Jury is Selected for Andersen's Trial; Midwest Offices Sold
After a day of questioning, the initial pool of 106 potential jurors was whittled down to 16 - a jury of 12 plus four alternates. At stake is the reputation and probably the remaining life of what was until recently the fourth largest public accounting firm in the world.
The jury is composed of nine men and seven women. During the day Monday several potential jurors were struck from the pool for a variety of reasons. Many knew people who worked at Enron, and many knew current or former Andersen employees. Some jury candidates expressed anger over the Enron disaster, and some said they could not guarantee that they could be fair to Andersen.
Arthur Andersen LLP and the U.S. Department of Justice will face off with opening arguments today in the obstruction of justice trial that could not be settled out of court. The prosecution's lead witness, former Andersen partner and Enron audit supervisor David B. Duncan, will testify that he directed the destruction of documents while knowing that such documents would be the subject of a Securities and Exchange Commission investigation into Enron's bankruptcy.
At issue is whether or not Mr. Duncan's actions were illegal, and Andersen's attorneys will likely argue that the documents were not destroyed to keep them away from federal investigators but were supplementary documents of the sort that are routinely destroyed as a matter of practice by Andersen and other audit firms when an audit engagement has ended. "I don't think there's going to be any evidence in this case that people destroyed documents to keep them away from the police," said Rusty Hardin, lead attorney for the Andersen defense.
Andersen Sells Midwest Offices to Ernst & Young
In related news, Andersen announced on Monday an agreement has been reached to sell its offices in Detroit, Ann Arbor, and Grand Rapids, Michigan, and Toledo, Ohio to Big Five firm Ernst & Young.
"This transaction is consistent with the firm's plan to move forward as a smaller and different firm aligned with the reforms we have outlined, and the smaller scale of our client base," stated Andersen in its press release.
The transfer will involve 159 Andersen employees and 14 partners and principals. Specific terms of the agreement were not disclosed.