NEW YORK (CNN/Money) -
Arthur Andersen LLP is trying to restart settlement talks with the Justice Department over the criminal charge against the firm as reports surfaced Thursday that Andersen may be accused of more than just obstruction of justice for shredding Enron Corp. documents.
The Justice Department received a letter from Andersen late Wednesday, a DOJ spokesman confirmed. Andersen offered to acknowledge its guilt for destroying Enron documents as part of a deferred prosecution agreement. But the accounting firm rejected other conditions federal prosecutors had sought, the New York Times reported Thursday.
"[We] have not had a chance to thoroughly review [the letter]," the DOJ spokesman said, declining further comment.
Andersen could not be reached for comment.
Andersen called off settlement negotiations with the DOJ last week after the auditor could not agree to some conditions required by federal prosecutors. The two sides are set to meet May 6 when the trial on Andersen's criminal indictment will begin. Andersen allegedly obstructed justice when it shredded "tons" of Enron documents while on notice of a federal investigation.
David Duncan, the former Andersen partner on the Enron account, pled guilty earlier this month to obstructing justice and admitted that he directed the destruction to thwart a federal investigation. Duncan also agreed to cooperate with the DOJ in its prosecution of Andersen.
But prosecutors could be looking to ratchet up the charges against Andersen, and a special Enron grand jury is investigating potential fraud, perjury and false statement charges against the accounting firm. Andersen attorney Nancy Temple is under a criminal probe and prosecutors are investigating her role in the case of the now-bankrupt energy trader, the Wall Street Journal said, citing a sworn statement filed by a government prosecutor.
Prosecutors also are looking at potential fraud, perjury, false statements and obstruction of justice charges against Enron, the report said.
Temple's role is being questioned because she ranked high enough to possibly know about the alleged document destruction, and she also sent an e-mail to former Enron CEO Jeffrey Skilling Oct. 12 asking about the company's document and retention policy, the Journal said.
Separately, former Federal Reserve Chairman Paul Volcker denied reports Thursday he is leaving the Andersen oversight board. Volcker, in a speech to the Bond Market Association, said that the accounting firm has yet to meet terms for a new Andersen.
Volcker, who is charged with implementing change at Andersen, has recommended installing a seven-member independent board that will take control of Andersen. That board was to be headed by Volcker. The former Fed Chairman has also called for Andersen to return to its audit roots and split off its consulting business.
Andersen has said it will push forward with the Volcker reforms and has begun negotiations to sell its non-audit businesses. Joseph Berardino, Andersen's former CEO, resigned in March shortly after Volcker called for a change in senior management.
But Volcker has never officially taken charge of Andersen, which is set next month to start a trial on the criminal charge against it. The firm is now teetering on collapse, having lost over 250 public audit clients this year and has announced plans to lay off 7,000 employees.
"There is nothing to resign from," Volcker said Thursday. "The conditions that the board had set for a reformed Andersen have not been met."