David Duncan, the Andersen accountant who headed the Enron audit, has pleaded guilty to obstructing justice and is co-operating with federal prosecutors in the hope of a reduced sentence. He now admits that he led the shredding effort in which huge quantities of Enron related documents were destroyed at the company's Houston offices just as government investigators were closing in, and that it was done 'intentionally and corruptly'. Duncan must now testify at any related court proceeding, which means he will become a key witness in actions against Enron.
Andersen itself - under attack on all fronts since both current class actions have been widened to include its worldwide and international offices - was charged with obstructing justice back in March. It hopes to reach a settlement on that charge, although insiders say the talks are stalled. In any case by the time the charge is heard there will be little left of Andersen to chase. The company (now headed by Aldo Cardoso) announced 7000 redundancies at the start of April. Plans for a worldwide merger with another 'big five' accountant, KPMG, were abandoned when major clients and Anderson affiliates overseas began signing agreements with other firms. The Hong Kong and China offices were the first to go, joining Pricewaterhouse Coopers, quickly followed by the Russian office, which merged with Ernst & Young. Other mergers have been completed by offices in New Zealand (Ernst & Young) Spain and the UK (both Deloitte & Touche), Middle East (Pricewaterhouse Coopers), central Europe (KPMG), Singapore, Poland and Norway (all Ernst & Young), and Brazil (Deloitte & Touche). In the USA, more than 100 accounts have been lost. The latest, software maker Oracle, has moved to Ernst & Young.
Plaintiffs taking action against the accountant in attempts to halt the breakup, fearing that it will have no assets left to fund compensation, seem so far to have been unsuccessful. Andersen itself has posted a strongly worded statement to the effect that involving the group's non-US members in US litigation would have no basis in law - the group's Swiss Societé Co-operative status allows its members to share common strategies without sharing financial obligations.
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