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Wednesday, 15 May, 2002, 22:07 GMT 23:07 UK
Enron auditor 'feared lawsuit'
David Duncan and Andersen logo
David Duncan, the government's star witness in the Andersen trial, has said fears over interpretation prompted him order the shredding of documents relating to Enron.

Mr Duncan, in his third day on the witness stand, said he took the decision to "protect the interests" of Andersen, which then employed him as head of the Enron account.

"Our work papers would be taken out of context, blown out of proportion," he said, appearing under cross-examination from Andersen's legal team for the first time.

Mr Duncan said he had feared that "extraneous" documents could be used against Andersen in lawsuits.

He only realised that he had broken the law after poring over legal textbooks, and admitted to his family in March that he thought he had committed a crime.

Mr Duncan, who had in January questioning claimed innocence, said his decision to admit guilt followed "a lot of soul searching about my intent and what was in my head at the time".

Shredding admission

Mr Duncan also repeated in court allegations that he had only acted after consulting with Andersen lawyer Nancy Temple.

David Duncan
Aged 43
Andersen employee for 20 years
In charge of Enron account since 1987
Salary in 2001: $700,000
Dismissed by Andersen in January
Pleaded guilty on 9 April
Maximum possible prison sentence: 10 years

The involvement of other senior Andersen employees in the document destruction, which hindered federal investigations into the collapse of Enron, is seen as central to the case.

Andersen stands accused of obstructing the course of justice, but has denied the charge.

Ms Temple's has also denied her involvement.

Mr Duncan, in evidence on Monday and Tuesday, outlined how he ordered the destruction of documents relating to Enron after the energy giant sought bankruptcy in December in the biggest corporate collapse in US history.

He has pleaded guilty to obstructing the course of justice in the hope of gaining leniency from the court, which could send him to jail for up to 10 years for the crime.

He will be sentenced on 26 August.

Legal specialist Gerald Treece
"At the beginning... I didn't see much of a battle here but I think the defence has made it a tussle"
See also:

14 May 02 | Business
Auditor 'saw Enron papers shredded'
14 May 02 | Business
Star witness turns heat on Andersen
06 May 02 | Business
Q&A: Andersen in court
06 May 02 | Business
The Andersen trial at-a-glance
05 May 02 | Business
Shredding for gold
02 Apr 02 | Business
Andersen-KPMG merger on the rocks
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