WASHINGTON –– A federal grand jury on Thursday indicted the Arthur Andersen accounting firm in the Enron Corp. scandal, the first criminal charges in the nation's biggest bankruptcy.
The one-count indictment alleging obstruction of justice came after Andersen spurned a 9 a.m. Thursday deadline to plead guilty to charges stemming from its admitted destruction of Enron-related documents. Andersen said criminal proceedings were tantamount to a "death penalty" against the firm, and it accused the Justice Department of "a gross abuse of governmental power."
For a one-month span in October and early November, "Andersen ... did knowingly, intentionally and corruptly persuade" employees to "alter, destroy, mutilate and conceal" documents, the indictment said
The fact is Enron was doing a giant scheme that could not ever work. The company started out as a stodgy but profitable oil and gas company. Then it started dealing in energy futures. They didn't call em futures, but Arthur Andersons management had to know that is what they were.
The futures business is at at best a 4 percent return business. It is legit and there is nothing wrong with those that go into it. What is wrong is when a futures company starts playing the futures. That is a prescription for going broke. But they guessed right for a while and for a while made big returns. They felt they had invented a new way to make money. But when the market fell they lost it as fast as they has made it. Like many before them they tried to cook the books until their "luck" changed.
Anderson was surely to be aware they were helping people cook books. An accounting firm that can't tell when people are cooking the books is negligent indeed.
Arthur anderson reminds me of the bank guard who was on duty when the bank was robbed. His excuse for not preventing the robbery, was he was taking his afternoon nap when the robbers showed up.
Arthur anderson's top people were in on the rip off, or they were taking nap when the books were a being kept.