The Arthur Andersen employee in charge of the Enron audit, who was fired on Tuesday, was yesterday co-operating "fully" with congressional investigators of the company's collapse, his lawyers said. Congressional sources say he has not sought immunity from prosecution.
Mr David Duncan, who was said by his former employers to have organised the destruction of documents in Enron on October 23rd after hearing of a Securities and Exchange Commission (SEC)investigation into Enron, had done nothing wrong and "followed the instructions of an Andersen in- house lawyer in handling documents", a statement from the law firm of Sullivan & Cromwell said.
The House Energy and Commerce Committee, whose staffers were anticipating a more forthcoming approach from Mr Duncan now that he no longer works for Andersen, yesterday also made contact with the author of the internal Enron memo which warned last August of the danger that "we will implode in a wave of accounting scandals". Ms Sherron Watkins confirmed her willingness to testify at the committee.
She told a Houston TV station yesterday that she had sent the memo because "I thought Ken Lay ought to know the facts and look into them". Mr Lay was "concerned" when he listened to her, she said. Mr Lay had ordered an inquiry into her claims by the company's lawyers, but instructed them not to second-guess the accountants.
The White House yesterday continued to deflect journalist demands for details of contacts over the last six months between Presidential staff and the failed firm. Mr Bush's spokesman, Mr Ari Fleischer, said while he would respond to specific allegations, such requests were "a fishing expedition" which he would not facilitate.
He insisted Mr Bush wanted to see investigations into the collapse pursued to the bitter end, even if that resulted in criminal charges.
Meanwhile, lawyers for former Enron employees have claimed that the company has contributed to exacerbating massive employee losses by misleading them over the length of the period during which they could not sell Enron stock in their pension accounts. As the stock plummeted in October, employees believed they were legally prohibited for a month from selling stock as the company changed the pension plan's trustee.
In fact, the prohibition lasted only a week - but the company failed to notify staff of its error.
As federal agency and congressional investigations into Enron widened, Senator Patrick Leahy, the Democratic chairman of the Senate Judiciary Committee, asked the head of the Justice Department's probe to step aside. The Deputy Attorney General, Mr Larry Thompson, who is leading the criminal investigation, was a partner in a law firm, King and Spalding, that has represented Enron. The Attorney General, Mr John Ashcroft, has excused himself, as he received Enron donations for his Senate bid in 2000.
In New York, bankers JP Morgan Chase reported a big loss for the fourth quarter of last year, in part because of bad loans to Enron. JP Morgan's results were below analysts' estimates. Citigroup, another Enron creditor, is set to take a hit when it reports earnings today.
