Andersen Denies Coded Email

A senior partner at Arthur Andersen yesterday denied that an email asking staff to comply with the accounting firm's document retention policy was a coded message for the destruction of Enron papers.

The Andersen criminal trial moved into its second week yesterday with the continuing testimony of Amelia Ripepi, head of the accounting firm's professional standards committee.

The firm is on trial for obstruction of justice for allegedly shredding Enron documents to thwart a gov ernment investigation into the collapse of the energy firm.

Ms Ripepi said the now notorious email sent by in-house Andersen lawyer Nancy Temple in October reminding staff of the firm's policy on which documents should be kept, and which destroyed was an innocent reminder. "I did not take from her comments that it was an indication that someone ought to destroy something," she said.

In a letter on Friday Ms Temple invoked her fifth amendment right against incrimination but in congressional hearings in January, she denied that she had instructed anyone to destroy documents.

Ms Ripepi said on Friday that in a conference call, three days before the shredding is alleged to have begun, she had warned that problems with the Enron audit could result in disciplinary action against David Duncan, the former partner who ran the business from Andersen's Houston offices.

But Ms Ripepi's testimony was overshadowed by the expected appearance of Mr Duncan, star witness for the prosecution. Prosecutors hope the testimony of Mr Duncan, who has already pleaded guilty, will be the key evidence, believing they only need to prove that one employee deliberately destroyed Enron-related documents to keep them from the hands of investigators to convict the accounting firm.

But he needs to be shown to have acted in the interest of the firm. Andersen defence lawyers, led by the larger than life Rusty Hardin, had hoped to discredit Mr Duncan by showing that he had only pleaded guilty at the eleventh hour to protect himself.