Paul Volcker Likely to Step Aside at Andersen
Appointed to be the "White Knight" to lead Andersen through its post-Enron restructuring just two months ago, former Federal Reserve Chairman Paul Volcker now will likely abandon his leadership position at the embattled firm, according to The Wall Street Journal.
The departure, widely anticipated now among Andersen management, comes as a result of a failure for the firm to reach an agreement with the Department of Justice - a critical condition set by Mr. Volcker when he accepted the position. Talks with the Justice Department broke down last week when Andersen lawyers walked away from negotiations indicating they could not reach an agreement.
According to the Wall Street Journal, Mr. Volcker had repeatedly expressed frustration with the focus of Andersen management and partners to find their own exit strategy rather than making the Herculean efforts needed to save the firm.
Mr. Volcker and a proposed outside Board were brought in as arms-length consultants, but were not in a position to speak on behalf of Andersen in its critical discussions with the Justice Department.
"It's a question of whether you have a useful role to play," says Mr. Volcker. "We offered to make our assistance available if conditions were such that it was useful. It comes to the point where if conditions aren't met, you don't have a useful role to play. That's a conclusion, not a resignation."
Mr. Volcker's imminent departure is likely to add one more significant obstacle to the ability of Andersen to survive.