Government rejects Andersen proposal

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Posted 8:34AM on Saturday, April 27, 2002

HOUSTON - A federal judge Friday refused to delay the May 6 trial of accounting firm Arthur Andersen LLP on criminal obstruction charges for shredding Enron documents. Attorney Rusty Hardin, who had insisted on a speedy trial after Andersen was indicted in March, told U.S. District Judge Melinda Harmon his client has been hurt by media coverage and prospective jurors have formed negative opinions about the firm. ``I cannot overemphasize how unfairly we've been treated so far, not by the court, but by the court of public opinion,'' Hardin said. ``We do think that to protect our client we have to have some breathing space.'' But the judge said the May 6 trial date remained in place. ``I don't think Andersen will be in any different position in terms of publicity six weeks from now, six months from now,'' she said. Hardin said earlier Friday the government had turned down the accounting firm's proposal for a settlement but declined to provide any details of Andersen's proposal or the government's reasons for rejecting it. There was no discussion of settlement during Friday's court session. Justice Department spokesman Mark Corallo said only that the department had issued a response to the accounting firm. Andersen's request for a trial delay was opposed Friday by federal prosecutors, who said there was no reason why it should be put off. ``This is their day in court and they just don't want it,'' assistant U.S. attorney Andrew Weissman said. Hardin contended lawyers have examined hundreds of questionnaires from potential jurors and determined one-third of them believe Andersen is guilty. ``I don't want another panel,'' he said. ``I want an atmosphere that's not a hanging atmosphere.'' Hardin also cited recent published reports quoting unidentified sources close to the government's case divulging details and accused prosecutors of being the sources. Weissman denied the accusation. The judge said the court already had gone ``a long way'' in weeding out jurors who could not be fair or impartial in the case, said she expected jury selection to take one day and warned lawyers she wouldn't tolerate a long-winded jury selection process. Harmon previously has said she'll hold lengthy daily court sessions and continue the trial on weekends in order to complete it in about three weeks. Federal prosecutors had offered to defer any criminal prosecution of Andersen for up to three years, requiring the Big Five accounting firm to cooperate in the investigation of its former client Enron Corp. and to promise not to violate any laws during that period. Andersen had sent a letter to the Justice Department Wednesday laying out its position in response to the government's request last week. Andersen acknowledged massive shredding of documents and deletion of computer files related to Enron's audits last fall after the Securities and Exchange Commission began an investigation into the now-bankrupt energy-trading company. David Duncan, who was Andersen's senior auditor on the Enron account, has pleaded guilty to ordering the destruction of Enron documents and had agreed to cooperate with prosecutors. Chicago-based Andersen has been struggling for survival as it loses clients, employees and affiliates following its indictment by a federal grand jury last month. In addition to the federal charge, the Securities and Exchange Commission is pursuing a civil investigation of Enron and Andersen. Andersen also has been negotiating separately to settle civil lawsuits brought by Enron shareholders and creditors. Those talks broke off last week.