Andersen verdict leaves bitter taste

TAMPA -- Coffee was on Beth Brown's mind when she stopped at a Starbucks on the way to church Sunday morning. But it was the headline she eyed while waiting in line that gave her a jolt:

"Andersen Guilty In Effort To Block Inquiry On Enron," the New York Times said.

Laid off as Arthur Andersen's spokeswoman in Florida, Brown was unaware a jury in Houston had convicted the company of obstructing the federal investigation into the collapse of Enron Corp.

"Coming out of this, honest to God, I believe so much less of what I'm told by anyone," she said. "I believe less than 50 percent of what I read in any publication. I believe less than 50 percent of what any corporate leader says."

The verdict was a first against a major accounting firm, and left current and former Andersen employees in Tampa with a bitter taste. They blame the federal government, presidential politics, the media and top Andersen officials for the company's demise.

"On a local level we had nothing to do with it, and that's the harsh part," said Lisa Doherty, four months pregnant in April when she lost her job as Andersen's operations supervisor for the Tampa and Orlando offices. "We were still doing great in Tampa."

She blames David Duncan, Andersen's lead auditor on the Enron account, for staining the reputation of an otherwise untarnished firm, President Bush for sacrificing Andersen at the altar of campaign contributor Enron, and the media for beating the story to death.

Judi Giusto, Andersen's administrative supervisor for the southeast, said she thinks Duncan was following the law and company policy when he ordered certain Enron documents shredded and that the government coerced him into pleading guilty. She said Andersen is paying a high price for being honest with officials about destroying documents. "The moral of the story is, "Don't tell the truth,' " said Giusto.

Information technology specialist Patty Ortner said Andersen's Enron deal seemed only to whet the appetite of the Securities and Exchange Commission, which has opened a number of investigations. "What do they want to do, bring down all four accounting firms and have just one?" she said.

There was plenty of anger directed at Andersen, a company founded in Chicago in 1913.

Brown expressed disappointment with the company's leadership, which failed to reach a compromise that would have staved off the federal obstruction indictment. She said company officials failed to show leadership by taking responsibility for the Enron debacle. "I would have to say that the outcome might have been different if a couple of people would've fallen on their swords early in this process," she said. "It's an issue of integrity."

Mary Anne Reilly, who headed Andersen's federal business tax practice in Florida and started her own firm in Tampa, said Andersen was partly a victim of White House politics. But she also said the Enron account was so big it posed an "inherent conflict" for Duncan or anyone else who might have managed it. "When you have one partner responsible for a $26-million engagement, no matter how you cut it, his career relies on making that client happy," she said. Reilly thinks publicly traded companies should be required to rotate their auditing firm every few years.

Sweeping changes in accounting rules may not be far off. Congress and the SEC are exploring reform, as is the Florida Board of Accountancy.

"We're going to continue to see a shake-up in our profession," said Byron Shinn, a Bradenton C.P.A. and chairman of the Florida Board. "Hopefully it'll bring us back to what we're really good at, which is audits and helping people doing taxes, and not these side ventures which are perceived conflicts or real conflicts."

Whether Andersen will survive to see these changes is debatable. Hundreds of clients left after the indictment was announced in April. After the verdict Saturday, Andersen pledged to end its auditing of public company clients, which numbered 2,300 before the scandal involving Enron's exaggerated profits.

Many state agencies are considering revoking Andersen's license to practice. Florida law prohibits Shinn from divulging whether an inquiry has been opened in the state, but it is widely thought that one is under way.

By the time the Florida Board decides whether there is probable cause to revoke Andersen's state license, the firm could be long gone. The remains of its Orlando office were recently acquired by Grant Thornton LLP. Sarasota recently laid off 65 employees from its tax technology division and agreed to send the other 197 to Vertex Inc. of Berwyn, Penn.

In Tampa, prospective or tentative deals with Ernst & Young, KPMG, Robert Half International, Deloitte & Touche and others have left a skeleton staff at the company's 40,000-square-foot offices on the 22nd and 23rd floors of Bank of America Plaza in downtown Tampa.

Space is so abundant at the office, which until the Enron scandal housed 182 employees, that a young accountant recently left his cubicle for an abandoned corner office.

Office manager Giusto doesn't think Andersen will survive the year.

"If they did," she said, "it would take another 89 years to build up."

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