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Former Andersen Partner to Plead Guilty to Obstruction

Aired April 09, 2002 - 13:35   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: A new development in the case involving Enron and Arthur Andersen. The justice department says David Duncan, the former Andersen partner who admitted to shredding Enron documents, will plead guilty to obstruction, and he is expected to testify against Enron. Allan Chernoff of CNN Financial News joins us with more on this. Hi, Allan.

ALLAN CHERNOFF, CNN FINANCIAL NEWS CORRESPONDENT: Hi, Kyra. Well, if we go back to the beginning of this entire Andersen/Enron mess, in fact, it was Andersen pointing to David Duncan, the partner of Andersen who had been in charge of the Enron audit, and that is the person who Andersen said was responsible for all the shredding, all the deleting of documents. That may come back to haunt Andersen.

As you see this morning at U.S. district court, David Duncan walked inside, and this afternoon, at 3:00 Eastern time, he is expected to appear before a judge there and plead guilty to obstruction of justice. Let's read to you now from the criminal information as the lawyers do refer to it. It is going to say David Duncan did knowingly, intentionally and corruptly persuade and attempt to persuade other persons to withhold records, documents and other objects from an investigation by the Securities and Exchange Commission.

Now Duncan all along has maintained that he was merely following orders, that it was Andersen attorneys based in Chicago who were directing the Houston office to follow the company's document retention program. And within that document retention program, it does say that the firm is to delete non-essential documents. So, in fact, he has told investigators he was just listening to conversations and also e-mails from an in-house attorney named Nancy Temple. It is likely that Duncan will be a big help to the department of justice, which as you know, has charged Andersen, the entire firm, with obstruction of justice.

Duncan now will continue cooperating with the prosecutors, and this is how it always works this these cases. Of course, the prosecutors try get the cooperation of a small fish in order to land the big fish. Thus far, Andersen itself has not been willing to plead guilty. A trial date is set for May 6 before Judge Melinda Harmon -- Kyra.

PHILLIPS: And we will be following it. Allan Chernoff, thank you. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com