>Subject: Anderson accounting for FBI > >Enron Accounting Firm Has Ties to FBI (english) >by besmirked 10:50am Thu Jan 24 '02 >Enron oversees FBI's inept investigation of Enron. >[source: Reuters, Jan. 16; Newmax, Jan. 17] >ARTHUR ANDERSEN HAS MILLION-DOLLAR FBI CONTRACT. >The accounting firm now under investigation >for destroying documents to cover up Enron's phony books, also has a $1 >million contract to review FBI operations. >Sen. Patrick Leahy warned on Wednesday that this could give Arthur >Andersen access to information about the FBI's investigation of Enron. >"Now, unfortunately, the problem we're going to have is that Attorney >General Ashcroft has also hired Arthur Andersen to do a million-dollar >review of the FBI for their reorganization," Leahy said on Vermont radio. >Noting that he will be using FBI agents to assist >in the Senate Judiciary Committee's investigation of Enron, >Leahy also said: "Arthur Andersen now had access >to some very sensitive things in the FBI, at the same time where I'm going >to be calling on the FBI to help my committee investigate why Arthur >Andersen destroyed material." > AND
Subject: Anderson Accounting This is not out of the blue, nor is it a chiefly American problem. The brilliant investigative reporter Paul Foot in November 2000 outlined Arthur Andersen's hoodwinking of the British government throughout the 1980s and '90s -- an act in which, of course, many in the government were complicit. Foot writes that the British government banned Arthur Andersen from doing auditing work for the government because it OK'd the public underwriting of De Lorean subsidiaries to the tune of millions of pounds. Andersen responded by saying it overlooked the dubious corporate setup because the government was interested in investing in Northern Ireland. This sounds suspiciously like Andersen "overlooking" Enron's cooking of its books because Andersen itself stood to gain substantially from the success of the company it was auditing. Oddly, the government banned Arthur Andersen -- but it did not ban Andersen Consulting, which continued to lobby and win lucrative contracts. Foot says that when he tried to understand just how Arthur Andersen was different from Andersen Consulting, he got a response that would have made W himself blush: 'Arthur Andersen is a partnership,' I was told. 'Andersen Consulting is another partnership with different partners. They ultimately meet in a worldwide partnership which is called Arthur Andersen and Co. Every partner in AA and AA Consulting is a partner in that partnership, which binds the whole thing together, so that although they work independently of each other, and according to the law of the Medes and the Persians, around the world, whichever country they may be in, ultimately they do all belong to the same partnership. I hope that's clear.' What's clear is that this is the same dilemma we face here. One, Two, I Misrepresent You In this specific case, we had a firm that handled both the outside and the inside auditing of Enron and then allegedly lied about the company's financial picture because it stood to gain. But Andersen is only one of the many problems. Investment brokers were -- at best -- misrepresenting the state of Enron, William Greider says this week in The Nation. "Think of Goldman Sachs still advising a 'buy' on Enron shares last fall, even as the company abruptly revealed a $1.2 billion erasure in shareholder equity," Greider writes. "Goldman earned $69 million from Enron underwriting in recent years, the leader among the $323 million Enron paid Wall Street firms." Understanding Andersen Just as there should be little wonder that you'll see "The Lord of the Rings" flogged on CNN or in your AOL chat room or as you change the channels of your Time Warner cable system, I suppose there shouldn't be much hemming and hawing over the myriad connections in the business world that lead us all to wonder how we're ever going to get reliable information. The business of business is business. Kenneth Lay, who told his own workers, just week before the company's Chapter 11 filing, that they should keep buying, was, one could argue, just a salesman protecting his product. If we don't like what he did, then we can do whatever we have in our power to punish him. But without government this isn't much. Wall Street's hold on the government of the good old U.S. of A. is only growing. Securities and Exchange Commissioner Harvey Pitt came to the government from a firm that represented -- you guessed it, Arthur Andersen. "Pitt should not just recuse himself from the Enron case--a crisis of legitimacy for the SEC," Greider says, "he should be compelled to resign." But then there's Robert Rubin, who went to the private sector from the government only to lobby his old buddies to bail out the failing energy company. And in the Bush administration, of course, it's impossible to find a Cabinet secretary who was not -- or rather, is not -- a shill for business interests. The only way to overcome this is to go to the root of the problem through hearings, as we argued here last week, designing them in such a way that the depth of the problem is clear. This is not about one criminal CEO nor simply about a corrupt non-elected president -- though they certainly are part of the story. Nor is it about 20,000 workers in Houston or anywhere else. This is about how the country expects to go forward and do business, as well as to protect the welfare of its people -- of all of its people. Enron Soils Clean-Air Initiative One wrinkle in this saga was the peculiar revelation last week that Lay and Enron supported the Kyoto global warming agreement as it was being negotiated by President Clinton in 1997. "An internal memo said the Kyoto agreement, if implemented, would 'do more to promote Enron's business than almost any other regulatory initiative outside of restructuring the energy and natural gas industries in Europe and the United States,'" the Washington Post reported. Because we tend to think of Enron as siding with the polluters and other mean, nasty people, it may be difficult to understand why this would be. But the trend of deregulation says all we need to know. Lay knew that since the United States wasn't going to get in his way, he could fatten his company on the trading of emissions. Now, we're no experts on the Kyoto Protocol -- we gave up studying it when it became clear our country tis of thee was going to trash it -- but part of its scheme was to allow nations to adhere to emissions limits through trading. So if the United States violated the output levels here, it could plant a tree in Sweden to make up for it. Such transactions were a natural for Enron, which really just acted as a virtual infrastructure for trading of anything from energy to Kenneth Lay's soul (word is it's been delisted due to lack of worth). Now, I'm no expert, but this isn't likely what some of you had in mind when you were interested in seeing an international convention dealing with limiting greenhouse gases. But it does go to show that as / if we push a progressive agenda over the next few years, it can easily be coopted by companies who don't necessarily share our interests. It's not a reason to give up on our goals, but it is a reason to try to reform the government-business relationship from its roots, not just by cherry-picking a few people from the top. Anything can be bought and sold -- including an agenda for reform. by jeremy rice new york, ny 2002-
