House Panel Schedules Hearing in Enron Probe

Vowing to issue subpoenas if necessary in the Enron Corp. affair, a House panel hopes to get the conflicting stories of the company's accounting firm and the auditor it fired for the destruction of thousands of documents.

Arthur Andersen chief executive Joseph Berardino said the firm's lead auditor on the Enron account, David Duncan, displayed "at the least ... extremely poor judgment" for his part in discarding documents last October and November.

Duncan has told investigators he was simply following the advice of Andersen's legal department when he directed the shredding.

The House Energy and Commerce subcommittee on oversight and investigations has scheduled a hearing for Thursday.

The tentative witness list includes Duncan, legal department attorney Nancy Temple and Berardino or another top-ranking Andersen official.

It was uncertain whether Duncan would appear voluntarily.

"We have made it clear that we'll be prepared to subpoena any reluctant witnesses," said Ken Johnson, spokesman for the Energy and Commerce Committee.

Johnson would say only that "a number of people have approached the committee about immunity" from prosecution, "but we have not offered it to anyone, nor have we seriously considered it up to this point."

"We're very interested in finding out where Andersen is in its internal investigation" of the Enron controversy, "and we want to examine administrative and disciplinary actions taken in the wake of the disclosure that documents were destroyed," Johnson said.

Temple, a lawyer at Andersen headquarters in Chicago, e-mailed a copy of the firm's document destruction policy to the Houston office where Duncan and other accountants worked on the Enron account.

Temple sent the e-mail just four days before Enron announced more than $600 million in third-quarter losses. At the same time, the energy company also took the first step to fully disclose details of partnerships that had kept hundreds of millions of dollars in Enron debt off the company's balance sheet.

Appearing Sunday on NBC's Meet the Press, Berardino defended Temple's sending the e-mail, saying "Nancy just told people to use their judgment. She did not instruct them to do anything, to my knowledge."

According to congressional investigators, Duncan said last week that general discussions began at Andersen in September about what Enron-related documents to discard.

"It was unusual" to emphasize the document-destruction policy, Duncan told the investigators, according to congressional sources familiar with what he said. The sources spoke on condition of anonymity.

Asked why Temple reminded the Houston office of the policy to do away with some documents, Berardino replied, "Because accountants are pack rats ... We save lots of stuff that's not relevant."

Asked about the timing of Temple's e-mail, Berardino said "we were in the process of putting our files together to make sure that all of the third-quarter events were properly documented in our work papers."