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White House orders Enron, Andersen contracts reviewed

WASHINGTON (CNN) -- The Bush administration on Friday ordered all government agencies that have contracts with Enron or the accounting firm Andersen LLP to review those agreements to determine if the companies are performing their duties.

In all, the review affects about 100 contracts that were valued at more than $70 million in the last fiscal year. It was requested by Mitch Daniels, the director of the Office of Management and Budget, which oversees all government procurement.

"Recent press reports have highlighted potential irregularities in the work done by the accounting firm of Arthur Andersen, LLP and the Enron Corporation," Daniels said in a letter to 10 heads of Cabinet departments or other major government agencies.

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The letter noted that federal contracting rules "require that firms seeking to do business with the government have a satisfactory record of business ethics and integrity."

Accordingly, Daniels asked government agencies to review their contracts: "Consideration should be given to the initiation of suspension or debarment proceedings for all, or a part, of Arthur Andersen and Enron as appropriate."

The letter was sent to the administrator of the General Services Administration and copied to other agencies with either Enron or Andersen contracts. Those include the departments of Health and Human Services; Housing and Urban Development; Defense; Treasury; Justice; Veterans Affairs; and Transportation.

The Nuclear Regulatory Commission and the National Archives and Records Administration are covered by the order as well.




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