Imagine having to list these two employers on your resume: Enron Corp. and Arthur Anderson LLP. Not a small number of accountants do.
Both companies have become synonymous with corporate sleaze, and will remain so for years, if not decades. They are the pariahs of the financial world.
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Yet because of the incestuous auditing relationship between the two firms, many accountants skipped back and forth between them and will have to carry both black marks on their resumes, even though they maintain they had nothing to do with the malfeasance.
One accountant – who several years ago left Andersen, now under federal indictment for shredding evidence, to work for Enron, now bankrupt – says no one ever imagined the dark turn of events.
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Both Enron and Andersen were well respected then, she says. Job applicants were pounding on their doors.
"Many of the accountants I worked with at Enron had worked at Andersen," she said. Like many of them, "I had no ambition to become a partner (at Andersen), so it was mainly for the experience and resume prestige that I went into public accounting."
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"So much for the resume, eh?" she said.
The revolving door between Enron's Houston headquarters and Andersen's large Houston operations really began spinning in the mid-1990s, when Enron outsourced its internal auditing department to Andersen, its outside auditor. Most of Enron's internal auditors, who didn't necessarily want careers in public accounting, were nonetheless traded to Andersen.
Andersen even set up shop inside Enron's downtown tower, eventually assigning some 100 staffers there.
Many, like the former Andersen accountant, who wished to go unnamed, left and went to work for the energy giant.
"Several accounting managers and directors came over from Andersen," the accountant said.
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It was an easy fit, she adds, because Houston accountants had a lot of crossover technical knowledge.
"Keep in mind that Andersen still is the largest public accounting firm in Houston, with the most well-regarded oil-and-gas auditing division among all remaining Big 5 (accounting) firms," she explained.
Even whistleblower vice president Sherron Watkins jumped to Enron in 1993 from Andersen, where she was an auditor for 8 years.
In fact, many Andersen accountants were hired at Enron by former Andersen managers.
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Analysts say the incestuous job-hopping may have made it easier for Enron senior management to sell its external auditor on its financial schemes, such as shady off-the-books partnerships and high-risk exotic commodities trading.
"The general premise is that Arthur Andersen would bend over backwards for Enron," said Columbia University securities law professor John Coffee, in an interview with WorldNetDaily.
The cozy ties, moreover, may have led Andersen to shred evidence when the Enron scandal broke. Andersen admits the shredding resulted from collusion between some Enron employees and members of Andersen's Houston office.
"My overall feeling about the relationship with Enron and Arthur Andersen is that it was obviously too cozy," said the accountant who worked for both companies.
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"Given that so many of us came to Enron straight from Andersen makes it hard to be skeptical of each other," she said.
"As an auditor, you want to get along with your client," she added. "But I was taught that you still have to get to the facts, because you are providing a service to the public."
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