Return to Transcripts main page

CNN Live At Daybreak

Many Enron Documents Destroyed

Aired January 11, 2002 - 06:15   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.
CAROL COSTELLO, CNN ANCHOR: And now to the monster fallout from the collapse of energy giant, Enron. The White House admits Enron officials sought the administration's help last fall, shortly before the company collapsed. Enron's chairman is a long-time major contributor to President Bush's career and to the Republican party. And Attorney General John Ashcroft has disqualified himself from the criminal investigation of Enron because of campaign donations he received from the company.

Adding to all of that, the company's accounting firm has revealed its employees destroyed documents sought in the investigation. For details on that, here's CNN Financial News Correspondent Allan Chernoff.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN FINANCIAL NEWS (voice-over): Four investigators from the House and Energy Commerce Committee arrived at Andersen offices in Houston yesterday to interview Enron auditors and collect documents. But they were told there's a problem. Thursday afternoon, Andersen admitted material was missing.

In recent months, individuals in the firm involved with the Enron engagement disposed of a significant but undetermined number of electronic and paper documents and correspondence relating to the Enron engagement. Potentially thousands of documents that were part of Enron audits, according to the House Committee. Most of them, electronic, that were deleted in September, October and November, the three months prior to Enron's bankruptcy filing.

FRANKLIN VELIE, FORMER FEDERAL PROSECUTOR: This is a surprising, though, and very disappointing development. You would not ordinarily expect a major loss of documents by an accounting or auditing firm with respect to the affairs of its -- of its client.

CHERNOFF: Securities and Exchange Commission Enforcement Chief Stephen Cutler said, "Destruction of documents is an extremely serious matter," which he pledged, "will be included within the scope of our investigation." As the company's auditor, Andersen had given a thumbs-up to Enron's financial statements. The SEC and Justice Department are investigating whether those very statements were used to hide Enron's financial condition from investors.

JOSEPH BERARDINO, CEO, ARTHUR ANDERSEN: If my firm has made errors in judgment, we will acknowledge them. We will make the changes needed to restore confidence.

CHERNOFF: Andersen has hired former Senator John Danforth to review the company's records management policy and ensure that remedial and disciplinary actions are taken.

(on camera): Next Wednesday, House investigators plan to meet with the Andersen partner in charge of the Enron audit. Said one committee staffer, "We plan to hold his feet to the fire."

Allan Chernoff, CNN Financial News, New York.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com