Enron Corp. - University of California | Office of The President

according to the Justice Department, "tons" of documents throughout its U.S. and London offices
related to its Enron audits and consulting engagements. On 3/14/02, a federal grand jury indicted
Andersen on charges of obstructing justice in the Justice Department's probe of Enron's collapse.
The indictment charged that, during 01, Andersen in its Houston, Chicago, Portland and London
offices, knowingly persuaded Andersen employees to withhold records from regulatory proceedings
and alter, destroy and shred documents with the intent to impede an official investigation.
963. When Andersen's document destruction first came to light, Andersen's executives
scrambled to portray the destruction as an isolated incident in its Houston office or even a few
Houston partners. Nothing could be further from the truth. Document destruction at Andersen is
deeply ingrained in Andersen's professional culture. From the day a young college recruit begins
work at Andersen as an auditor, and throughout his or her entire career, document destruction or, to
use Andersen staffers' clever euphemism, "complying with the firm's retention policy," is a mantra
that is formally taught and formally and informally enforced by policy and practice at every turn
throughout an auditor's career at Andersen. Indeed while Andersen has a professional responsibility
to retain and preserve documents and information to support and defend the conclusions and work
performed during its audit and review services, Andersen's formal and informal document
destruction practices are driven by an overwhelming mission to insulate itself from potential legal
exposure and outside scrutiny when its audit work comes under fire. Often in practice, Andersen's
duty to maintain and preserve documents under professional standards is directly at odds with its
overwhelming desire to "not retain" evidence that could, in the event of litigation, reveal that it failed
to perform a proper audit. In 98, Andersen's formal and informal document destruction policies were
taken to new heights as a result of costly and embarrassing revelations that Andersen was implicated
in its client Waste Management's accounting scandal. As particularized at 919, that year, in
- 611 -