Former Arthur Andersen auditor David Duncan — the lead auditor for Enron Corp. who previously admitted to ordering colleagues to shred key documents — has withdrawn his guilty plea, according to published reports.
Duncan pleaded guilty to one count of obstruction of justice for telling Andersen employees working on the Enron account to “comply with the Andersen document policy,” which was to destroy all drafts, memos and other work papers as soon as a project was complete, according to the Houston Chronicle. As a result, thousands of Enron documents were shredded by Andersen employees before they were seized by investigators.
According to the Chronicle, Duncan’s attorneys noted that that in his plea, Duncan did not admit that he knew he acted illegally when telling employees to comply with the shredding policy. His attorneys reportedly argued that Duncan understood only that telling his colleagues to follow the policy would mean destroying documents and making them unavailable to the Securities and Exchange Commission and others.
Duncan has been awaiting sentencing, which has been postponed a number of times, but now he most likely will not go to prison, the Chroniclespeculated. Bryan Sierra, a spokesman for the Department of Justice, told the paper that the Enron Task Force will not oppose Duncan’s motion because it does not believe it has the legal basis to do so.
Duncan was a key witness in the 2002 criminal trial of Andersen, which was convicted of obstruction of justice for its role in the Enron scandal. Earlier this year, the Supreme Court overturned that conviction.
In a separate court filing, the Justice Department moved to dismiss its criminal case against Andersen. The former member of accounting’s Big Five stated that the decision “represents an important step in removing an unjustified cloud over the professionalism and integrity of the people of Arthur Andersen,” according to the Journal.
Andersen’s conviction in 2002 all but put it out of business. It was unable to audit public companies, and today it has just 200 employees, mostly lawyers and administrators, according to Bloomberg.
“When weighing to question whether to retry this case, the question arises: Why would you charge a company that’s already defunct?” a Justice Department official told the Chronicle. “That and the Supreme Court decision and some other factors weighed very heavily against retrying this case.”