ENRON PAPERS DESTROYED AFTER SEC BEGAN PROBE

Financial Times of London ^ | Wednesday January 16, 2001 00:01 Greenwich Mean Time | Adrian Michaels

[Resplendent]

Ken Lay will be slapped on the hand. A mild retribution program will be worked out for the employees. And every politician involved on both sides of the isle will get to whipe the sweat off their foreheads.

[Dog Gone]

We'll see. I hope you're right. It's not my normal experience that people like this spill their guts right out of the box. Two-bit street hoodlums, yes. A white-collar criminal who drives a Porsche, almost never.

[Southack]

"It's a fine firm, and a shame that this sort of practice went on down in Houston. They do play fast and loose down there."

And with Sunbeam, Waste Management, IHI, Enron, etc...

[Ken H]

If I'm not mistaken, David Boies is the attorney representing Fastow.

[M. Thatcher]

I think the technical term X42 would use is "SNAFU"...

Bureaucratic snafu. Gives it that no-one's-to-blame aura.

[Southack]

Insider Claims Andersen Engaged In Arizona Fraud

[Pat Fish]

But I feel sorry for the next one of my colleagues who has to approach our chief credit officer about approving a loan to a company audited by AA

I know my experience with Arthur Andersen is just my one experience. And I've been sitting on my hands because I hate this auditing firm with a passion. Because I had the chance to work with these people and believe me, as long as seven years ago they were dishonest.

This was the year that Arthur andersen became the auditors for a little hospital for which I worked. Along with this, the CFO and Controller came right from the ranks of AA. I was the accounting manager, hired about the same time as all this change. My oddness was not coming from or being associated with, in any way, Arthur Andersen.

The very first thing they all wanted to do was make an entry that would improve the hospital's bond rating. Excuse me, they wanted ME to make the entry. I absolutely refused and told them to either do an AJE or have the CFO or Controller do it. I don't know what happened but I know the entry was never made. I was forever viewed as a rabble-rouser though.

I managed to stay with this hospital and working with these people for five years. During that time a major payroll and time and attendance system was installed, deep in each action was I and not paying much mind to much else. But I've never liked them and your comment about AA's smell being reflected upon other, very probably innocent, businesses gives me pause. Lord I know I would never trust a financial statement signed off by these people. Heck, I wouldn't have trusted them even before Enron and because of my own unsavory experience. It's nice to be vindicated though.

[genxer]

Sullivan Cromwell = Microsoft Defender amoung other high profile cases.

[philman_36]

...but I have a gut feeling the Dems are gonna regret this one...
Ain't nothing gonna come out of it. In the end...Kiss, kiss, hug, hug. Everybody is friends now. JMHO.
Guilty? What's that? There is no such thing as guilty.

[LenS]

Since Andersen is a private partnership, there's no stock for you to short. Though, it's various landlords could be hurt if AA is driven into bankruptcy like that Big 8 firm about 20 years ago.

[LenS]

AA, for that matter all the big firms, have been under great pressure to produce bigger profits over the past decade. The explosive growth of their Consulting businesses put even more pressure on the Auditing departments. As always, envy and trying to keep up with the Jones (aka Consultants and other high-growth, big compensation 90's businesses) gets people into trouble if they lose sight of ethics and morals.

[LenS]

Um, there's only the Big 5 now. Mergers have shrunk the number of big auditing firms left.

[truth_seeker]

Could Greenspan have been oblivious to all of this??

It wasn't Greenspan's job, as Chairman of the Federal Reserve Bank. I would expect that he would be aware that certain major accounting practices were in use, in certain industries and types of company formations.

I believe in the US Govt., the Securities Exchange Commission would have whatever "oversight" there is. Accounting is fairly complex, and companies these days are also complex. Often, the structure is arranged to minimize or defer taxation, to reduce and limit liability, and a range of other reasons.

Enron, it appears, simply established a set-up which FAILED to follow GAAP (Generally Accepted Accounting Principles). That is cheating; is illegal, can get you sued, block you from the debt market, get delisted from the exchange, and more.

Enron is reaping the fruit of the seeds they sowed. The pity is the employees' retirement savings, gone to dust. Arthur Andersen LLP has insurance, and so does Enron. But surely not enough to cover the wipeout of share value.

[DB]

I stand corrected... ;-)