In both cases, the SEC had access to Andersen's work papers, possibly leading to the firm's new document policy, first communicated to employees in May 2000.
When Odom spoke to accountants about the document policy on Oct. 10, he "explained to the group that in several recent lawsuits Andersen had had to produce documents that should not have been retained and that it was `embarrassing and extra work' for Andersen to be retaining any materials not required for the central files," the Andersen memo said.
"Odom then explained the policy does not permit document destruction when litigation is pending," the memo said. "But that if documents are destroyed and `litigation is filed the next day, that's great ... because ... we followed our own policy. And whatever there was that might have been of interest to somebody is gone and is irretrievable.'" On Oct. 12, Temple's e-mail reminded the audit team that it "will be helpful to make sure that we have complied with the policy," the memo said.
On Oct. 23, after the SEC made initial contacts with Enron, Duncan called staff meetings in Houston about the document policy, the memo said. Contemporaneous notes show that one meeting included "the directive `clean up -- documentation' followed by the explanation `SEC voluntary request/two suits filed, more on way,'" the memo said.
"It is possible," the memo said, "that Duncan still had this [Temple] e-mail in mind when he met with his audit staff 11 days later and urged them to take action to come into compliance with the firm's policy." Destruction of Enron documents intensified on that day, Oct. 23, with the shredding of 26 trunks of records and 24 boxes during the week, the memo said. The shredding continued the following week, although at a slower rate, and didn't stop until Nov. 8 when the SEC subpoenaed Andersen records.
In its rebuttal to the indictment, Andersen said staff in Houston shredded documents without approval from headquarters.
In testimony before a House committee in January, Temple denied she intended to prompt shredding of Enron records. "I did not instruct Mr. Duncan to shred documents," Temple said. She said she told Duncan's team "to retain the relevant documents."
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