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CNN Live At Daybreak

First Day of Document Shredding Probe Gives Few Answers

Aired January 25, 2002 - 05:13   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: Turning now to the latest on the Enron collapse, a House panel has launched hearings into document shredding, one of several Enron related probes.

CNN Congressional Correspondent Kate Snow reports initial testimony was marked by dramatic exchanges and silence.

(BEGIN VIDEOTAPE)

KATE SNOW, CNN CORRESPONDENT (voice over): The panel's first witness, the man who seemed likely to have the most information, David Duncan, was Andersen's top partner on the Enron account in Houston.

REP. JIM GREENWOOD (R), PENNSYLVANIA: Did you give an order to destroy documents in an attempt to subvert governmental investigations into Enron's financial collapse?

DAVID DUNCAN, FORMER ANDERSEN AUDITOR: On the advice of my counsel, I respectfully decline to answer the question based on the protection afforded me under the Constitution of the United States.

SNOW: Duncan refused to testify, leaving current Andersen officials to do all the talking. They pinned the blame on Duncan, saying he had called a meeting last October and told others to use the shredder.

C.E. ANDREWS, ANDERSEN PARTNER: I agree that the action that took place on October 23rd and the subsequent elimination of e-mails and destruction of documents is an action that is totally inappropriate.

SNOW: Lawmakers wondered about the finger pointing.

REPRESENTATIVE CLIFF STEARNS (R) FLORIDA: Is Mr. Duncan being made a scapegoat here?

SNOW: But he wasn't the only one under fire. Attorney Nancy Temple wrote an October 12 e-mail about the company's policy on retaining documents. Duncan has told investigators he was following her advice. Temple was grilled on why she wrote that memo. Did she know Enron was being investigated? Did she know a whistle-blower had raised questions about the company's practices?

NANCY TEMPLE, ENRON ATTORNEY: To my recollection, I don't... UNIDENTIFIED REPRESENTATIVE: Just yes or no.

TEMPLE: ... recall seeing a letter from Ms. Watkins.

UNIDENTIFIED REPRESENTATIVE: Is that a no? So you're saying no, you did not know about Sharon Watkins' letter on October 23rd? You knew nothing about it? Is that your answer, that, no?

TEMPLE: I was aware that she had made allegations.

SNOW (on camera): After the hearing, investigators released another memo they said showed Andersen employees were encouraged to work overtime to destroy documents. Committee leaders believe up to 80 Andersen employees got the word to start shredding.

Kate Snow, CNN, Capitol Hill.

(END VIDEOTAPE)

COSTELLO: Did you watch any of the Congressional hearings yesterday afternoon?

CHAD MYERS, CNN CORRESPONDENT: I did.

COSTELLO: It was brutal, wasn't it?

MYERS: It was. I mean those guys really have their work cut out for them. And I hope someone really comes down and says this is really what happened and -- you can't say you're sorry because, right? But -- and this is why and we really get to the truth. Because those investors and those people that worked there really need to know the truth.

COSTELLO: Well, with some people not talking or refusing to talk, maybe we'll never get the answers.

MYERS: I'm afraid not.

COSTELLO: But at least they're making fools of them in public.

MYERS: Oh, well...

COSTELLO: I mean did you hear the questions? They were brutal.

MYERS: Sir, on the advice of my counsel and by the Constitution of the United States I'm not going to answer that question.

COSTELLO: Oh, well.

MYERS: Well, what else are you going to say?

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