FBI arrives at Enron; records under guard

HOUSTON -- FBI agents arrived at Enron's headquarters Tuesday following allegations of document shredding, while shareholders suing the fallen energy giant asked a federal judge to bar the company and its former auditor from destroying any more records.

The FBI declined to comment, but Enron officials said the agents were on hand to talk with workers and check into the claims. It also said it has posted security guards to block employees from floors holding accounting and finance records.

"The company has done everything you'd expect under these circumstances," Enron attorney Kenneth Marks told U.S. District Judge Melinda Harmon.

In Washington, the White House disclosed that President Bush's mother-in-law, Jenna Welch, had invested in Enron and lost $8,100.

Bush, a friend of Enron chairman Kenneth Lay, said again that he had no intention of releasing details of Enron contacts with White House aides who developed his energy plan, saying if "somebody has an accusation of wrongdoing, let me know."

Congressional investigators also said they will subpoena senior officials at Enron's former auditor, Arthur Andersen, including the chief executive, to testify Thursday.

Enron slid into the biggest bankruptcy in U.S. history last month after investigators began looking at a series of complex partnerships that were used to keep hundreds of millions in losses off the books. Thousands of employees lost their jobs and their retirement nest eggs when Enron stock crashed.

Shareholders are suing Enron executives and directors over more than $1 billion they gained from selling Enron stock from 1998 through last November.

Company called feds

One of the shareholder attorneys, William Lerach, carried a box of shredded paper into court Tuesday, saying it came from a former Enron executive who saw Enron employees destroying documents as recently as last week.

"This is the shredded evidence that we got out of Enron," Lerach said as he entered court.

Marks, the Enron attorney, said company officials late Monday seized a trash can filled with shredded documents after learning of the allegations. The company said the FBI was called in at its request.

Arthur Andersen acknowledged earlier this month that its Houston office had shredded Enron-related documents. The office is now under a court order not to destroy any more Enron files.

Lerach said shareholders' attorneys want to inspect the auditor's remaining Enron-related documents and take depositions from top company personnel. Lerach said that plan would be presented to the judge today.

Arthur Andersen attorney Rusty Hardin told Harmon that the company has its Enron-related documents under guard.

"The shredding is over," he said.

The allegations that Enron employees were shredding documents at the 50-story headquarters were made public in a court brief released Monday by Lerach's law partner, Paul Howes.