WASHINGTON – The fired top Andersen accountant who oversaw the firm's audits of Enron Corp. has agreed to plead guilty to obstructing justice and to cooperate with the U.S. Justice Department investigation into the energy firm's collapse, sources close to the case said Tuesday.
They said David Duncan would enter the guilty plea at a hearing, tentatively scheduled for later on Tuesday in the U.S. District Court in Houston, to one count of obstructing justice by destroying Enron records.
As part of the plea deal, Duncan would cooperate with the Justice Department investigation, providing prosecutors with a potential key witness in their case of obstruction of justice against Andersen and in any future cases against Enron or its former executives, the sources said.
Duncan's plea deal would be the first to be entered in court as part of the Justice Department investigation announced three months ago into the fallen energy giant -- the largest-ever U.S. bankruptcy.
The first criminal case brought as part of the investigation involved Andersen, which has entered a plea of not guilty to charges of obstructing justice by shredding Enron-related documents.
A start date for the trial has been set for May 6, and Duncan's plea agreement puts new pressure on Anderson to admit responsibility, the sources said.
Duncan's attorney Robert Giuffra said of his client, "He's continuing to cooperate with government investigations of this matter." He declined further comment.
Duncan was dismissed in January and soon after refused to testify before congressional committees investigating Enron.
His former employer initially alleged he had orchestrated a massive campaign to destroy thousands of Enron-related records in October after learning of a federal investigation into the then-reeling energy concern.
That changed on March 14, when the Justice Department unsealed an obstruction of justice indictment that charged the firm itself with destroying tons of records.
Since then, Andersen lawyers have sounded a conciliatory note in public statements, saying Duncan may have exercised poor judgment but did nothing illegal.
Andersen attorney Rusty Hardin said he would be surprised and disappointed if Duncan were to plead guilty and cooperate with prosecutors.
"He's always told us he didn't do it," Hardin said.
The indictment has very nearly sent Andersen the way of Enron, as its worldwide partnerships have broken up. The firm announced 7,000 U.S. layoffs Monday, already eclipsing the roughly 4,500 U.S. Enron workers who lost their jobs in the energy trader's collapse.
An internal Enron inquiry has alleged its executives got rich while manipulating its financial results through a vast web of off-the-books partnerships designed to hide losses and deceive investors.
Enron, which filed for bankruptcy on Dec. 2 and prompted dozens of investigations, has not been charged so far. Nor have any of its executives.
Andersen and Enron severed longtime ties after Enron's collapse, long after it became clear that each would blame the other for the debacle.