|
 |
CNN LIVE AT DAYBREAK
Andersen Can Continue Auditing Despite Indictment
Aired March 15, 2002 - 06:11 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Arthur Andersen will be allowed to continue its auditing work for now despite a federal indictment. As CNN's Tim O'Brien reports, prosecutors believe the orders to destroy Enron documents came from the top.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNN CORRESPONDENT (voice-over): In announcing the long-awaited indictment, Deputy Attorney General Larry Thompson stressed it was Andersen's partners who had ordered much of the shredding, and that the dimension of the operation was massive.
LARRY THOMPSON, DEPUTY ATTORNEY GENERAL: The indictment alleges that at urgent and mandatory meetings, Andersen partners and others told employees to immediately destroy documents related to Enron. Dozens of large trunks were brought in to haul documents from Andersen's office in Enron's building to Andersen's firm office in Houston in order to destroy literally tons of documents.
O'BRIEN: Andersen has long admitted its employees had improperly shredded documents and had agreed to fire anyone involved and to accept sanctions from the Securities and Exchange Commission. But lawyers for Andersen said indicting the firm itself amounted to an unprecedented exercise of prosecutorial discretion and a gross abuse of government power.
RUSTY HARDIN, ANDERSEN ATTORNEY: To indict a company like this, with the disastrous effect it will have and 28,000 employees, over what is going to prove to be a disagreement over their judgment and not some systemic thing going on within the company, I think is tragic and it's wrong.
O'BRIEN: The charges carry maximum penalties of only around $500,000 and five years probation. But the practical consequences could be far greater.
UNIDENTIFIED MALE: I think Andersen is basically no longer on the map, pretty much. I think Andersen will face bankruptcy. It's no longer viable, because this indictment will accelerate the defection of clients from Andersen.
O'BRIEN: A prospect that did not appear to trouble the deputy attorney general.
THOMPSON: These are serious charges, and it shouldn't be a surprise to anyone that serious charges have serious consequences.
O'BRIEN: Many of the documents were destroyed shortly after the SEC had announced an inquiry into Enron's finances. The government says it will prove the company knew full well the material shredded was relevant to Enron's collapse.
(on camera): Any sudden collapse of Andersen could create a crisis for the thousands of companies who rely on that firm to certify their financial reports. Late Thursday, Harvey Pitt, the Chairman of the Securities and Exchange Commission, said that agency is monitoring the situation and that he believed any effects of the indictment would be temporary.
Tim O'Brien, CNN Financial News, Washington.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
|
|
|
|
|
