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Arthur Andersen pleads innocent to criminal charges in connection with Enron

By Sylvie Dale, Online Editor

March 20, 2002 — Enron’s former auditor pleaded innocent Wednesday to criminal charges of obstruction of justice by shredding documents and deleting files containing the failed energy giant’s financial records.

Arthur Andersen’s trial date is set for May 6, according to the Associated Press. U.S. District Judge Melinda Harmon has honored Andersen’s request for a speedy trial with a promise that it will only last three weeks.

While Andersen has not denied that some document destruction happened after Enron’s problems came to light, the company is expected to argue that the destruction of documents and files was limited to the actions of a few people rather than a corporate-wide directive.

Immediately after the Justice Department’s indictment of the auditing company was unsealed last week, several longtime clients of Andersen’s hired new auditors.

Northeast Utilities was among Andersen’s defecting clients, and the federal government banned any new contracts with Enron or Arthur Andersen until investigations are complete. (Electric Light & Power online, March 15 and March 18. On Tuesday, Dynegy switched to PriceWaterhouseCoopers LLP.

According to the indictment, Andersen management officials held a conference call in which they discussed the upcoming SEC inquiry of Enron, then used trunks to haul paper from the auditor’s offices in the Enron building with the intention of shredding them, AP reported.

In response, Andersen said the allegations are vague and fail to identify any management by name. The company will have to face dozens of lawsuits as the trial gets under way.