Ex-Andersen partner discussed Enron worries

HOUSTON -- A former Arthur Andersen LLP partner said Tuesday that he implicitly prompted his staff to shred Enron-related documents because he believed the Securities and Exchange Commission planned an investigation.

David B. Duncan, who was Andersen's chief auditor on the energy trader's account, also testified that he huddled with superiors after an Enron vice president related worries over some complicated transactions, but that the firm eventually accepted the word of Enron lawyers that everything appeared proper.

Duncan spent a second day on the stand in Andersen's obstruction of justice trial. The accounting firm is accused of destroying documents in advance of a possible SEC probe into Enron.

Duncan pleaded guilty to the charge April 9 and is cooperating with the government in exchange for mercy. Duncan said he did not explicitly order the mass shredding and deleting that was carried out by the company's audit team, but said he gave employees a reminder about Andersen's document retention policy that prompted them to shred documents.

He said he was unaware at the time that shredding the documents was illegal.

"I told them to not do anything more or less than follow the policy," said Duncan.