Arthur Andersen LLP's chief auditor on its Enron account in has agreed to plead guilty and cooperate with prosecutors in Houston pursuing a document shredding case against the beleaguered accounting firm, a person familiar with the case said.
David Duncan, who was fired in January shortly after Andersen acknowledged massive shredding, was expected to plead guilty Tuesday to a single obstruction count and become a cooperating witness.
The plea was expected to be entered in US District Court in Houston, according to the source, who was speaking on condition of anonymity.
Duncan's attorney, Robert Giuffra, said late Monday that he had no comment on word, initially reported by the Washington Post and the New York Times, that his client was ready to plead guilty.
"As we have said from the outset, Mr. Duncan is continuing to cooperate with the government's investigation of this matter," Giuffra said.
A grand jury indicted Andersen on March 7 on a single count of obstructing justice, accusing the firm of destroying ``tons of paper'' at offices worldwide and deleting enormous numbers of computer files on its audits of Enron.
At times, the government said, the shredding was so fast-paced that employees worked overtime and shredding machines couldn't keep pace. The indictment was unsealed March 14, and Andersen has pleaded innocent.
Court documents also have disclosed that a second grand jury was empaneled March 27 in Houston to investigate the collapse of Enron. The court papers said the grand jury ``is proceeding with appropriate investigative steps.''
The accounting industry has been under scrutiny since Enron's bankruptcy on Dec. 2, the largest corporate failure in US history, and several legislative proposals have been circulated in Congress. The Securities and Exchange Commission is pursuing a civil investigation of Enron and Andersen.
Duncan is believed to be the first person in the case to have struck a deal with prosecutors.
Lawyers for Andersen met Friday at the Justice Department to negotiate a settlement, but no deal was reached.
It was unclear whether future settlement meetings were planned immediately.
The charge against Andersen is set for trial on May 6.
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