MEMO DIRECTED ENRON AUDIT DOCS DESTROYED
"Mark Cheffers, CEO of accounting Malpractice.com, says of Arthur Andersen: "Even if they're innocent, it looks like a massive cover-up." Andersen reported its destruction of Enron documents to the SEC and Justice Department early last week—just before four congressional investigators arrived at the company's Houston office on Wednesday. Committee officials immediately demanded the personal records of the partner and five top executives working on the Enron account.
The incident further tars the name of venerable Arthur Andersen, which in June settled allegations of fraud stemming from its audit of Houston-based Waste Management and paid a $7 million fine without admitting any wrongdoing. Last year, again without admitting wrongdoing, Andersen agreed to pay $110 million to settle a class action brought on behalf of shareholders of another client, Sunbeam, which had misstated its financial results during the 1990s. These days, an Andersen competitor observes sardonically, settling a fraud case appears to be good for attracting business from other firms that want a soft touch for an auditor.
Andersen picked for FBI review
Andersen picked for FBI review
By Christopher J. Dorobek
July 23, 2001
The Justice Department has selected Andersen to conduct a comprehensive review of the FBI, including its antiquated computer systems.
The study is being undertaken on behalf of Justice's Strategic Management Council, a new organization that Attorney General John Ashcroft created to provide long-range planning. Ashcroft said that the council's review will include a management study of the FBI's policies and practices focusing on information technology, personnel, crisis management and other issues.
The FBI has been reeling from problems in recent years, including the discovery this year of its failure to turn over thousands of documents in connection with the trial of Oklahoma City bomber Timothy McVeigh. The delay in handing over those documents has been blamed in part on the FBI's inadequate computers.
Ashcroft, in a June 20 memo to deputy attorney general Larry Thompson, ordered the comprehensive review to "identify and recommend actions dedicated to improving and upgrading the performance of the FBI."
The contract specifies that "Andersen will evaluate the organizational structure and mission of the FBI, including the agency's own perception of its mission and core values and how well its organizational structure is suited to identify and act on institutional and operational problems," Justice said.
Andersen will review the FBI's policies, practices and procedures in several other areas:
* The way the agency approaches the procurement and maintenance of IT systems.
* Its records and data management.
* Its approach to human resources management, including the recruitment, selection, hiring and retention of employees, as well as its approach to human capital planning and resource deployment.
* The manner in which the bureau reacts to crises, emphasizing the effectiveness of its communication structure, its decision-making and command authority, and the relation of headquarters officials to those in field offices.
Justice awarded the contract from a competition using the General Services Administration's Management, Organizational, and Business Improvement Services contract, department officials said.
Andersen, formerly known as Arthur Andersen LLP, was selected on the strength of its ability to assemble an experienced consulting team that could deliver recommendations based on its research in a short time frame, Ashcroft said.
The FBI already has two targeted reviews ongoing. The Justice inspector general is investigating the issues in the McVeigh snafu, and William Webster, former director of the FBI and CIA, is leading a group that will make recommendations for improving the bureau's national security measures. The Webster review was launched following the arrest of Robert Hanssen, a longtime FBI counterintelligence agent who is accused of spying for the Russians for 15 years.
Ashcroft asked that those investigations be completed by Nov. 1 so the findings can inform the Strategic Management Council's report, which will be completed by January."