He has agreed to cooperate with the Justice Department’s probe into Arthur Andersen’s role in the destruction of Enron-related documents. By pleading guilty, Duncan acknowledges that he persuaded coworkers and others to shred documents to hinder the government investigation into Enron’s collapse.
According to the plea entered Tuesday, Duncan admitted he did “knowingly, intentionally and corruptly persuade and attempt to persuade other persons … to withhold records, documents and other objects from an official proceeding, namely an investigation by the Securities and Exchange Commission.”
The shredding took place between Oct. 23 and Nov. 9, 2001 just after the SEC announced it would open an investigation into the financial practices of the former energy titan.
Andersen fired Duncan in January for allegedly ordering the shredding of Enron files despite the company’s policies against document destruction. Andersen maintains its executives were unaware of Duncan’s activities and did not authorize its employees to withhold potentially damaging evidence in the Enron investigation.
Federal investigators are trying to determine which Arthur Andersen employees or executives participated in the document destruction. Duncan’s lawyer, Robert Giuffra, said his client would “continu[e] to cooperate with government investigations” and testify against Andersen, which was received the first criminal charge relating to the Enron collapse.
Duncan’s testimony against Andersen could hurt the accounting firm’s chances of settling its criminal and civil law suits.
Andersen’s trial is scheduled to begin May 6. Duncan, who is expected to testify in the case, is the first known person in the government’s Enron and Arthur Andersen probe to enter a guilty plea and cooperate with federal investigators.
Arthur Andersen’s attorney, Rusty Hardin, expressed the accounting firm’s disappointment of Duncan’s guilty plea, saying, “He’s always told us he didn’t do it.”
Meanwhile, as Andersen struggles to survive its recent loss of clients, the Big Five accounting firm announced yesterday it would lay off 7,000 of its 28,000 U.S. employees.