Investigators recovered more than 29,000 electronic files and e-mails deleted from Arthur Andersen computers before a federal inquiry began, a FBI agent said yesterday. Ms Paula Schanzle, an FBI white-collar crime specialist believed to be the last prosecution witness in the obstruction of justice trial against the audit firm, said the documents filled 26 boxes after being recovered and printed.
Andersen is accused of destroying tonnes of paper documents and thousands of electronic files from its client Enron to hide its role in accounting irregularities at the energy firm before its meltdown last year.
Prosecutors contend the Chicago-based accounting firm was seeking to destroy information because it feared further disciplinary action from federal regulators, which had already placed Andersen on probation for earlier sloppy accounting. Ms Schanzle also testified that Andersen partner Mr Thomas Bauer was unco-operative during questioning by authorities, but that other staff at Andersen's Houston offices interpreted his remarks as an order to destroy Enron documents.
She said two other Andersen staffers had asked Mr Bauer about their priorities in the jobs and that Mr Bauer "said that it was very apparent that they needed to get into compliance with the firm's document retention policy". Andersen's defence is based on the assumption that documents were routinely destroyed under this policy, although prosecutors argue that the anticipation of a probe into Enron prompted a flurry of activity at the audit firm.
Mr Bauer's staff interpreted his comments as instructions to destroy paper documents and electronic files related to Enron, Ms Schanzle testified. Prosecutors were expected to rest their case later last night, setting the stage for motions to dismiss the case and a limited defence presentation in a trial expected to conclude next week.
Andersen's worldwide network has unravelled since its indictment earlier this year, and it has lost most of its major publicly traded audit clients. But a conviction would likely prevent any effort to reorganise the firm.
