Word: andersens
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Dates: during 2000-2009
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Just four days before Enron disclosed a stunning $618 million loss for the third quarter-its first public disclosure of its financial woes-workers who audited the company's books for Arthur Andersen, the big accounting firm, received an extraordinary instruction from one of the company's lawyers. Congressional investigators tell Time that the Oct. 12 memo directed workers to destroy all audit material, except for the most basic "work papers." And that's what they did, over a period of several weeks. As a result, FBI investigators, congressional probers and workers suing the company for lost retirement savings will...
...Supervisors at Arthur Andersen repeatedly reminded their employees of the document-destruction memo in the weeks leading up to the first Security and Exchange Commission subpoenas that were issued on Nov. 8. And the firm declines to rule out the possibility that some destruction continued even after that date. Its workers had destroyed "a significant but undetermined number" of documents related to Enron, the accounting firm acknowledged in a terse public statement last Thursday. But it did not reveal that the destruction orders came in the Oct. 12 memo. Sources close to Arthur Andersen confirm the basic contents...
...Though there are no firm rules on how long accounting firms must retain documents, most hold on to a wide range of them for several years. Any deliberate destruction of documents subject to subpoena is illegal. In Arthur Andersen's dealings with the documents related to Enron, "the mind-set seemed to be, If not required to keep it, then get rid of it," says Ken Johnson, spokesman for the House Energy and Commerce Committee, whose investigators first got wind of the Oct. 12 memo and which is pursuing one of half a dozen investigations of Enron. "Anyone who destroyed...
...Arthur Andersen, criminal charges could result if it can be shown that its executives ordered the destruction of documents while being aware of the existence of a subpoena for them. A likely ploy will be for prosecutors to target the auditors, hoping to turn them into witnesses against Enron. Says Coffee: "If the auditors can offer testimony, that would be the most damaging testimony imaginable...
...Enron is in the cross hairs of at least six congressional panels. In the Senate, the Permanent Investigative Subcommittee got a jump on Jan. 11 by subpoenaing documents of 49 Enron executives and, separately, the corporate records of Enron and Arthur Andersen. The subpoenas, covering the period from 1999 through 2001, are aimed at learning "what the officers knew and what they did about it," said a committee official. The first hearing this year is scheduled for Jan. 24, headed by Connecticut Democrat Joe Lieberman. The first appearance of Enron chairman Lay is scheduled for Feb. 4 before the Senate...