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Friday, 25 January, 2002, 01:40 GMT
Enron's political drama takes centre stage
David Duncan
Key witness David Duncan refused to testify
By BBC business reporter Lesley Curwen

Scandals in Washington all get shoehorned into the familiar mould of Watergate.

And the question that the US Congress wants to know was what did Andersen auditors know and when in the spectacular financial collapse of energy giant Enron, the largest bankruptcy in US corporate history.

But while the scandal has connections deep within the White House, the questioning on Thursday largely focused on the shredding of documents by Andersen, not on the political implications.

Enron's money was given to both parties, and Democrats and Republicans are working hard to outdo each other in appearing outraged at the collapse.

The company's fall has meant the loss of thousands of jobs, the evaporation of billions of dollars in market value and gutting of the retirement accounts of thousands of employees.

It was enormous political drama played out in the front of the world press.

Anti-climax

This was the first of what promise to be many hearings.

Political watchers, congressional staffers and the press packed into the ornate hearing room with its red velvet curtains and bright white walls.
Hearing room with press photographers
The hearing room was full to overflowing

The media were all pressed against one side, with photographers were crushed together on the floor taking endless photographs of the key players.

Reminiscent of Oliver North taking the oath during the Congressional investigation of the Iran-Contra scandal, Andersen auditor David Duncan stood stock straight and held up his right hand to swear to tell the truth, the whole truth and nothing but the truth, so help him God.

Republican Representative Jim Greenwood of Pennsylvania, chairman of the House Energy and Commerce's oversight and investigations subcommittee, opened the questioning of Mr Duncan with a stunning indictment as much as a query.

"Mr. Duncan, Enron robbed the bank. Andersen provided the getaway car. And they say you were at the wheel," Mr Greenwood said.

In response, Mr Duncan took his Fifth Amendment right under the US Constitution not to testify to avoid self-incrimination.

It was enormous drama and very much an anti-climax to a stunning question that really explained the roots of the case.

While it was largely expected, the flash bulbs all went off. The cameras were all trained on Mr Duncan.

Bipartisan grilling

There was bi-partisan grilling of the witnesses with the Democrats and Republicans trying to outdo each other during the one hour of opening statements and subsequent questioning.

"The event was either criminally stupid, or stupidly criminal, or both," said Representative John Dingell, the senior Democrat on the committee.
An attorney with a box of shredded documents
The committee wanted to make sure that no more documents were shredded

But Representative Greenwood would not be upstaged. At one point, he said, "Andersen's document retention policies might better be called document destruction policies."

The committee chose to focus on the shredding of the documents because they felt it documents were critical to the investigation, and reports allege that the destruction of documents, e-mail and voice-mail was continuing until very recently.

They wanted to send a clear message to both companies, Enron and Andersen, that it must stop.

This hearing was certainly only the beginning. There are no fewer than 11 investigations of Enron by congressional committees, not to mention ongoing criminal investigations and a lawsuit by Enron employees.

The real fireworks on Capitol Hill are expected at the testimony of Kenneth Lay, who resigned as the chief executive officer of Enron on the eve of the hearings.

See also:

24 Jan 02 | Business
Enron auditors quizzed
14 Jan 02 | Business
Audit giants called to account
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