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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (887)	1/29/2002 5:25:14 PM
From: stockman_scott	Respond to of 3602

Panel probes Enron consulting January 29, 2002 (Reuters)—U.S. lawmakers Tuesday sought additional information from embattled auditor Andersen about consulting work it did for now-collapsed Enron Corp., as well as details about who was involved in shredding documents related to Andersen's audit of the energy firm's books. The U.S. House Energy and Commerce Committee, which has been investigating the role of Andersen in Enron's demise, also asked for information about the auditor's actions when federal investigators probed Sunbeam and Waste Management Inc., two companies with accounting problems that were its clients. In a letter to Andersen, the committee asked whether it had provided auditing, consulting services or advice to Enron, company officials or related partnerships since 1997. The lawmakers asked for a list of each entity for which consulting services were done and all records related to such services as well as whether Andersen knows if any documentation for those services have been destroyed since August 2001. An Andersen spokesman had no immediate comment on the request. The letter was signed by House Energy and Commerce Committee Chairman Rep. Billy Tauzin, a Louisiana Republican, and the investigations and oversight subcommittee chairman, Rep. James Greenwood, a Pennsylvania Republican. Enron is under criminal investigation by the U.S. Justice Department and is also being probed by the U.S. Securities and Exchange Commission, the Labor Department and more than half-a-dozen congressional committees. At the crux of the energy company's troubles were certain partnerships it set up that allowed it to keep debt off its books. The partnerships were reviewed by Andersen as part of its audit of Enron. The House committee held a five-hour hearing last week grilling Andersen officials about the destruction of documents and why it took so long for the Big Five firm to stop the shredding once federal agencies began their investigations. Enron entered bankruptcy protection weeks after it said it overstated earnings dating back to 1997 by almost $600 million and posted its first quarterly loss in more than four years after taking charges of $1 billion on poorly performing businesses. Enron filed for the biggest bankruptcy in U.S. history on Dec. 2, wiping out 5,000 jobs and leaving investors—including many employees who held company stock in their retirement accounts—holding nearly worthless shares. Andersen has fired its lead partner reviewing Enron's books, David Duncan, for his alleged role in destroying documents sought by federal investigators. Duncan has said he was following instructions of an Andersen lawyer. Other audits scrutinized The lawmakers also asked Andersen to outline what its auditors did when the SEC investigated other companies that had accounting troubles, including Sunbeam and Waste Management. ``Please state the dates upon which Andersen first learned of the SEC's inquiries into two of its other clients, Waste Management, Inc., and Sunbeam; the dates upon which Andersen first retained outside counsel to handle those matters; and the dates upon which Andersen ordered its employees to begin preserving all records relating to those inquiries.'' In asking for a list of Andersen employees who have been interviewed as part of its internal investigation, the House panel asked the auditor to indicate whether the employees said Duncan ordered them to destroy Enron-related documents. The lawmakers also sought information about Andersen hiring outside litigation counsel at the firm of Davis Polk & Wardwell, as well as a team consultation conference call that took place a day after Enron disclosed that the SEC was looking into transactions between the energy company and partnerships.