White House Cautions Agencies About Hiring Andersen

The Bush administration has issued a letter to federal agencies to carefully determine whether business practices and ethics are sufficient before hiring Big Five firm Andersen or Enron Corp. to perform government services. While not specifically asking agencies to choose different companies, Mitchell Daniels, director of the government Office of management and budget cautioned the General Services Administration and nine other federal agencies to refer to the government's ethics and integrity requirements before awarding future contracts to either Andersen or Enron.

"Consideration should be given to the initiation of suspension or debarment treatment for all, or part of, Arthur Andersen or Enron as appropriate," said Mr. Daniels. Suspension is temporary, disbarment is for "a reasonable period," according to the Federal Acquisition Regulation.

Andersen currently performs services on 64 federal government contracts worth $24.7 million.

Meanwhile, Andersen's UK managing partner, John Ormerod, has issued a letter to Andersen's UK clients stating that his firm should not be blamed for the failure of Enron. "We've been in business here in Britain for half a century. Our 500 partners and 5,500 other staff here are proud of their work and determined to defend our long-established reputation for professional competence and integrity."

The letter continues, "Much of the comment in the press focused on US accounting standards. In the UK, of course, there are different accounting standards. Our current practices and policies are robust and should not cause you, or your shareholders, any concern."

You can read the full text of Mr. Ormerod's letter.

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