Arthur Andersen was one of the top companies
in the accounting/consulting sector: international, efficient, and above all
trustworthy. But its involvement in the Enron disaster has ruined it; a jury
in a federal court found it guilty of obstructing
justice and it is now a "zombie company" (Newsweek, 24 June 2002), having
lost most of its clients. Andersen's specific sin was the shredding
of documents relating to Enron, even after Andersen officials were aware
that a federal investigation into Enron's finances would be taking place. It
committed other unethical acts, however, such as sanctioning
Enron's very questionable accounting practices and failing to alert officials.
Enron, whose rising stock value seemed to justify the free-wheeling
company's daring business policies, paid Andersen $52 million in annual fees,
which the accounting firm did not want to jeopardize by objecting to Enron´s
deals. Andersen accuses the media of unjustified pursuit, in fact bringing about
the respectable accounting firm's downfall.
Charges of unethical practices in such hitherto
reputable companies as WorldCom, Merrill Lynch, ImClone, Tyco… have dominated
the business news in the U.S. this summer. Congress is passing new legislation
on accounting practices with harsh punishment for illegal actions, and George
Bush's administration has a program to combat corporate
crime and greed called "Judicial Watch." Apparently Vice-President Dick
Cheney's former company Halliburton is one of the first to be caught - will
it soon be Andersenized??