Enron Whistleblower Alerted Andersen Too

ByABC News
January 16, 2002, 11:34 AM

Jan. 16 -- The Enron employee whose August letter to CEO Kenneth Lay warned of potential "accounting scandals" at the energy company also disclosed her concerns to officials at accountant Arthur Andersen at the same time, ABCNEWS has learned.

On Aug. 20, two days before Sherron Watkins met with Lay face-to-face to warn him about suspected financial irregularities at the now-collapsed energy trader, she called a friend in senior management at Arthur Andersen's Houston office and discussed her concerns.

A meeting of Andersen's top Houston-based officials followed, according to congressional officials looking into the matter. The meeting included David B. Duncan, Andersen's chief auditor for Enron, who was very publicly fired by Andersen on Tuesday.

A resulting Andersen memo described Watkins' concerns as serious, but the accounting firm did not take immediate action.

Fired Accountant Talks on Capitol Hill

For his part, Duncan, a day after being fired, told congressional investigators his side of the story today.

Duncan was dismissed by Andersen after it was discovered that thousands of documents pertaining to the collapse of Enron had been shredded and destroyed last fall by workers reporting to him.

This afternoon, Duncan was interviewed by investigators on the staff of the House Energy and Commerce Committee, which has taken an increasingly prominent role among the half-dozen congressional panels looking into the Enron affair.

Some congressional sources described Duncan as cooperative and said he did not ask for immunity from prosecution. But the Democratic spokesman for the committee said investigators "were disappointed by the limited nature of Mr. Duncan's memory," adding, "we expect documents and other witnesses to fill in the blanks."

Before today's session on Capitol Hill, Duncan's legal representatives released a statement on his behalf today saying, "Mr. Duncan is continuing to cooperate with all investigations of this matter and he looks forward to full disclosure of the truth."