Fireworks at Andersen Trial End in Judge Storming Off Bench

Tempers are flaring in the U.S. District Court in Houston where Judge Melinda Harmon has accused defense attorney Rusty Hardin of attempting to present evidence in an "underhanded" fashion.

Late last week, after the jury had been dismissed, Mr. Hardin discussed with Judge Harmon the possibility of attempting to introduce into evidence at Andersen's obstruction of justice trial a copy of a bill the firm sent to Enron last fall for services relating to Enron's Securities and Exchange Commission inquiry. Earlier last week, the Department of Justice had entered into evidence a copy of bill for such services. Mr. Hardin contends the bill was a draft and that the final bill, which he wanted to enter into evidence, was for significantly less money. Prosecutors objected, and Judge Harmon refused to let the bill be entered.

Judge Harmon told Mr. Hardin that he should have gone to the government immediately and corrected the matter rather than attempting to introduce the evidence during his cross examination of prosecution witness David Duncan. Mr. Hardin and Judge Harmon got into a heated argument. "I think this is the most underhanded thing I have ever seen," Judge Harmon said when asked by Mr. Hardin why she was getting so upset. "It's ludicrous, ludicrous to do this type of thing."

In his conversation with Judge Harmon, Mr. Hardin accused her of bias against the defense team and added, "For you to impugn my integrity and our effort, I deeply resent it."

"Resent away," was Judge Harmon's response as she stormed off the bench.

Duncan Testimony Ends

Former Andersen partner David Duncan, who headed the team for the Enron audit, spent most of last week on the witness stand, first testifying for the prosecution, then undergoing an extensive cross-examination by Mr. Hardin.

Mr. Duncan seemed to placate both sides of the courtroom during his appearance on the stand. By agreeing that he ordered the illegal destruction of documents he supported the prosecution theory that a crime was committed, and by stating that he did not understand the illegality of his actions at the time he gave the order to destroy documents, he lent credence to the defense contention that no crime was committed.

It appears that much of this case will turn on Mr. Duncan's state of mind at the time the order was given to destroy documents and the instructions that the judge gives the jury for interpreting that state of mind. The act of shredding documents is not a crime, but the destruction of documents with the knowledge that such documents will be required in an official investigation is an obstruction of justice.

The prosecution's case now moves into its third week.

Andersen: The Story So Far

Andersen: Updated List of Client Defections

Andersen Worldwide Network: Who's Going Where?

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Oct 22This webinar will include discussions of important issues in AU-C 800, Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.
Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.