Jury wouldn't have convicted Enron auditor

Monday, June 17, 2002

HOUSTON -- The testimony of former Enron auditor David Duncan helped a jury convict Arthur Andersen of obstruction of justice, but the same jury said it didn't believe in Duncan's guilt, even though he entered a guilty plea earlier this year.

On the witness stand, Duncan denied any overt efforts to destroy documents related to now-bankrupt energy-trader Enron, shed little light on Enron's accounting, and defended his maligned work checking Enron's books.

"We couldn't have paid him to be a better witness," lead Andersen attorney Rusty Hardin said after Duncan finished testifying last month.

Yet a small segment of Duncan's testimony, which had little to do with his own actions, swayed the jury toward a verdict of guilty Saturday.

The conviction means Andersen faces probation and fines of at least $500,000 when the sentence is delivered Oct. 11.

According to jurors, the knockout blow came May 14 when Duncan testified that in-house attorney Nancy Temple told him to remove a sentence and her name from a memo regarding Andersen's take on Enron's Oct. 16 earnings release, which was rife with bad news.

"I believed it was misleading from a personal standpoint," Duncan said.

The same day, the first of four full days he spent on the witness stand during the six-week trial, Duncan recounted how he ordered employees on Oct. 23 to comply with the firm's document retention policy, which calls for organization of important documents and destruction of extraneous material.

He pleaded guilty to obstruction of justice April 9 and agreed to cooperate with the government in exchange for immunity for other possible crimes and the recommendation of a light sentence.

Names crossed off list

But if this jury had tried him, panelist Jack Gallo said, Duncan wouldn't have been convicted.

"We had five up there and crossed them through with a line as we got down to one," Gallo said.

One of the names crossed out was Duncan's, despite his own admission and a guilty plea that was spelled out painstakingly for jurors.

Jury foreman Oscar Criner, who was the last holdout before the panel delivered the verdict after 10 days of deliberations, called all the evidence regarding mass shredding and e-mail deletion "largely superficial and largely circumstantial."

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