The White House denied on Thursday a senior Democrat's allegations that its 2001 energy plan was crafted to benefit Enron Corp, as auditor Andersen confirmed its executives discussed debt kept off the energy trading giant's books long before the deals triggered its collapse.
Houston-based Enron fired Andersen as its auditor, blaming it for destroying Enron documents government investigators were seeking for a probe into the energy trader's aggressive and murky bookkeeping, while the top US securities regulator proposed tougher accounting oversight.
But Andersen denied that a memo about off-book debt meant the accounting firm knew about any improprieties, despite concerns over whether the auditor should have questioned Enron's finances further, or whether an Enron consulting contract that paid it US$1 million a week in 2000 kept the accounting firm mum.
The White House on Thursday tried to distance itself from the widening scandal, denying its energy plan had been crafted to benefit Enron, US President George W. Bush's biggest political patron. A White House spokesman called a senior Democrat's report on the matter a "waste of taxpayers' money."
The White House also rebuffed repeated calls for the release of information about contacts between Vice President Dick Cheney's energy task force and energy companies, including Enron.
New Watchdog Proposed
In response to the Andersen-Enron debacle, Securities and Exchange Commission Chairman Harvey Pitt called for a supervisory body with new powers that would eclipse those of the profession's present overseer.
"We initially envision a public body that will be dominated by public members with two primary components -- discipline and quality control," Pitt said at an afternoon news conference. "We are at the early stages of this proposal and many details remain to be worked out."
Enron filed for the biggest bankruptcy in US history last month, throwing thousands out of work and leaving investors holding worthless shares in the once giant energy trader.
The Andersen memo, confirmed by the company, relates how a meeting of top managers had long discussions on Enron's myriad off-shore partnerships and moves to keep debt off its books. The memo also mentions "conflicts of interest" involving an Enron chief financial officer who ran some of the partnerships.
Andersen spokesman Charlie Leonard said the meeting described in the memo of Feb. 6 was simply a standard annual review of Enron. The executives discussed whether the auditor should retain Enron as a client, he said.
`Nothing Improper'
"Nothing in the meeting or the memo indicated that any illegal actions or improper accounting was suspected," Andersen said in a statement late on Thursday. "It was not until [Enron executive Sherron] Watkins notified the firm ... that we became aware that individuals within Enron believed that there may have been accounting improprieties."
Enron Chairman and Chief Executive Ken Lay said the directors decided to fire Andersen at a meeting on Thursday.
"We can't afford to wait any longer in light of recent events, including the reported destruction of documents by Andersen personnel and the disciplinary actions taken against several of Andersen's partners working in its Houston office," Lay said in a statement.
Andersen viewed the firing as moot, however. "Our relationship with Enron ended when the company's business failed and it went into bankruptcy," said Andersen spokesman Patrick Dorton.
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