HOUSTON — An Arthur Andersen LLP accountant said shredding documents related to Enron Corp. audits was common because of the energy company's sensitivity to keeping its finances confidential.
"We were all required to keep a shred box at our desk because of all the information related to Enron," Patricia Grutzmacher, 32, testified Tuesday in Andersen's obstruction of justice trial. "Enron was very, very concerned about their confidentiality related to any information."
But she and other members of the Enron team rarely had time to weed out extraneous documents for shredding because of the high-profile client's constant needs for advice on deals, she said.
Grutzmacher was the first midlevel member of the Enron team to testify about record destruction after her former ultimate boss, David B. Duncan, instructed the staff on Oct. 23 to comply with Andersen's document retention policy, which calls for discarding extraneous material.
"I'm not telling you to go shred a bunch of documents or anything, but you need to make sure you're in compliance with the policy," Grutzmacher recalled Duncan saying. He also told workers a U.S. inquiry into Enron had recently started.
Andersen is charged with obstruction for destroying Enron-related documents and computer records after the SEC began its probe.
Duncan's instructions came 11 days after Nancy Temple, an in-house Andersen lawyer at the firm's Chicago headquarters, sent an e-mail to the Houston office that said it "might be helpful" to remind the Enron team of the policy.
Grutzmacher said she was too busy meeting Enron demands and didn't start sifting through her files until she talked to her immediate supervisor, Thomas Bauer, later that week.
Bauer, Temple and Kate Agnew, another accountant on the Enron team, have invoked their Fifth Amendment right not to testify.
"I remember feeling like I needed to get in compliance with the retention policy, that that was important," she said of her discussion with Bauer. She added that he told her whenever he discussed getting rid of documents, it only was in the context of the policy.