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Produced & Maintained by Idaho Mountain Express, Box 1013, Ketchum, ID 83340-1013 
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Copyright © 2002 Express Publishing Inc.
All Rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Express Publishing Inc. is prohibited. 

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For the week of March 6 - 12, 2002

  Opinion Column

Dealing with the Big Five audit cheat

Commentary by PAT MURPHY


Regulators (yawn!) didnít care. Congress (ho-hum!) was emasculated by campaign donation IOUs.

So, thereís really only one way of dealing with the cancerous Big Five accounting firm of Arthur Andersen before deceitful audits mislead yet more thousands of investors into losing their life savings:

File lawsuits until Andersenís bank accounts are drained dry, and the metaphorical stake of bankruptcy is driven into its corporate heart.

The American marketplace canít afford the likes of Arthur Andersen. Whatever professional ethical code Andersen supposedly subscribed to, it rebuked it long ago in the interest of keeping marginal clients happy and fees flowing into its coffers, even as its executives knew that investors were left penniless by their faithless audits.

Andersenís cheery financial portrait of the equally dishonest energy giant Enron is no fluke. Wrecked lives and wiped out investments are scattered all over the country in the wake of Andersen audits, which are more fantasy than fact.

As recently as last week in Arizona, Andersen agreed to pay $217 million to 13,000 investors in the Baptist Foundation of Arizona ó an offshoot of the Southern Baptist Convention ó who lost some $570 million in what Arizona Attorney General Janet Napolitano called a Ponzi scheme (using new investments to pay off old investments). Andersenís Arizona managing partner was stripped of his license, but presumably can move to another state to use his special "skills" if Andersen remains in business

Thereís more.

Since 1999, Andersonís string of incompetent or fraudulent audits have led to other multi-million dollar lawsuit settlements ó $220 million in a case involving Waste Management; $110 million in the Sunbeam lawsuit, and $90 million in the wake of financial reports on Colonial Realty.

Now, Andersen has offered a $750 million settlement for investors in Enron who were misled into investing on the strength of Andersenís cheery report of Enronís soundness.

So, if that offer is accepted, Andersen will have paid more than $1 billion (with a "b") to settle lawsuits from angry victims of its obscene unethical behavior.

In each case, it refused to admit any wrongdoing.

No wrongdoing? Hah!

Wisely, a few major corporations have decided to drop Andersen as its auditor.

Perhaps the end is in sight for this predator run amok.

ē

The ruling Republican oligarchy in Boise has encouraged a new form of arrogance.

It allows state legislators to drop out of their official obligations, still collect salary and per diem expenses ĺ and delegate non-elected "substitutes" to cast votes on legislation.

The most in-your-face practitioner of this elitist attitude is state Sen. Ric Branch, from Washington County, just up the road from Ada County and the state Capitol.

Branch has missed dozens of sessions, while he claims to be pitching hay for his cattle. Meanwhile, heís asked a former aide to Republican Congresswoman Helen Chenoweth-Hage to cast his votes, although sheís not an elected representative.

Presumably, once this becomes a Republican custom, Idahoís attorney general can go on an endless fishing trip and designate his wife to write the stateís legal opinions.

Or, members of the Supreme Court can go skiing and ask their clerks to don the black robes and preside over the stateís high court.

The surprise is not that Sen. Branch is a goof-off and wants to be elected to a Legislature he doesnít particularly care to serve.

The real surprise is that Branchís Republican colleagues find no fault in his arrogance and slothful behavior, and apparently plan to do nothing about it ó such as at least withholding his salary, or, ideally, booting him out of the lawmaking body and appointing a replacement who takes electoral obligations seriously.

 


The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.