Andersen, Feds Discuss Deal
By Kevin Drawbaugh and C. Bryson Hull
Friday April 5, 5:18 pm Eastern Time
HOUSTON/WASHINGTON (Reuters) - Accounting giant Andersen and the Justice Department hammered away Friday at a possible settlement of a criminal obstruction of justice charge crippling the firm, sources close to the case said.
But the sources declined to say whether progress was made, or even if more talks would be held.
Lawyer Rusty Hardin, leading the criminal and civil defense in Houston for the embattled Big Five firm, said both sides met in Washington Friday to hash out a settlement.
``We've been talking to the government and that's all we're going to say,'' said Hardin, preparing to return to Houston.
A Justice Department official said Andersen requested the meeting and prosecutors were willing to listen.
Andersen, in near-total ruin because of its role in the collapse of bankrupt Enron Corp. (ENRNQ - news), is hoping to cut a deal to keep it from admitting criminal guilt, sources said.
It faces a single felony charge of obstructing justice by destroying thousands of Enron-related records after learning of a government probe into the Houston energy trader.
Though both sides negotiated prior to the firm's early March indictment, the new talks represent an abrupt shift from the war stance they have taken since Andersen pleaded not guilty and forced an early trial, set for May 6.
A conviction or a guilty plea is seen as a death sentence for the bleeding auditor and its 85,000 employees. The firm has lost 100 clients and seen doubts spread about its future.
The government has been steadfast in its demand that Andersen admit responsibility for alleged wrongdoing. The Chicago-based auditor is adamantly against admitting guilt to a crime, but would concede it made errors, sources said.
Andersen would be willing to admit mistakes were made last fall when employees destroyed Enron-related records sought by federal investigators probing the energy company's fall to ruin, sources told Reuters of the proposed settlement.
The deal would require Andersen not to repeat the errors or it would be automatically recharged with the crime, under an arrangement called ``deferred prosecution.''
The Justice Department may be wary of agreeing to defer prosecution of Andersen for fear future defendants may demand similar treatment, lawyers close to the case said.
``They see this as exposing themselves to repeating this in a case where it's not appropriate. That's the trick,'' one lawyer said.
Some lawyers also questioned whether Justice would be willing to offer the same deal to Andersen it offered before the indictment. If it did, future defendants might not feel motivated to consider a deal to avoid indictment.
``There's a long-term strategic goal for the department in this investigation and in other investigations,'' said Paul Fishman, a white collar defense lawyer at Friedman Kaplan Seiler & Adelman. ``They have to avoid the appearance that the company gets the same deal that they would have gotten pre-indictment.'' |
