about their enterprise. None of the many I've heard from has risen to the defense of Lay, Skilling, Fastow, et al. But all of these people seem to believe that their cynicism absolves them from any personal responsibility. Many of them apparently see themselves as innocent victims. Were they? -- Michael Lewis in Berkeley, California, at mlewis1@bloomberg.net through the New York newsroom (212) 318-2320/ Editor: Rooney Enron delinquent in state tax payments 01/24/2002 Associated Press Newswires Copyright 2002. The Associated Press. All Rights Reserved. SACRAMENTO (AP) - California tax officials say the embattled Enron Corp. is more than a year late in paying a $493,000 tax bill. The bankrupt energy giant is facing investigations by congressional committees and the Securities and Exchange Commission. California Attorney General Bill Lockyer has subpoenaed the company regarding his investigation into last year's price spikes in the wholesale energy market. And a California legislative committee investigating possible price manipulation has served additional subpoenas on Enron officials about possible destruction of documents. The California Franchise Tax Board said Enron's corporate tax payment was due March 15 of last year. The state will send a notice to Enron later this spring if it doesn't receive its money, said Pat Hill, a spokesman for the Franchise Tax Board, which collects individual and business taxes. "Whatever taxes you owe, you have to pay by the deadline, which in Enron's case was March 15. The return isn't due until October," Hill said. He didn't know if the company had filed a return by the deadline. Enron's bill is accruing 7 percent interest while it goes unpaid, he said. The state may have to file a claim in the company's bankruptcy hearing to get paid. "We'll be in the same line as all those families of employees the company owes," said Steve Maviglio, spokesman for the governor. The taxes are owed for earnings in California in 2000. Corporate taxes are typically not public information, but the tax board does release the amount of money companies owe when they are delinquent. Every year, about 600,000 California residents and 22,000 corporations get a letter from the tax board because they haven't paid, Hill said. The board usually gives companies as long as 15 months after the due date before it sends the letter. If companies refuse to pay taxes, the board can revoke their corporation status, effectively ending their ability to do business in the state. "Enron has other more pressing issues, I think," Hill said. Enron's bill is a small fraction of the state's annual tax collection, about $40 billion. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Andersen employees paid overtime to shred Enron documents - internal memo 01/24/2002 AFX News © 2002 by AFP-Extel News Ltd WASHINGTON (AFX) - Employees working for Andersen LLP were paid overtime to shred documents related to Enron Corp, according to an internal Andersen memo released by the House of Representatives' Energy and Commerce Subcommittee on Oversight and Investigations. "We do expect that people will be able to do this on an overtime basis, if necessary, for the remainder of this week, or for however long it takes for each of you to be comfortable" that the document retention and destruction guidelines are being met, the Oct 24 e-mail message said. On Nov 10, a new policy instructing Andersen employees to stop shredding documents was implemented, but the prior policy allowed for destruction of certain documents. The memo was released following a hearing where Andersen executives were questioned by committee members about the company's role in the growing Enron scandal. cbd/gc Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: Judge grants early Andersen depositions in Enron suit. By C. Bryson Hull 01/24/2002 Reuters English News Service (C) Reuters Limited 2002. HOUSTON, Jan 24 (Reuters) - A federal judge on Thursday ordered six key Andersen employees to give early depositions about the shredding of Enron-related documents, handing an initial victory to shareholders suing the auditor and the failed energy giant's top insiders. U.S. District Judge Melinda Harmon granted in full a motion for discovery in the massive suit that requires the preservation of all Enron-related records held by Andersen, the accounting firm that Enron Corp. fired last week. The motion was requested by all but one plaintiff in the suit. Allegations of systematic document shredding at Andersen and Enron rapidly mobilized plaintiffs' attorneys, who pushed for the early discovery and depositions to preserve as much evidence as possible in what is certain to be a lengthy lawsuit with billions of dollars at stake. The six employees include Andersen's fired top partner on the Enron account, David Duncan, who on Thursday asserted his Fifth Amendment right against self-incrimination during a hearing before the U.S. House Energy and Commerce Subcommittee on Oversight and Investigations. Andersen fired him on Jan. 15 for ordering the destruction of Enron documents after a U.S. Securities and Exchange Commission probe was launched in October. Also giving depositions will be four other Andersen partners in Houston who were relieved of their management responsibilities and a lawyer who sent an e-mail explaining Andersen's document-destruction policy to the auditor's Houston office. Harmon's order waives a provision of U.S. securities law that delays depositions until a judge determines whether a suit is frivolous. The provision is intended to prevent legal interviews from being improperly used to gather business information. The depositions cannot be taken until 20 days from now, and are restricted to eight hours and limited to the topic of document and data destruction or storage. The order allows Andersen's outside lawyers to guard the documents at their own sites and permits the plaintiffs to inspect those sites immediately. Andersen must within 20 days categorize and report the documents they have found or recovered, and explain the steps it took to recover deleted documents, the order says. One lawyer said the plaintiffs were delighted with the judge's ruling. Andersen, joined by lawyers who are suing them on behalf of the New York City and state of Florida pension funds, had opposed only the early depositions. "We had asked for 95 percent of this, and even had suggested a lot of it," Andersen attorney Rusty Hardin said. "We'll make those people available. We just thought it would be more convenient for them to give the depositions a few months from now, when they were more familiar with the documents." Hardin said he only had control over the appearances of the five current Andersen employees, who all have their own attorneys. Since Duncan has been fired, his own attorney will handle the depositions, Hardin said. A Duncan representative had no immediate comment, having just learned of the order. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Arthur Andersen Ordered to Protect Enron Documents 2002-01-24 13:21 (New York) Houston, Jan. 24 (Bloomberg) -- Arthur Andersen LLP officials must answer questions about what Enron Corp. auditing records have been destroyed and protect remaining documents, a federal judge ruled. U.S. District Judge Melinda Harmon gave Andersen officials 20 days to investigate the destruction of Enron documents and report to the court how many can be reconstructed. Enron Corp. shareholders sought the order after officials of Andersen acknowledged earlier this month that they shredded or deleted ``a significant number'' of Enron documents. The Justice Department, Securities and Exchange Commission, congressional committees and shareholders' lawyers want the documents to help determine how Enron collapsed. ``I expect we'll learn through this questioning that the document destruction was a deliberate, calculated effort to protect Andersen from liability,'' said William Lerach, a San Diego-based lawyer representing Enron investors in lawsuits over the energy trader's collapse. ``We've got full protection for the documents now.'' Officials of Chicago-based Andersen weren't immediately available for comment on the ruling. Shares of Houston-based Enron, which filed for Chapter 11 bankruptcy protection in December, rose 4 cents to 38 cents in mid afternoon trading. Lawyers for Enron investors, bondholders and former employees began pushing for a court order to safeguard Enron-related records after reports surfaced that document-shredding continued following internal orders to halt it. A fired Enron project manager said in court filings that documents were being destroyed at Enron's Houston headquarters as late as Jan. 14. Company officials sent out e-mails in November ordering workers to set aside any records that may be involved in Enron-related probes. Earlier this week, Enron officials said they found a trash can full of shredded documents on the 19th floor of the company's downtown Houston skyscraper. That led investors' lawyers to allege record destruction was continuing. Questioning Slated Under Harmon's four-page order, Andersen officials must set aside documents, letters, e-mails and other records related to Enron audits. They also must try to reconstruct any destroyed documents or recreate deleted electronic files from backup tapes. Andersen also must make a group of employees available to be questioned by shareholders' lawyers on what documents were destroyed, when they were destroyed and who ordered their destruction, under Harmon's order. The Andersen employees to be questioned include Thomas H. Bauer, Michael M. Lowther, Michael C. Odom and Stephen Goddard Jr., all partners in Andersen's Houston office. Goddard, the office's former managing partner, has been placed on administrative leave along with Bauer, Lowther and Odom following the shredding disclosures, according to Harmon's order. Nancy Temple, an Andersen in-house lawyer in Chicago, also has been ordered to submit to questioning by shareholders' lawyers. Temple answered questions about Enron's collapse and the document destruction on Capitol Hill today. David B. Duncan, the fired former lead partner in charge of Andersen's Enron group, also must submit to questions by plaintiffs' lawyers about the document destruction, Harmon ruled. Fifth Amendment Andersen lawyers told the judge yesterday that they can't force Duncan to show up for the questioning because he's no longer an employee. Duncan, who invoked the Fifth Amendment to avoid a congressional committee's questions today, is likely to do the same thing at any deposition in the shareholder suits, said Rusty Hardin, a Houston lawyer representing the U.S.'s fifth-largest accounting firm. Investors' lawyers also can inspect the four secure sites that Andersen's lawyers are using to store documents and computers containing Enron-related material, the judge said. Finally, she ordered the accounting firm to hand out a copy of the order to all its partners. Hardin said plaintiffs' lawyers unfairly fanned public outrage about the shredding. ``There needs to be some modicum of decency in the way this company is treated,'' Hardin said. --Jef Feeley in Houston (713) 353-4873, or jfeeley@bloomberg.net through the Washington newsroom (202) 624-1917. Editor: Asseo Andersen Workers Told to Work Overtime on Shredding, Rep. Says 2002-01-24 15:00 (New York) Washington, Jan. 24 (Bloomberg) -- Arthur Andersen LLP employees were ordered to work overtime to destroy documents related to Enron Corp., U.S. Representative James Greenwood said, citing an Andersen memo. Greenwood, a Pennsylvania Republican, made the comments at an impromptu press conference after congressional hearings into the Enron case. A federal judge ruled today that Andersen officials must answer questions about what Enron auditing records have been destroyed and must protect remaining documents. --Chris Dolmetsch in the Princeton newsroom (609) 750-4652, or cdolmetsch@bloomberg.net. Editor: Sabo Wide Effort Seen in Shredding Data on Enron's Audits By RICHARD A. OPPEL Jr. January 24, 2002 WASHINGTON, Jan. 24 - Scores of people who worked at Arthur Andersen's Houston office were involved in the destruction of documents related to the Enron Corporation according to the chairman of one of the Congressional subcommittees that began hearings today on Enron's collapse. The chairman, Representative James C. Greenwood, Republican of Pennsylvania, head of the House Energy and Commerce oversight subcommittee, said investigators for the subcommittee had determined that document shredding was widespread and that up to 80 people had received orders to destroy papers. He said it called into question Andersen's attempts to blame rogue employees for the episode. The hearings today are Congress's first public exploration into the Enron collapse, the largest corporate Chapter 11 bankruptcy filing in American history. Enron's chairman and chief executive, Kenneth L. Lay, announced his resignation late Wednesday, saying the many investigations into the company's collapse would require too much of his attention. Last week, Andersen, one of the Big Five accounting firms, fired the lead partner on the Enron account, David B. Duncan, saying he orchestrated widespread document destruction shortly after learning of a government investigation into Enron's finances. But Mr. Greenwood expressed skepticism on Wednesday about that account. "Do you believe that 80 Andersen employees were directed by Mr. Duncan to violate an express provision of policy by Andersen in the face of yet another investigation, and none of them picked up the phone and called their superiors and said, `This doesn't seem right'?" he asked. "The question we need to get to is, Were there instructions from above." Other people close to the investigation said they doubted that the number of Andersen employees was as high as Mr. Greenwood's estimate, but they said it was a much larger group than the company had suggested. Mr. Duncan appeared today under subpoena at the energy and commerce subcommittee hearing, but as expected, he invoked his Fifth Amendment right against self-incrimination. His lawyer, Robert Giuffra, told the committee in a letter on Wednesday, that Mr. Duncan would "rely on his Constitutional right not to testify" unless he is given immunity. Congressional investigators made public on Wednesday a memo Mr. Duncan wrote last October saying he expressed concerns about the way in which Enron was about to disclose huge losses from controversial dealings that investigators believed played a significant role in the company's collapse. The disclosure, he said, was misleading to investors and possibly illegal. On Oct. 16, Enron disclosed that it lost $618 million during the third quarter and that it would have to reduce its net worth by $1.2 billion, partly because of dealings with investment partnerships that had been headed by Andrew S. Fastow, who was then the company's chief financial officer. At the time, the company said the losses were the result of one-time losses, leaving the impression that the company could weather the bad quarterly results. But two days earlier, Mr. Duncan warned the company's chief accounting officer, Rick Causey, that the way the company planned to disclose the information might be "misconstrued or misunderstood by investors," according to a memo Mr. Duncan wrote to his files on Oct. 15 that was made available to Congressional investigators. However, the press release Enron issued the next day was "essentially the original presentation," Mr. Duncan wrote. Mr. Duncan said in his memo that he had warned Mr. Causey that the Securities and Exchange Commission initiates enforcement actions against companies that issue financial information that is "materially misleading." He said the company should rewrite its earnings report and bring in lawyers to assure that its statements were not false. One week later, officials in Andersen's Houston office began to shred Enron-related documents on a massive scale, even though Enron had just disclosed that the Securities and Exchange Commission had begun an investigation into its finances. Andersen fired Mr. Duncan last week, saying he had ordered the destruction of the Enron papers. An Andersen spokesman, Charlie Leonard, characterized Mr. Duncan's memo as routine and said it reflected internal debates about accounting issues that occur between auditors and corporate executives. He added: "It looks like that with the exception of some inappropriate phrasing, Mr. Duncan was doing what he was supposed to." An Andersen official on Wednesday evening repeated the firm's assertion that Mr. Duncan's actions, aided by other partners in the Houston office who were demoted or placed on leave last week, had not been sanctioned. "The one glaring fact here is that David Duncan, with full knowledge of an S.E.C. investigation, initiated a massive document destruction campaign," official said. The hearings that began today, which will eventually involve 10 different committees, could lead to changes in pension, tax, securities and accounting laws, though many experts are skeptical how far lawmakers will go. Past efforts to tighten laws in these areas, particularly auditing standards, have been beaten back by industry lobbying. The fall of Enron has touched off a scramble in the capital to assign blame and avoid the taint of the company's prodigious political donations. Some Democrats in Congress see the Enron case as a windfall that could dent President Bush's lofty public approval ratings. But many Democrats are also vulnerable because the company spread its largess so widely and the accounting and regulatory practices that led to Enron's collapse took place under Democratic and Republican administrations. In the House, the Energy and Commerce subcommittee cross-examined senior Arthur Andersen officials about why the firm destroyed Enron documents after learning about an S.E.C. investigation into the company's finances. Also, the Senate Governmental Affairs Committee was examining whether government policies failed and what new legislation is needed. The first witness was Arthur Levitt, the former S.E.C. chairman whose efforts to tighten auditing standards two years ago were derailed by opposition from Congress. Separately, Representative John Conyers Jr. of Michigan, the ranking Democrat on the House Judiciary Committee, formally asked the Justice Department to appoint a special counsel to investigate Enron, arguing the case "represents one of the largest corporate frauds in the nation's history" and citing the large campaign donations Enron has provided to President Bush over the years and the large number of senior administration officials who worked for or invested in the company. A Justice Department official said that he had not seen Mr. Conyers's letter and that officials were still proceeding with their criminal investigation. The Senate Finance Committee asked Enron on Wednesday to turn over tax returns for the past 16 years, in a letter sent by the committee chairman, Max Baucus, Democrat of Montana, and the ranking Republican, Charles E. Grassley of Iowa. Their request follows the disclosure in The New York Times last week that Enron used almost 900 subsidiaries in tax-haven countries and other techniques to pay no income taxes in four of the last five years. In an interview, Mr. Greenwood said Mr. Duncan had sought immunity for his testimony but had been rebuffed. Justice Department officials are worried that grants of immunity made by Congress might hamper their criminal investigation of Enron and Andersen. Investigators had asked Andersen's chief executive, Joseph F. Berardino, to appear, but Mr. Berardino said he would be willing to attend on a later date. Instead, Dorsey Baskin, a senior technical expert at Andersen, testified, as did Nancy Temple, an in-house lawyer for Andersen in Chicago. While the House subcommittee hearing is focusing on Andersen's document destruction, attention will turn later to the reasons for Enron's flawed accounting. In Mr. Duncan's memo, the auditor says Andersen had expressed serious reservations about Enron's accounting, particularly the company's description of large losses as "nonrecurring," or one-time, charges. Andersen had advised Enron that its use of the term "could potentially be misunderstood by investors," Mr. Duncan's memo states. "We pointed out that such items are, more often than not, included in normal operating earnings in" financial statements that are put together using generally accepted accounting practices. The next day - the same day Enron disclosed the earnings press release that Mr. Duncan objected to - Ms. Temple, who had been involved in discussing the matter with Mr. Duncan, sent an e-mail message to Mr. Duncan and others at the firm suggesting that language be deleted from the memo "that might suggest we have concluded the release is misleading." A copy of the message showed that Ms. Temple appeared to be worried about potential litigation on Enron's finances and she sought to remove her name from the list of people who received the document: "If my name is mentioned it increases the chances that I might be a witness, which I prefer to avoid." Ms. Temple's lawyer did not return a telephone call for comment. Mr. Leonard, the Andersen spokesman, said Ms. Temple was simply worried about waiving attorney-client privilege. Her reference to not concluding that the press release is misleading reflects her understanding that auditors "don't have a right or responsibility to pass judgment on press releases," only formal financial statements, he added. Mr. Duncan, 42, has told investigators that he was only destroying documents in keeping with an Oct. 12 e-mail message from Ms. Temple that emphasized that they follow a policy requiring some documents be destroyed. Mr. Duncan has told investigators he stopped shredding after Ms. Temple ordered it halted Nov. 9. While Andersen officials have sought to blame Mr. Duncan and other employees in Houston office for the destruction of the documents, investigators are skeptical and want to probe why the firm waited more than two weeks after Enron disclosed the S.E.C. investigation to order the shredding stopped. Mr. Greenwood said that in interviews with committee investigators, Mr. Duncan stated that on at least two occasions before Oct. 12, Ms. Temple asked him, "How are you on compliance with the document-retention on Enron?" "Did she really mean that," Mr. Greenwood asked, "or did she mean, `How are you doing on getting rid of the documents?"' Enron's chief auditor refuses to testify Lawmakers describe widespread destruction of Enron documents at Andersen January 24, 2002 Posted: 1:17 PM EST (1817 GMT) WASHINGTON (CNN) -- The former Andersen LLP auditor who handled Enron's books refused to testify at Thursday's opening hearing of a congressional panel investigating the shredding of documents related to the Enron collapse. Top auditor David Duncan, since fired by Anderson -- which did Enron's accounts -- invoked his Fifth Amendment rights against self incrimination and declined to speak further. Lawmakers on the investigative subcommittee of the House Energy and Commerce Committee described on Thursday what they called widespread and systematic effort to shred Enron-related documents at the company's accounting firm and charged that the practice, which was later suspended, has impeded investigations and could lead to criminal charges. Duncan, who was the first to be called to testify, had earlier said through his lawyer that he would refuse to testify before the congressional panel unless he was granted immunity. Lawmakers left open the possibility that he will return before the committee at a later date. "Mr. Duncan, Enron robbed a bank. Arthur Andersen provided the getaway car and they say you were at the wheel," Rep. James Greenwood, R-Pennsylvania, the subcommittee chairman, told Duncan shortly after he was sworn in to testify. But when Greenwood asked whether he ordered the destruction of Enron documents in an attempt to subvert investigators, Duncan declined to answer. "Mr. Chairman, I would like to answer the committee's questions but on the advice of my counsel I respectfully decline to answer the question based on the protection afforded to me under the Constitution of the United States," Duncan said, repeating it when asked to clarify. Greenwood dismissed him from the hearing room, but said Duncan might return to testify at a later date. Other Andersen executives were also scheduled to testify at the hearing on Enron, the energy giant that filed the biggest bankruptcy case in U.S. history Panel members were highly critical of Andersen executives. "It is clear that scores of professionals and support staff were involved in the shredding of paper and deletion of computer files relating to the Enron audit. Yet to date, committee investigators have been unable to locate or learn about a single Andersen employee who raised any concerns or objections about destroying Enron-related documents even after the [Securities and Exchange Commission] inquiry became public," Greenwood said. Rep. John Dingell, D-Michigan, the ranking member on the panel, said the accounting firm's shredding of documents "was either criminally stupid or stupidly criminal, or both." Lawmakers vowed to get to the bottom of Enron's bankruptcy. "Let me make it clear, this committee will cut no one any slack as we go forward," said Rep. Billy Tauzin, R-Louisiana, the chairman of the full Energy and Commerce Committee. "If there has been corporate wrongdoing, we'll unroot it. If there's personal or corporate attempts to hide the facts, we'll uncover them and people will answer for them." Tauzin said before the hearing that it is likely criminal charges will be filed because of indications that both Enron and Anderson shredded financial documents after Enron filed for bankruptcy and as it faced numerous investigations and lawsuits. "I would not be surprised if some criminal indictments come out of this," Tauzin told CNN in an interview before the hearing started. One congressional aide said the shredding at Andersen was more widespread than the company has acknowledged, involving as many as 80 employees. The hearing came a day after Kenneth Lay resigned from his role as chairman and chief executive of the collapsed energy giant. "I want to see Enron survive, and for that to happen, we need someone at the helm who can focus 100 percent of his efforts on reorganizing the company and preserving value for our creditors and hard-working employees," Lay said in a written statement. "Unfortunately, with the multiple inquiries and investigations that currently require much of my time, it is becoming increasingly difficult to concentrate fully on what is most important to Enron's stakeholders." Lay will remain on Enron's board, but he will step down as the company's leadership post, the company announced. The move came after talks with the creditor's committee at Enron, Lay said. Enron filed for bankruptcy in December. Before its sudden collapse, it was ranked the seventh-largest U.S. company in terms of revenue. In October, Enron was forced to disclose that it had concealed more than $500 million in debt from related partnerships led by company executives. Its stock, which once traded at nearly $90 a share, sank to less than $1 a share. The company's collapse has sparked a Justice Department probe and numerous congressional investigations. The company and its executives have been the single biggest group of contributors to President Bush and other Republican campaigns, and they have donated to many Democratic lawmakers as well. Enron's executives and directors sold about $1.3 billion worth of stock in the last three years, with Lay making $119 million, according to a Thomson Financial study that CNN commissioned. One particularly controversial aspect of the company's collapse is that employees were barred from selling stock held in their 401 (k) plans even as executives were unloading their plummeting shares. The prohibition decimated the retirement accounts of many employees. The Andersen accounting firm admitted its employees shredded documents relating to Enron audits in the days after the company's problems became public. Andersen CEO Joseph Berardino conceded Sunday that his company made errors but said that Enron's demise ultimately was the result of a failed business model, not shady accounting. A former Enron executive said Monday that employees at the company's headquarters in Houston, Texas, were shredding documents as late as January 14 in spite of the company's bankruptcy filing that costs thousands of investors and employees their life savings. Security guards were posted in the building Wednesday to prevent further shredding. Enron Duncan Text By The Associated Press 01/24/2002 Associated Press Newswires Copyright 2002. The Associated Press. All Rights Reserved. The discussion Thursday between fired Enron auditor David Duncan and Rep. Jim Greenwood, R-Pa., chairman of a House Energy and Commerce subcommittee investigating the Enron collapse: GREENWOOD: Good morning, Mr. Duncan. Mr. Duncan is here with us today under subpoena. To date, Mr. Duncan has cooperated with this committee in our search for the facts by submitting to an interview last week with our committee investigator that lasted more than four hours. Yet we received a letter from his counsel yesterday stating that Mr. Duncan authorized his counsel to advise the committee that he will, quote, rely on his constitutional right not to testify, close quote. I believe that this privilege should be personally exercised by, before the members, and that's why we have requested Mr. Duncan's appearance here today and request that he reconsider. Mr. Duncan, you're aware that the committee is holding an investigative hearing and that in doing so we have the practice of taking testimony under oath. Do you have objection to testifying under oath? DUNCAN: No sir. GREENWOOD: Thank you. The chair also advises you that under the rules of the House and the rules of the committee, you are entitled to be advised by counsel. Do you desire to be advised by counsel during your testimony today? DUNCAN: Yes sir. GREENWOOD: In that case, would you please rise and raise your right hand, and I will swear you in. Mr. Duncan, do you swear that you will tell, the testimony you will give this committee is the truth, the whole truth and nothing but the truth? DUNCAN: Yes, Mr. Chairman. GREENWOOD: Thank you, Mr. Duncan. You are now under oath and you may give a 5-minute summary of your written testimony if you choose to. DUNCAN: I have no summary, sir. GREENWOOD: OK. The chair will recognize himself for questioning. Mr. Duncan, Enron robbed the bank. Arthur Anderson provided the getaway car, and they say you were at the wheel. I have a specific question for you, Mr. Duncan. You were fired by Anderson last week for orchestrating an expedited effort among the Anderson-Enron engagement team to destroy thousands of paper documents and electronic files relating to the Enron matter after learning of an inquiry by the Securities and Exchange Commission into Enron's complex financial transactions. Did you give an order to destroy documents in an attempt to subvert governmental investigations into Enron's financial collapse, and if so, did you do so at the direction or suggestion of anyone at Anderson or at Enron? DUNCAN: Mr. Chairman, I would like to answer the committee's questions, 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. GREENWOOD: Let me be clear, Mr. Duncan. Are you refusing to answer the question on the basis of the protections afforded to you under the Fifth Amendment to the United States Constitution? DUNCAN: Again, on the advice of my counsel, respectfully I respectfully decline to answer the question based on the protection afforded me under the United States Constitution. GREENWOOD: Will you invoke your Fifth Amendment rights in response to all of our questions here today? DUNCAN: Respectfully that will be my response to all of your questions. GREENWOOD: I am disappointed to hear that, but it is therefore the chair's intention to dismiss the witness. Mr. Duncan, we thank you for your attendance today and your respect for this committee's process. You are dismissed. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: Lawyers see settlement of massive Andersen suits. By Gail Appleson, Law Correspondent 01/24/2002 Reuters English News Service (C) Reuters Limited 2002. NEW YORK, Jan 24 (Reuters) - Andersen, which handled Enron Corp.'s audits, will have to pay what could be hundreds of millions of dollars to settle massive civil litigation if it hopes to survive the scandal over the energy trader's collapse, legal experts say. "This is one that will never get to trial," said Robert McTamaney, partner at the New York law firm of Carter, Ledyard & Milburn. Some experts said Andersen will have to move quickly to reach a deal that will limit civil liabilities and restore confidence in the firm. But they said it will take an enormous sum to do so, raising questions as to just how much Andersen and its insurers can handle. While the insurance amount is confidential, insurance sources have told Reuters they think Andersen has a maximum of $500 million in professional liability coverage in the commercial market plus funds held in several self-owned Bermuda insurance entities. Even if Andersen can withstand a huge settlement and other costs growing out of potential legal woes, lawyers said it faces an even tougher issue. "It's not a question of money, but of the credibility of the firm," said Stephen Younger, a partner at New York's Patterson, Belknap, Webb & Tyler, adding that Andersen's future will be affected by the departures of clients and its own employees. Dozens of class-action suits filed by Enron employee benefit plans and outside investors who bought artificially inflated Enron stock are piling up against Andersen mostly in Houston federal court. The Chicago-based Andersen has come under fire for approving accounting practices that enabled Enron to use hundreds of partnerships to hide debt or generate questionable profits. RACKETEERING LAWS As recently as Wednesday a suit was filed by Enron employees alleging Andersen and Enron officials broke federal racketeering laws. The suit alleges the defendants conspired to hide Enron's true financial condition by withholding critical information, causing employees to lose more than $1.3 billion from their retirement funds. Lawyers expect the cases will be certified as class actions and consolid
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