Lieberman on Andersen: 'Enron Episode May End This Company's History'
Senator Joseph Lieberman (D-CT), chairman of the Senate Governmental Affairs Committee, one of the several government agencies investigating the Andersen/Enron affair, appeared on CBS's Face the Nation on Sunday, and described what he said may be criminal activity on the part of Big Five firm Andersen.
"We know that Arthur Andersen, the supposedly independent auditor, covered up facts very relevant to the condition of Enron," said Sen. Lieberman. "Arthur Andersen is a great company with a great name. That name is being sullied and ultimately this Enron episode may end this company's history."
On Sunday, Time Magazine released a story in which it described a memo that went out to Andersen employees on October 12, just four days before Enron disclosed its $618 million loss which paved the way for the energy giant's spiral downward into bankruptcy proceedings. The Andersen memo directed workers to destroy all audit material relating to Enron, except for the most basic "work papers."
The article went on to state that supervisors at Andersen reminded their employees of the order to destroy documents several times in the weeks leading up to the formal investigation that was launched by the Securities and Exchange Commission in November. It has not been determined if orders to destroy documents at Andersen continued after SEC subpoenas were issued.
Echoing Sen. Lieberman's comments, J. Edward Ketz, associate professor and director of the M.B.A. program at Pennsylvania State University was quoted in the New York Times as saying, "Things look very bleak for Andersen. There's a chance that they could go under on this one."