Enron, Anderson swap accusations

WASHINGTON -- Enron Corp. and its auditor, Arthur Andersen, are trying to pin responsibility on each other for allowing questionable financial practices to continue and push Enron toward bankruptcy. Enron abruptly fired Andersen, citing its destruction of thousands of documents and its accounting advice.

Sniping back, Andersen said Thursday its relationship with Enron ended in early December when the company slid into the biggest corporate bankruptcy in U.S. history. Thousands of employees lost their jobs and many had their retirement accounts -- predominantly in Enron stock -- essentially wiped out.

Andersen's chief executive, Joseph Berardino, said the accounting firm's officials dutifully informed Enron's general counsel after learning of the concerns of an Enron executive in August. Enron told the Andersen officials that it had engaged a law firm to investigate, Berardino noted.

Both Enron and Andersen are under increasing scrutiny from Congress and federal law enforcement agencies for their roles in the failure of the world's largest energy-trading concern. One of the Andersen auditors has been talking freely to congressional investigators, and key employees in both companies have blamed senior officials for the debacle.

"We can't afford to wait any longer," Enron Chairman Kenneth Lay said in a statement, announcing that Enron's board of directors had dismissed Andersen -- which earned huge fees over the years from Houston-based Enron.

The firing came as evidence grew that the Andersen auditors had serious questions about Enron's financial practices as early as a year ago, but did nothing to correct them.

Enron announced it was severing Andersen on Thursday just hours after the House Energy and Commerce Committee demanded that Andersen provide more documents detailing what the auditors knew about Enron's use of partnerships to keep hundreds of millions of dollars in debt off the company's books.