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It's sadness and anger for Andersen alumni

The pride is gone for alumni of the accounting firm Andersen. Left are feelings of sadness and anger.

Andersen on Thursday got hit with a sweeping federal indictment charging the Big Five accounting firm engaged in massive document shredding to cover up the Enron scandal. It was the latest blow to the 89-year-old firm, which already was fighting to survive billion-dollar lawsuits by angry Enron investors and an exodus of clients.

"My emotions are sadness, as far as what's happening to Andersen, and anger at the political inconsistency and political posturing," said Duane Kullberg, who was Andersen's chief executive in the 1980s. "If there is a merger (of Andersen with another firm), obviously, the name will disappear."

As merger talks with two of its "Big Five" rivals unraveled amid liability concerns related to the collapse of the Houston-based energy giant, Kullberg reacted vociferously to the US Justice Department's announcement of an indictment of the firm on obstruction of justice charges.

"No one is sticking their head up to say: 'Wait a minute, they did wrong, and they admitted wrong, but let's not be vindictive in the process and let's do justice,'" Kullberg said.

The venerable firm with the "silk stocking" reputation for integrity has 85,000 employees at offices around the world. It has about 2,300 clients, and it has lost more than 40 since the start of the year, including blue-chip firms like Merck & Co.

"It's like watching water drip out of a faucet," said one consultant to the firm, citing the list of major clients defecting from Andersen, which racked up $9.3 billion in revenues last year.

BROAD BRUSH STROKE

Former Andersen manager Andrew Satherlie pities his former colleagues tarred with Andersen's role in the Enron debacle.

"I feel sorry for a lot of the analysts, consultants and managers, because of the broad brush stroke being painted of all Andersen people, of all Andersen audits," he said. "I don't think they were greedy, but they're unfortunately going to be the ones out on the street with their resumes."

Hundreds of Andersen staffers have posted their resumes on the Web, many anonymously, said Robert Epstein of the online accounting employment Web site (http://www.careerbank.com).

"The resumes are mainly from mid-level managers and senior accountants -- not partners," Epstein said.

Andersen, the smallest of the Big Five accounting firms, faces a slew of shareholder lawsuits related to Enron's collapse into bankruptcy in December. It also faces the loss of clients and workers worried about Andersen's tarnished reputation and wondering whether it can remain viable.

Andersen used to have a powerful culture of honesty, with its roots in the writings of founder Arthur Andersen, said David Rigby, a consultant who worked for the firm in the United Kingdom between 1967 and 1970.

"They (Andersen) were the only people who really made a fuss about ethics," Rigby said.

That may have changed in the go-go 1990s, when Andersen -- like its rivals -- realised the real money was in consulting. The Big Five firms started to undercut each other on price for auditing services, and used these as a springboard to sign up clients for more lucrative business.

Andersen, which early on admitted its Houston office shredded Enron-related documents, has fought hard to keep its name clean and keep the damage limited to a few Houston-based partners. But not hard enough, one former Andersen employee said.

"The way they handled (the Enron debacle) is not the way they would have advised their own clients to handle a crisis," said the employee, who wanted to remain anonymous. "Arthur Andersen himself must be spinning in his grave."

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