Arthur Andersen Admits It Destroyed Documents Related to Enron Account [Extended Front Page Report]

The Wall Street Journal ^ | Friday, January 11, 2002 | JONATHAN WEIL, JOHN EMSHWILLER and SCOT J. PALTROW

[TroutStalker]

The storm cloud hanging over Enron Corp. and its longtime outside auditor, Arthur Andersen LLP, just got darker.

In the latest revelation in the collapse of Enron, Arthur Andersen disclosed to federal agencies investigating the energy trading firm that individuals at the accounting firm in recent months disposed of "a significant but undetermined number" of documents related to its work for Enron.

[Galtoid]

John Danforth? Janet Reno's pal? Go figure.

[NC Conservative]

Arthur Andersen is the auditor for our company. Time to find a new auditor. They suck. The guy that comes for ours out of the Raleigh office is a pompous a$$.

[smith288]

If this is all the dems got to try to bring Bush down, we are in for a pleasant election. Unless Bush was pictured personally holding the papers above a shredder, this whole Enron thing is blown out of proportion in relation to the White House. The liberals are reaching big time.

[TroutStalker]

Related WSJ story here: Enron's Lay Sought Cabinet Officials' Help; Ashcroft Recuses Himself From Investigation

[abandon]

...this whole Enron thing is blown out of proportion in relation to the White House.

I think you're right with regard to the White House. But the Enron thing in general has not been blown out of proportion. There is something very disturbing and worthy of investigation when a huge company like this declares bankruptcy without ever declaring a loss in any previous quarter. It's primae facie evidence that something was amiss.

[Eric in the Ozarks]

We used to think of Enron as a company to emulate. Just never could figure out how they made their money. Turns out, they didn't make any. The play was in Enron's stock value.

[smith288]

Thats what I mean. Its big, dont get me wrong. But its been turned into a political issue when it isnt.

[SteamshipTime]

Arthur Andersen better get out the check book. Enron is based in Houston, TX, which is not a good place to defend an accounting fraud/malpractice lawsuit.

I'm acquainted with three Arthur Andersen "consultants" (people who used to be called "jobbers," or "temps"). None of them have been out of business school more than 5 years and they really do think they walk on water.

[Madame Dufarge]

Asked whether Andersen has been told by any clients that they are switching to other auditors, spokesman David Tabolt said, "Some have been concerned. Some have been supportive. I just don't think that we know yet how people are going to react."

Who's going to drop them right in the middle of the tax season?

[VRWC_minion]

THe irony is that many businesses will flock to AA, thinking they too can get a better financical report.

[VRWC_minion]

People with knowledge of the Justice Department's Enron probe said Andersen didn't destroy any audit working papers.

This is what I have been looking for. Auditors gather all sorts of workpapers that include originals and copies of originals. At the end of the audit they are supposed to be destroyed. It is quite possible that AA retained some documents that were not required for its audit and as things were heating up they got around to finally disposing of them.

[Red Jones]

i agree with you 100%; the effort to tie the Enron failure to Bush is ridiculous. However, the Enron failure is a big event. It is a big sign of a very low level of integrity that exists among the American big business community.

Anderson has been caught over and over lying about these things. They do it for the client, they cover up. It's their strategy for success. The article didn't even mention the UDC Homes case in Arizona in which Anderson was caught lying big time to a bunch of investors to protect the managerial regime that hired them.

I've always very much disliked the corporate culture of Anerson Consulting. If you want a dishonest accounting consultant, then Andersen is your company.

[Commiewatcher]

A bit off topic, but can anyone recommend a program for document archival on CD?? Acrobat 5.0 looks good but maybe there is something else I should consider using.

[newgeezer]

Here is a similar story from the Chicago Tribune:

http://www.newsday.com/business/nationworld/sns-enron.story

From the Chicago Tribune

Enron auditor destroyed files

Top Bush aides talked with CEO about bankruptcy, its implications

By William Neikirk and Jeff Zeleny
Chicago Tribune Washington Bureau

January 11, 2002, 7:14 AM EST

WASHINGTON -- The investigation into the collapse of Enron Corp. widened Thursday as the company's auditor, Arthur Andersen LLP, admitted destroying an untold number of documents relating to the Houston energy firm while the White House disclosed that Enron Chairman Kenneth Lay last fall contacted two Cabinet officers about the firm's pending bankruptcy.

As the White House sought to contain election-year political damage from the company's extensive ties with the Bush administration, Atty. Gen. John Ashcroft and the entire U.S. attorney's office in Houston recused themselves from a newly opened criminal investigation into Enron's failure. more...

[KarlInOhio]

THe irony is that many businesses will flock to AA, thinking they too can get a better financical report.

The problem is that even with glowing financials, seeing that AA did the audit give the implication that any annual report isn't worth the paper it is printed on. It will be only one (very small) step above seeing a quote by Clinton saying "I heartily endorse this company" on the annual report.

If you want to cook the books, you better not show everyone the pots and pans you did it with.

[angkor]

Enron’s Campaign Contributions, 1989-2001- Senate & House