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Subject: Re: WAS: Austin Chapter hosts Workshop, NOW: Topics re: Destruction, etc.
From: Larry Medina <[log in to unmask]>
Reply-To:Records Management Program <[log in to unmask]>
Date:Mon, 2 Dec 2002 14:10:11 -0800
Content-Type:text/plain
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>*  The criminal prosecution of Arthur Andersen for
>destroying records
>
>While the bottom line in the prosecution may have been
>for destroying records, the real issue in this case
>was the IMPROPER destruction of records and failure to
>comply with laws and their own records retention
>schedule and written policies and practices, not
>simply "destroying records."  I think that many folks
>seem to forget what the issue was here, and the fact
>that because of what did take place, legislation like
>
>Larry, I don't recall anyone mentioning that Arthur Anderson had either
>Policies or retention schedules.  Just that the records were improperly
>destroyed, and failure to desist on destroying after notification was given.
>All other indictments stem from the improper destruction.


Well, naturally, the link is down now but they were on the web, both the
policy manual (specifically Policy #760) AND the retention schedule at the
time the case was pending.  A few of us saw them and asked specific
questions to individuals identified as ARMA members who were employed by
Andersen about them, quoting "testament and verse" and being told that yes,
they were in fact in-force documents at the time the alleged wrong doings
took place.  And if you look back to the testimony given in the case,
you'll find statements such as those below that make known there were such
policies, etc.:

<http://energycommerce.house.gov/107/hearings/01242002Hearing474/print.htm>

"The chairman has put it correctly. The document retention policy which we
have a copy of, vague in its language, can properly be described as a
document retention and destruction policy."

"I am hopeful that today's witnesses will be able to shed some light on
Arthur Andersen's ``document destruction policy'' \1\. Not a document
preservation policy.
--- \1\ Arthur Anderson had a policy known as the ``documentation
preservation policy'' that required their auditors to destroy all documents
not specifically related to their final audit report. Ms. Temple sent an
e-mail to Mr. Odom reminding him of this policy on Enron related documents.
---"

[The prepared statement of C.E. Andrews and Dorsey L. Baskin, Jr.
follows:]  Prepared Statement of C.E. Andrews, Global Managing
Partner--Assurance and Business Advisory, Andersen, and Dorsey L. Baskin,
Jr., Managing Director, Assurance Professional Standards Group, Andersen

"This understanding of proper audit practice was reflected in the Andersen
document retention policy in effect last fall, which provided that
documents other than work papers ordinarily should be disposed of when no
longer needed--but that such documents should be retained when litigation
has commenced or is threatened. Precisely when that occurs often will
require the application of informed judgment to the particular
circumstances of a given case, and that may well be a point on which
reasonable people can differ. It also may be a point that looks quite
different in hindsight than it did to people making decisions at the time.
Looking at this policy now, in light of recent events and with the benefit
of hindsight, we have to say that it is not a model of clarity--although
our guess is that, if the document retention policies of other large
businesses were subjected to the same close scrutiny, they likely also
would reveal ambiguities and questions about their application to
particular cases."

Larry

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