In one of the few victories in recent weeks for Arthur Andersen LLP, a Houston judge last week barred U.S. Department of Justice prosecutors from subpoenaing Andersen employees to appear in front of a grand jury before the firm goes on trial in May on obstruction of justice charges related to Enron Corp. document shredding.

Andersen had argued that the government subpoenaed four partners and employees who already had been interviewed by federal agents only so prosecutors could strengthen their case against Andersen. Courts in the past have banned the use of grand juries for this purpose.

“It is only after obtaining the indictment — and realizing that instead of getting a plea of guilty it might actually have to prove its case at trial — that the government sought to call any fact witnesses,” Andersen had argued in court papers filed March 25.

Andersen wants to narrow the Justice Department’s one-count criminal indictment against it, which accuses Andersen of obstruction of justice for shredding Enron accounting documents after regulators had launched their official investigation. Andersen dismissed the chief Enron accountant David Duncan, but it also has denied that any employee committed a crime related to the Enron investigation. Duncan also is apparently said to be cooperating with federal authorities in the investigation.

Andersen said the Justice Department has identified three partners and one employee — and had issued subpoenas to at least two of them to testify before the grand jury as early as this week. The partners were identified as Timothy McCann, John Riley and David Stulb, and the other employee was Shane Philpot.

In related news, Arthur Andersen LLP is looking for a new CEO after Joseph Beradino resigned last Tuesday, saying he wanted to “save” the firm. “The fact is that the improper shredding of [Enron] documents took place on my watch — and I believe it is now in the best interests of the firm for me to step down from the CEO position,” Beradino said in a written statement.

Andersen’s client list is shrinking day by day. Energy companies that have so far fired the auditor include Pennzoil-Quaker State, Calpine, Occidental Petroleum, Apache Corp., Tom Brown Inc., Dynegy Corp., Northeast Utilities, Valero Energy, Kerr-McGee, EOG Resources, MDU Resources and, of course, Enron.

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