Andersen fires Enron auditor
By MARCY GORDON
Associated Press

WASHINGTON — Arthur Andersen LLP said Tuesday it is firing a senior auditor who organized a “rushed disposal” of Enron documents last fall after federal regulators had requested information about the failing energy company.

It was the first time that the accounting firm has acknowledged that the document destruction occurred after Enron received requests from the Securities and Exchange Commission for information on its financial reporting.

Andersen also said that four partners in its Houston office would be stripped of management responsibilities and that three auditors had been put on administrative leave.

One of the four Houston partners, D. Stephen Goddard Jr., an Andersen managing partner, was a major fund-raiser for President Bush’s 2000 campaign and was one of the “Pioneers” who raised at least $100,000. He also personally contributed $1,250 to Bush’s earlier races for Texas governor, campaign finance records show.

Enron was Bush’s largest corporate contributor in the 2000 race.

The lead auditor, David B. Duncan, ordered the destruction of documents during an Oct. 23 meeting.

Two weeks later, in a desperate e-mail, his assistant said, “Stop the shredding.” A day before that, Andersen had received a federal subpoena for the documents.

The law firm of Sullivan & Cromwell, which is representing Duncan, said he is cooperating with investigators.

Andersen’s CEO, Joseph Berardino, did not rule out the possibility that wrongdoing reached higher into the accounting firm than the auditors being disciplined.

“We’re not quite sure yet,” he said in a telephone interview. “We want to make sure we have enough facts to make a call.”

The company said it is replacing the management of its office in Houston, where Enron is based. Four Andersen partners in the Houston office “have been relieved of their management responsibilities,” the accounting firm said.

The Chicago-based firm said it will fire any other employees found to have participated in the improper destruction of documents, which it disclosed last week.

Its statement said it had “discovered activities including the deletion of thousands of e-mails and the rushed disposal of large numbers of paper documents.”

The SEC has been investigating hisrole in Enron’s complex accounting, including questionable partnerships that kept about $500 million in debt off the energy company’s books.

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