HOUSTON — The in-house lawyer at the heart of the government's obstruction of justice case against Arthur Andersen LLP isn't around to testify, so prosecutors have summoned an FBI agent to give her a voice.
Barbara Sullivan, head of the FBI's securities fraud unit in San Francisco, spent Monday on the stand reading reams of notes, documents, transcripts and other pieces of evidence into the record as the trial moved into a third week.
Of particular interest were notes taken by Andersen attorney Nancy Temple during a flurry of conference calls as accountants and auditors discussed daily the mounting problems of massive client Enron Corp.
On Oct. 9, Temple noted a Securities and Exchange Commission investigation was "highly probable" and could lead to problems for Andersen, which agreed to a form of probation with the agency last summer after audit failures on Waste Management Inc.'s books.
Temple sent an e-mail to Andersen workers three days later reminding them about the firm's document retention policy, which calls for destruction of unnecessary documents. The government contends it was essentially an unspoken order to obliterate Enron-related material.
Prosecutors point to Temple's notes as evidence the Chicago-based firm was conscious of possible SEC interest — an informal inquiry already was under way unbeknownst to them — and was desperate to avoid another audit failure because of its probation.
The firm contends the order to follow the document retention policy was an innocent effort to organize papers, e-mails and computer files and get rid of extraneous material.
Before the Temple e-mail was sent, Houston-based Andersen partner Michael Odom was videotaped Oct. 10 instructing audit team managers to follow the document retention policy, saying it was OK to destroy documents until litigation is filed.
Odom cited past cases during attorneys' discovery in lawsuits "where we found a lot of stuff we shouldn't have retained."
Odom has not testified, while Temple invoked her Fifth Amendment right against self-incrimination by mail earlier in the trial.
Last week, prosecutor Sam Buell said Temple was potentially a more important witness than David Duncan, the fired Enron audit team leader who pleaded guilty to obstruction and testified against Andersen all last week in a plea deal.
The call to adhere to the policy ended Nov. 9, the day Andersen received a subpoena for Enron documents. Shannon Adlong, Duncan's executive assistant, issued an e-mail to staffers that said, "No more shredding."
Andersen lead attorney Rusty Hardin told reporters after testimony concluded Monday it was ironic prosecutors were building a case about document destruction with documents the firm had saved and made an effort to save.
"They've either got to be the world's worst crooks or they were acting in good faith," he said of Andersen.
Also Monday, Thomas Bauer, an Andersen partner on the Enron audit team, invoked the Fifth Amendment by letter through his attorney. Bauer was in charge of auditing Enron's North American trading unit and was placed on administrative leave in January.