Fired Andersen auditor admits shredding Enron documents

The Arthur Andersen auditor who oversaw Enron's books has pleaded guilty in the US to ordering the shredding of Enron documents.

Former partner David B Duncan has agreed to cooperate with prosecutors in a deal that could break the scandal wide open.

He pleaded guilty to obstruction of justice, admitting he tried to thwart an Enron investigation by the Securities and Exchange Commission.

He is believed to be the first person in the Enron case to strike a deal with federal prosecutors.

Reading from a statement, he told US District Judge Melinda Harmon: "Documents were in fact destroyed so that they would not be available to the SEC."

The charge carries up to 10 years in prison and hundreds of thousands of dollars in fines. Attorneys did not release details of any agreement on the sentence. Duncan remains free until his sentencing on August 26.

Attorney Rusty Hardin, who represents Andersen, said Duncan had originally denied any criminal wrongdoing. He added that the firm was surprised and disappointed at his statement in court.

Mr Hardin said: "Arthur Andersen made the decision to terminate Mr Duncan last January based on his exercise of extremely bad judgment in this matter. We stand by that decision."

Duncan was fired by Andersen after the accounting firm acknowledged the large-scale destruction of documents and deletion of computer files related to the collapse of the company.

Under the plea bargain, Duncan is immune to any further prosecution related to the Enron case as long as he fully cooperates with federal authorities, which could include testimony at future trials, and agrees not to sell his story or otherwise profit from the debacle.