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American Morning

New Accusations of Document Shredding at Enron

Aired January 22, 2002 - 07:18   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.
JACK CAFFERTY, CNN CORRESPONDENT: The other big story, of course, new accusations of document shredding at Enron have surfaced just as a federal judge in Houston is set to hold hearings this morning on an injunction to get accounting firm Arthur Andersen to stop destroying Enron related documents.

According to a former Enron employee, documents were being systematically shredded at the company as late as last week. Maureen Castaneda, who's part of a shareholder lawsuit against Enron, told ABC News the shredding began in late October after the SEC began their investigation into the company's accounting practices.

CNN's Ed Lavandera joins us now with more in a live report from Houston -- Ed.

ED LAVANDERA, CNN CORRESPONDENT: Good morning, Jack.

The attorneys in this case sat down with reporters late last night inside a 19th floor posh downtown Houston hotel room, showing off what they say are those shredded documents that Maureen Castaneda witnessed being shredded inside the Enron building. They say that over the last 12 weeks they've talked with several dozen witnesses here at Enron who say that they did witness this shredding of documents in the finance and accounting department. Maureen Castaneda worked in an office just across the hallway from this department.

They say the shredding started heavily after Thanksgiving and it continued in through Christmas and into, as you said, last week. And this, of course, if this indeed is true, happened well after the federal investigators started taking over in this case and issued subpoenas in efforts to claim much of these documents.

Enron spokespeople say that they have issued several e-mails telling all employees not to tamper with any documents whatsoever and to preserve every material that they can get their hands on, as well. But the attorneys in this case aren't convinced by what Enron is saying.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It is an absolute smoking gun. You've got, the auditor said we destroyed thousands of pages of documents. They've admitted that. The company now can't get around the fact that in the face of three directives not to do it, personnel were directed to do it because the personnel that were doing this clearly wouldn't have acted unilaterally.

(END VIDEO CLIP)

LAVANDERA: We spent some time last night looking at some of those shredded documents and trying to find any kind of evidence ourselves. The attorneys say that in many of these slices of paper that you can see the names of Raptor and Jedi, which, of course, are the names of these partnerships that have become infamous for bringing down Enron.

We were only able to find one slip of paper that had Raptor on it, but they, indeed, say that this is the only box that they do have but that they do fear that hundreds of thousands of documents, there are witnesses that say that they saw this as a systematic shredding of documents over the course of the last month and a half and they say that they're, even though this is the only box that they do have, that there is much more out there that has been shredded -- Jack, back to you.

CAFFERTY: Ed, thank you.

Ed Lavandera live in Houston this morning.

Coming up in the next hour of AMERICAN MORNING, the woman who blew the whistle on Enron. Maureen Castaneda says the company was shredding documents right up until last week. Also, a family struggling to survive after Enron left them out in the cold.

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