Ex Andersen Man Has 'Smoking Gun' Memo

During the fourth day of his testimony, David Duncan, a former partner at Andersen, also confirmed that he had retained the so-called 'smoking gun' memo authored by a senior Andersen employee who testified earlier in the trial.

Andersen lead attorney Rusty Hardin is to use the fact that the memos were preserved as proof that the firm did not engage in a systematic effort to cover up by destroying sensitive documents that related to the Enron audit.

Duncan has confirmed that he retained a memo written by Enron 'whistleblower' Sherron Watkins, which cautioned that the energy concern could 'implode in a wave of accounting scandals.' He also confirmed that he kept the 'smoking gun' memo authored by Andersen partner James Hecker, who alerted other partners to Ms Watkins' concerns.

Andersen fired Duncan in January and claims that it did nothing wrong in destroying certain Enron audit documents.