Arthur Andersen LLP is using its 28,000 employees to fight obstruction of justice charges in a campaign intended to keep clients, energize workers and sway public sentiment.
Through public rallies, newspapers ads and phone campaigns, the company is protesting the government's March 14 indictment for shredding Enron Corp documents. It's a turnaround from the firm's past policy of forbidding employees to talk to the media.
"They must still have some hope they can send signals to their remaining clients that they're viable," said Julia Grant, an accounting professor at Case Western Reserve University in Cleveland.
PHOTO: REUTERS
A group of Andersen partners is coordinating the response to the indictment -- including public protests -- while the rest are focused on running the business day to day, said Jack Gelman, a partner in marketing and strategy in the New York office.
"While this firm goes through its death throes, which will most likely end in the demise of Arthur Andersen as we know it today, these people want to leave with dignity," Gelman said.
The Houston Chronicle reported yesterday, without citing its sources, that Andersen will enter into court-ordered mediation talks with those who have sued the company, including Enron, in Boston tomorrow.
More than 4,000 workers marched on downtown Chicago Friday, capping a week in which employees flooded the US Justice Department with phone calls and held smaller rallies in Philadelphia and Washington. Enron's former auditor ran a two-page ad in the Wall Street Journal that read: "Injustice for all."
Thousands of workers marched in a six-block circle from Andersen's Chicago headquarters around the federal complex and back in 32-degree temperatures Friday.
A dozen employees interviewed, all wearing buttons saying "I am the real Andersen," said they hoped the rally would influence the Justice Department.
Joe Karczewski, a tax partner in Chicago who has worked at Andersen for 18 years, said the demonstration was to show clients that the company wasn't giving up.
The overall strategy is odd given that Andersen has admitted shredding documents, said Richard Breeden, a former Securities and Exchange Commission chairman. "You don't get much of a tone of any remorse from Andersen that they did something wrong," Breeden said.
Andersen has lost more than 50 US customers this year.
Clients in China, Chile and New Zealand and six major US companies dropped Andersen Friday.
Andersen pleaded innocent to criminal charges it obstructed the US government investigation into the collapse of Enron, once the world's largest energy trader. The criminal charge is the first filed as part of the probe of Enron's bankruptcy. It's also the first criminal charge against a major accounting firm.
Andersen, the fifth-biggest accounting firm, this week won its demand for an early trial. It's set for May 6.
The Justice Department has been flooded with phone calls and e-mails by Andersen employees protesting the indictment. Justice Department officials described the campaign as a "nuisance."
One e-mail sent at 1:06pm Friday from an address at Andersen.com to a Justice Department official said, "Take your case to court. You're going to lose. You're already a loser. You work for the government."
Andersen told employees for months not to talk to the press, said one partner. That policy changed following the government's indictment, he said.
"We've been told to be quiet for months and months and what did it get us? We got stabbed in the back," said Randall Green, an Andersen partner in Dallas. "People are not in the mood to be quiet anymore."
Outside observers say the campaign is unlikely to improve Andersen's fight with the government or stop the exit of clients.
"The future is very dim at this point," said Arthur Bowman, editor of Bowman's Accounting Report, an industry newsletter. "Justice has taken action and Justice is not going to be swayed by this."
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San