Auditor Andersen's name in 'tatters'

MONDAY, JANUARY 14, 2002

Arthur Andersen, the auditing firm which performed an accounting of tribal assets for the Department of Interior in the 90s, has become a central part of the unfolding Enron scandal due to a strikingly similarity to the trust fund debacle: destroyed documents.

Congressional investigators have discovered that employees were allowed to destroy records relating to the befallen energy giant just days before executive announced a $1.2 billion restatement of its worth. The restatement led to the company's collapse and the company eventually filed for the largest bankruptcy in history.

Anderson admits it destroyed a "significant" but undetermined number of documents. Its practices are now under scrutiny by Congress, the Securities and Exchange Commission and the Department of Justice.

Whether the investigations will reveal anything about its handling of the tribal trusts is unknown. The Interior itself has never been a great record keeper as litigation has shown.

According to a senior department official who testified at Secretary Gale Norton's contempt trial in recent weeks, the firm performed a rather disappointing accounting. It was time-limited, said Tommy Thompson, and it involved simply "matching" electronic records with paper documents.

The electronic database was merely a copy of the existing paper records, according to testimony, so there was no gathering of additional information. Nevertheless, it took Andersen five years and $12 million to determine that $2.3 billion was unaccounted.

Two House committees have asked Anderson to supply internal correspondence about the Enron destruction.

Get the Story:
Hill Asks Firm About Timing of Data Destruction (The Washington Post 1/12)
Andersen Says Lawyer Let Its Staff Destroy Files (The New York Times 1/14)
At Andersen's Helm, a Winner of Battles Who Faces a War (The New York Times 1/13)
A Tattered Andersen Fights for Its Future (The New York Times 1/13)
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Relevant Links:
Arthur Andersen - http://www.andersen.com
Enron - http://www.enron.com/corp