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News > Companies
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Andersen blame game heats up
graphic January 21, 2002: 4:35 p.m. ET

E-mail prompts document shredding; Andersen CEO points at client; Lay's attorney describes stock sale.
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NEW YORK (CNN/Money) - The business and political fallout surrounding Enron continued to mushroom Monday as more reports of questionable dealings by the company's leadership surfaced and its auditor continued its public attempts at damage control.

Among the Enron-related developments:

-- Another executive of Andersen LLP testified that the firm's Houston office began destroying documents after receiving an e-mail from Andersen's head office.

Michael Odom, the risk management partner responsible for the Houston office, gave testimony Friday that bolstered the account given by lead partner David Duncan last week, sources with knowledge of the investigation told CNN/Money.

Odom's testimony amplifies the finger-pointing between Duncan and Andersen over who initiated the destruction of auditing documents considered vital to the investigation of Enron's bankruptcy. Details

-- Arthur Andersen CEO Joseph Berardino conceded Sunday that his company made errors but said that the energy giant's demise was ultimately the result of a failed business model, not shady accounting.

"At its base, this is an economic failure," said Andersen Chief Executive Officer Joseph Berardino on NBC's "Meet the Press." Details

-- In a telephone interview with the New York Times, the attorney for Enron CEO Kenneth L. Lay said his client repeatedly used shares of the company as collateral for other investments that he would not specify. Attorney Earl J. Silbert said Lay's decision to sell shares of Enron late last year reflected concern about the loans, and was not tied to warnings from a company vice president about Enron's financial situation. Details

-- Responding to severe market criticism of how it handled now-bankrupt Enron's ratings, Moody's Investors Service says it is considering making changes in how it rates companies.

The review by one of the three leading U.S. credit rating agencies -- the others are Standard & Poor's and Fitch -- follows criticism of the agencies' perceived lack of speed in downgrading energy trader Enron's ratings to junk status in November. Details

-- Weeks before his company filed for the largest bankruptcy in U.S. history, Lay touted the energy trader's stock as an "incredible bargain" in a Web chat with his employees.

In a transcript of the in-house chat session, which took place Sept. 26, the Enron CEO also defended Arthur Andersen, the accounting firm recently accused of destroying key documents and covering up sizable financial losses. Details

-- Democrats hoping to make gains in this year's congressional elections see the Enron scandal as a possible wedge into President Bush's popularity. Details

-- Terms have been set for selling off Enron's $2.9 billion Dabhol power project in India, according to Reuters. Details

-- Last week, administration officials confirmed that Vice President Dick Cheney asked Indian opposition leader Sonia Gandhi last June about a multimillion-dollar debt owed to Enron from a major energy project in India.

There have been growing questions about the Bush administration's links with Enron, which was a big contributor to the Bush campaign. Details  graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

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