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."
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