Justice preparing to seek indictment against Andersen in Enron case

WASHINGTON (AP) -- The Justice Department prepared to bring criminal charges against Arthur Andersen after the accounting firm spurned a government deadline to plead guilty in the Enron scandal, sources familiar with the proceedings said Thursday.

Andersen accused the Justice Department of a "gross abuse of government power" and said criminal charges would be a "death penalty" against the firm. One person familiar with the matter indicated that federal obstruction-of-justice charges would be filed in Houston as early as Thursday afternoon.

A 9 a.m. Justice deadline for Andersen to plead guilty passed without any official word from either side, but in a letter to the department, Andersen lawyers signaled strongly that there would be no guilty plea.

Representatives of Arthur Andersen, which has admitted massive shredding of Enron-related documents by its employees, have been repeatedly threatened with indictment by federal prosecutors over the past week to 10 days.