- The Washington Times - Sunday, March 31, 2002

Rep. Mark Kennedy, a certified public accountant, suggests the Justice Department might want to drop its criminal indictment of the Arthur Andersen if former Federal Reserve Chairman Paul Volcker takes control of the accounting firm.
"Having such a dramatic change as Paul Volcker stepping in should be given deference by the Justice Department," the Minnesota Republican said yesterday on CNN's "Novak, Hunt & Shields" when asked if the obstruction-of-justice charge against Andersen should be set aside.
Mr. Kennedy, who faces a tough re-election race and is known for not always following the party line, appeared on "Novak, Hunt & Shields" with Rep. Mike Ross, Arkansas Democrat, another freshman congressman who also has a reputation for independence and faces a difficult re-election challenge. Both Mr. Kennedy and Mr. Ross unseated four-term incumbents in 2000. Mr. Kennedy won by only 155 votes; Mr. Ross by 4,000.
In the CNN interview, co-host Al Hunt pointed out that Mr. Volcker has promised to "go in and clean house at Arthur Andersen" but needs the Justice Department to end its prosecution of the firm on an obstruction-of-justice charge related to its work for the Enron Corp.
"Otherwise, the company will probably go under," said Mr. Hunt, who wanted Mr. Kennedy's opinion, as one of the "very few CPAs in Congress," as to what Justice should do in this case.
"It's a pretty dramatic change to have Paul Volcker step in at Arthur Andersen," said Mr. Kennedy, who noted that some at Andersen are not pleased about the expected development or about the reforms Mr. Volcker has proposed.
"If [Mr. Volcker] does that, I think [Justice officials] should allow Arthur Andersen to rebuild as a firm that can re-establish the truth," the Minnesota Republican said.
"They've already offered to put a very substantial amount of resources on the table that can include, as part of a settlement, a very substantial amount to pay for damages."
At issue is the indictment a federal grand jury brought against Arthur Andersen on March 14, which charged the firm with obstruction of justice. Justice Department prosecutors accused Andersen officials of conspiring to destroy documents of the Enron Corp. in October, knowing that the documents were relevant to impending investigations into Enron's financial collapse.
Andersen warned Justice the 89-year-old company would go under if it were indicted because its clients would flee to rival accounting firms. The New York Times reported Friday that at least 100 former Andersen clients have done that so far.
Andersen said Thursday it is implementing the recommendations of Mr. Volcker, currently chairman of Andersen's independent oversight board, to revamp top management and to sell its consulting operations, which many have said constitute a conflict of interest.
Mr. Ross was not asked about the Andersen mess. But he was asked about his decisions to break with Democratic leaders and support President Bush's $1.35 trillion tax cut and oil drilling in the Arctic National Wildlife Refuge in Alaska. Mr. Kennedy opposed ANWR drilling.
Mr. Ross defended his votes on those issues yesterday. "When the president is right, I'll support him. When he's wrong, I'll say he is. I'm going to continue to fight for the traditional conservative small-town values that most of us in my congressional district in Arkansas were raised on and still believe in," the congressman said.


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