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Andersen defense lawyers call first witness

Tuesday, May 28, 2002

HOUSTON -- An Arthur Andersen LLP executive testified Monday that a much-publicized memo concerning the disposal of Enron documents reflected good housekeeping, rather than a desire to get rid of incriminating evidence.

Richard Corgel said that an Oct. 12 e-mail sent out by Andersen in-house attorney Nancy Temple was not, as prosecutors have alleged, a tacit order to destroy documents.

"Nancy Temple gave advice as to what we should be retaining for purposes of documenting our conclusions," Corgel said.

The governments contends the firm deliberately shredded documents and deleted computer records related to Enron's audits last year as the Securities and Exchange Commission began investigating the bankrupt energy company's finances.

But Corgel testified that he never heard anyone give an order to destroy documents and that he would have questioned such a command.

Corgel was the first witness called by Andersen's lawyers as the accounting firm began its defense against charges it obstructed justice by destroying records.

His testimony came on the same day that the prosecution rested its case in the three-week trial. Andersen lawyer Rusty Hardin said he would draw from a pool of 12 potential witnesses for the defense, which he predicted would wrap up by the end of the week.

The trial did not break for the Memorial Day holiday on order of U.S. District Judge Melinda Harmon.

Earlier in the day, jurors heard from FBI agent Paula Schanzle, the last of 19 prosecution witnesses.

Enron mentioned

Schanzle acknowledged under questioning by Hardin that she personally examined "more than half" of nearly 30,000 deleted and recovered Andersen e-mails. She said the "vast majority" of the documents she examined "had something to do with Enron."

She previously told a grand jury the vast majority of the total were Enron-related. She testified Monday she hadn't been talking about the content of the e-mails.

Also Monday, Harmon denied the defense's request to dismiss the case for lack of evidence.

She said she would rule later on a request to quash mid-trial prosecution subpoenas for information regarding possible spikes in deleting e-mails on certain days last October. Prosecutors also want copies of actual work papers, or final documentation that accompanies finished audits, to determine what was deemed necessary to keep.

Defense lawyers maintain the analysis of spikes in e-mail deletions is unreliable because no one compared them to deletions on other days throughout 2001.

They also say prosecutors have had access for months to 500 boxes of work papers under guard at Andersen's Houston offices.


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