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Arthur Andersen defense attorney Russell “Rusty” Hardin Jr. contends rulings by the federal judge overseeing his client’s obstruction of justice trial make it hard to get the root of his case before the jury — that Andersen didn’t destroy Enron Corp. documents with the intent of keeping the information away from the Securities and Exchange Commission. Hardin says that whenever prosecutors hear him posing a question that would bring in evidence that the document destruction was not aimed to evade the SEC, they object, and Harmon usually sustains the objections. “Frankly they act like jumping beans,” Hardin said in court Friday during a testy exchange with U.S. District Judge Melinda Harmon. But Harmon admonished Hardin in court, saying, “The issue is very simple. Don’t ask questions that are jury arguments.” The defense received another setback Friday, when Harmon granted a motion to quash subpoenas seeking notes from David Duncan, the former lead auditor on the Enron account, and his lawyers, that were taken at times when the former Andersen partner was interviewed by congressional or government investigators. The defense team contends the notes are not privileged because prosecutors — a third party — were present during the interviews. Hardin argued at a hearing Wednesday that the defense needed the notes to establish their case that Duncan, before he pleaded guilty to obstruction, once claimed he did nothing wrong in connection with the document destruction. Since he was fired Jan. 15, he hasn’t spoken to defense lawyers. Duncan is expected to be the key witness at the trial. He pleaded guilty April 6 to obstruction of justice for his role in the document destruction, and will testify for the government. He may take the stand as early as today. In her ruling Friday, Harmon wrote she reviewed all of the notes taken by Duncan’s lawyers at those interviews and concluded they constitute attorney work-product and weren’t intended to be verbatim transcripts of statements of proffer sessions. She cited Hickman v. Taylor, a 1947 U.S. Supreme Court decision that holds that mental impressions, conclusions, opinions or legal theories of lawyers are protected, and United States v. Nobles, a 1975 U.S. Supreme Court decision that says the work-product doctrine in a criminal case should be respected. “It would be a bad precedent indeed should the lawyers for a defendant in a criminal proceeding be forced to give up their reports, memoranda or other internal defense documents while investigating and preparing the defense of their client,” Harmon wrote. One of Duncan’s lawyers, Barry Flynn, of the Law Offices of Barry Flynn in Houston, says he’s pleased with Harmon’s ruling. The issue of courtroom demeanor of the blustery Hardin came up during his cross-examination Friday of Andersen partner Carl Bass, who as a former member of the firm’s Professional Standards Group (PSG) gave internal advice on accounting issues to the Andersen team doing Enron’s auditing. Assistant U.S. Attorney Samuel Buell objected to one of Hardin’s questions to Bass, saying, “I don’t want to have to continually get up and try to regulate Mr. Hardin’s conduct in the courtroom. That’s for him to do.” After a brief bench conference, Hardin told Harmon that he will not be able to put on a fair case for his client if prosecutors continue to object to his line of questioning. He also suggested the prosecutors were making sidebar remarks in objections. Harmon told the lawyers she doesn’t approve of sidebar remarks of any kind, and told Hardin, “I will say on the ledger of sidebar remarks, you have out-sidebarred him by a ratio of about 200 to 1.” That’s not the first time Harmon has admonished Hardin for his remarks in front ofjurors during the first week of the trial, which began with jury selection May 6. Andersen is charged with obstruction of justice for destroying Enron Corp. documents. Prosecutors contend the accounting firm should have known the SEC was investigating Enron’s financial reporting at that time. Bass, a partner in Andersen’s Houston office, testified he knows of no effort within Andersen to destroy documents with the intention of keeping information away from the SEC, or any government agency. He said he personally never had Enron documents shredded or deleted Enron-related e-mail messages with that in mind. Bass says that while some of his opinions on Enron accounting issues were not accepted by the Enron audit engagement team, he never believed any of the accounting at Enron was unlawful. However, Bass did testify at length about the problems he had with accounting on some of the Enron off balance-sheet partnerships, including the four Raptor partnerships. In the spring of 2001, at Enron’s request, Bass was taken out of the loop on Enron accounting issues going to the professional standards group. By September 2001, he had left the PSG and returned to a line accounting position in Houston. Assistant U.S. Attorney Andrew Weissmann announced in court, outside the presence of the jury, that Enron in-house lawyer Nancy Temple had been subpoenaed to testify at the trial, but she has notified lawyers she would take the Fifth Amendment against self-incrimination. That comes a day after Hardin objected to prosecutors bringing in one witness, Kate Agnew, a former Andersen manager on the Enron audit engagement, when they knew she would take the Fifth. He said it was intended to humiliate Agnew and send a message to other witnesses. At a press conference after court proceedings Thursday, Hardin said he would send a letter to the Department of Justice, asking the agency to investigate any witness intimidation by prosecutors in the Andersen trial. He alleges that at least two more possible witnesses for Andersen have also been threatened with prosecution because the government doesn’t like what they would say. Weissmann said Thursday that Agnew was not threatened and it was her choice whether to testify. One of Andersen’s defense attorneys confirmed the letter was sent to the DOJ, but he says the defense team is not now releasing copies. Brenda Sapino Jeffreys is a senior reporter with Texas Lawyer , a division of American Lawyer Media and an affiliate of law.com.

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