Andersen Will Not Plead Guilty - Firm Heads for Trial

After weeks of discussions, Big Five firm Andersen walked away from the Department of Justice's negotiating table and headed for the courtroom. "We are no longer in talks with DOJ and nothing is planned in the immediate future," said Andersen lawyer Rusty Hardin.

The Department of Justice had given Andersen until Wednesday to reach a settlement, then extended the deadline until Thursday noon, but no agreement could be formed. The government had offered to defer any criminal prosecution of Andersen for three years, placing the firm on probation for the period. In exchange, Andersen was to publicly admit that the firm knew employees were wrongfully destroying documents. In addition, Andersen was to cooperate in the government's investigation of Enron and had to promise that it would not violate any laws during the probationary period. Failure to meet the terms of the agreement would cause the government to reopen criminal charges against Andersen.

Andersen lawyers were unable to agree on acceptable settlement language and ultimately left the negotiations. "We just agreed that we're just not there right now," said Mr. Hardin. "We rejected certain proposals by the government and agreed to continue to review other proposals of the government, but we could not complete that review within the time frame the government was demanding." Andersen is not ruling out the possibility that negotiations could resume.

Trial on the obstruction of justice charge is set for May 6. U.S. District Judge Melinda Harmon will hear the case in federal court in Houston.

Meanwhile, Andersen is also scheduled to go to trial in Phoenix on April 29 concerning its role in the audit of the Baptist Foundation of Arizona. An out-of-court settlement had been reached on that case in which Andersen agreed to pay $217 million, but Andersen reneged on the settlement and will go to court instead.

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