HOUSTON – The executive assistant of Arthur Andersen LLP's lead Enron Corp. auditor sobbed Friday as she testified about the day she learned from a news release her boss, David Duncan, had been fired after revelations of document destruction at the firm.
Shannon Adlong, Duncan's aide since her 1996 arrival at the firm, cried as she recounted her former boss' final days at the accounting firm. She was summoned from lunch Jan. 15 back to her office, where she read the release Andersen issued essentially blaming Duncan for improper document destruction.
"So I called (Duncan at) his attorney's office and we talked about it and he said nobody did anything wrong, he didn't do anything wrong and nobody on the (audit) team did anything wrong and that he doesn't understand and for me not to worry about it," said Adlong, 32, who left foundering Andersen earlier in May, then began sobbing.
Andersen attorney Rusty Hardin promptly passed the witness and court recessed for the weekend, leaving the image of the saddened secretary on jurors' minds until testimony resumes Monday.
Duncan testified earlier in the 4-week-old obstruction of justice trial he didn't think he did anything wrong when he directed employees to comply with the firm's document retention policy, which calls for the shredding of unnecessary material. After several interviews with prosecutors and his own "soul searching," he said he realized he committed a crime and pleaded guilty April 9 to obstruction and promised to help prosecutors.
In the days before his termination, Adlong said Duncan seemed mystified about the turn of events, including Enron's collapse and Andersen's entanglement in a budding document destruction scandal.
Earlier, Adlong told jurors she independently instructed fellow executive assistants to catch up with shredding duties more than a week before the government alleges Duncan engaged in a conspiracy to destroy documents.
The subject came up in an executive assistants' meeting Oct. 14. Prosecutors allege the rank-and-file of the Enron audit team weren't told to comply with the firm's document retention policy until Oct. 23 and afterward.
"I just told (fellow secretaries on Oct. 14) if they didn't have time to do it, they should box it up and send it to (the main Houston office)," Adlong said.
Evidence has shown in-house Andersen lawyer Nancy Temple sent an e-mail to Houston on Oct. 12 suggesting the Enron team comply with the document policy. Duncan testified he largely ignored it until Oct. 23, although some others were aware of it earlier.
Adlong, who dealt with Duncan daily, said she didn't know about the renewed focus on the policy until attending a meeting on the morning of Oct. 24.
Duncan spent about 15 minutes flagging documents -- piled to nearly a foot high -- for destruction before returning to his auditing duties, Adlong said. He testified it took an hour or more.
Most of the stack destroyed consisted of college recruiting materials and Enron annual reports, board meeting books and press releases that readily were available elsewhere, Adlong said.
Adlong also testified Andersen's technicians told Duncan to trim his database because his computer was crashing and working too slowly. Adlong said she had to show Duncan how to purge his electronic files.
As for whether the top-level partners on the Enron account ever visited the shredder, Adlong said, "I don't even think they knew where it was."
There was "no rush" to the document cleanup effort, Adlong added, calling it "normal admin" that required no overtime by her secretarial colleagues. Other Andersen employees have testified they spent a minimal amount of time last October and November cleaning up files.
The government contends Temple's reminder to comply with the policy is the basis of a silent conspiracy within Andersen to destroy potentially
Prosecutors contend in October Andersen suddenly promoted its document retention policy -- which calls for destruction of extraneous material -- to eliminate potentially damaging documents as the Securities and Exchange Commission began eyeing Enron.
Andersen claims employees adhered to a policy that stressed retention of final papers supporting audit conclusions while discarding unneeded material.
The document destruction effort tapered off after about a week, Adlong said. She issued an urgent "No More Shredding" e-mail to Enron audit team members on Nov. 9 when Duncan forwarded her a voice mail from Temple notifying him of the subpoena.
Adlong went as far as unplugging the shredder.
"Not exactly what you've read and heard, is it?" Andersen attorney Rusty Hardin asked rhetorically, prompting a quick objection from prosecutor Sam Buell, who later asked to adjourn for the day rather than immediately cross-examine Adlong.
Drama built in the jury room, too, as U.S. District Judge Melinda Harmon revealed a juror sent a note worrying another juror might intentionally hold up deliberations in retaliation for a third juror's consistent lateness in arriving each morning. The judge and lawyers could not immediately agree on a proper solution to the conflict.
Friday morning, an in-house Andersen adviser testified to friction between his colleagues and the Enron team over the energy trader's frequent attempts to push the bounds of generally accepted accounting principles.
John Stewart, on the stand for a second day, said there was "a lot of debate, discussion, argument," between the firm's Houston-based auditors and his Professional Standards Group of internal consultants.
"At some points we tired of it and couldn't get to the view (Enron) wanted to take," Stewart said.
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