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Saturday, March 16, 2002

The split with Uncle Sam is part of the firm's troubles stemming from its accounting work for Enron Corp., the bankrupt former titan of the energy business.

Andersen's accounting work for Enron has come under increasing scrutiny, including an indictment Thursday from the U.S. Department of Justice, for the accounting firm's destruction of Enron documents.

The General Services Administration, which manages all contracts for the federal government, suspended Andersen and Enron, along with former officials of both companies, from doing any business with the federal government, according to a statement Friday.

"Under law and regulation the government may award contracts only to responsible contractors," the statement said. "To qualify as a responsible contractor, a company or individual must have a satisfactory record of integrity and business ethics and must possess the necessary organization, accounting and operational controls.

"Regarding Andersen's suspension, GSA took this action based upon an indictment released yesterday. The indictment alleges that Andersen, at numerous locations throughout the world, knowingly, intentionally, and corruptly destroyed documents and other information relating to Andersen's work for Enron, and that these actions were taken to impair official proceedings. Under federal law, an indictment for such a criminal offense is adequate evidence of misconduct to support suspension of a government contractor."

According to the GSA, the suspension will continue as long as the company remains under indictment.

Andersen has lost nearly 40 big clients during the last several weeks. Andersen and Enron had around $70 million in contracts with the federal government, according to review ordered by the Bush administration.

Copyright 2002 by United Press International.

All rights reserved.

Read more on this subject in related Hot Topics:

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