- The Washington Times - Friday, March 22, 2002

CHICAGO (AP) Employees of Arthur Andersen LLP, who have been largely silent until now about their firm's travails, are fighting back in an attempt to save the company from collapse and save their jobs.

Protest rallies yesterday morning in Philadelphia and Washington, coupled with a grass-roots lobbying campaign and full-page newspaper ads, show a feistier public attitude as Andersen fights the criminal indictment that could put the 89-year-old accounting company out of business.

In Philadelphia, about 600 people in bright orange T-shirts reading, "I am Arthur Andersen," converged on a park near the firm's branch office, an office with 900 employees.

"These people have never worked on an Enron account, they never did any shredding, but like 80,000 other people at Andersen, they're part of this indictment, and they don't deserve to be," said Andersen partner Bill McCusker.

Also yesterday, Arthur Andersen affiliates in Hong Kong and China said they would merge with rival accounting firm PricewaterhouseCoopers.

The Asia-Pacific affiliates of Andersen had unanimously supported a global combination with rival KPMG earlier this week, saying they would pursue it even if similar talks with KPMG in Europe fell through.

But the Andersen accountants in Hong Kong and China decided it would be better to go off on their own with PricewaterhouseCoopers, which is slightly larger here, said Yvonne Chan, marketing manager of Andersen in Hong Kong.

Andersen's lawyers pleaded not guilty Wednesday to an obstruction of justice charge and called the first indictment to arise out of the Enron Corp. collapse "senseless."

"We would not put our clients at risk with something like that," Gene Frauenheim, managing partner of the beleaguered auditing firm's Houston office, said after the company's court appearance Wednesday.

Employees wearing "I am Andersen" T-shirts and carrying "Save Andersen" placards ringed the Houston courthouse Wednesday where Andersen entered the plea.

"We wanted people to know there are faces that go with Arthur Andersen," said David Howard, an Andersen employee for 28 years, at the Houston rally.

Executives have urged employees to express their anger about the indictment to their congressmen and the Justice Department.

The company also took out full-page advertisements in leading newspapers, headlined "Why we're fighting back." They called the government's action "a tragically wrong indictment of our whole firm" and "a political broadside rather than a focus on the facts."

Andersen officials insist the employees' efforts are not so much directed from above as tapping into frustrations shared throughout the firm, whose name has crumbled almost overnight as a result of its role as auditor for bankrupt Enron Corp.

"This is less the firm's strategy than a grass-roots expression of innocent people's feelings about being unfairly tarred by the actions of a few," said spokesman Patrick Dorton.

Accounting industry experts voiced doubts about whether the campaign can work, particularly with the exodus of blue-chip clients growing daily. BB&T Corp., one of the nation's largest consumer banks, defected yesterday, a day after Houston energy company Dynegy Corp. did so. Both replaced Andersen with PricewaterhouseCoopers.

Edward Ketz, associate professor of accounting at Pennsylvania State University, called it "a last desperate effort in the PR game" to get Congress to step in and keep Andersen from going out of business.

"I think the story of Enron has resonated basically to the bone for so many Americans that they want justice done," Mr. Ketz said. "Rightly or wrongly they are looking at Andersen in part for that justice because Andersen obviously had an audit failure here in approving things that shouldn't have been done."

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