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Feds indict Andersen in Enron collapse
WASHINGTON -- The government secured its first indictment in the politically charged collapse of Enron Corp., accusing the Arthur Andersen accounting firm of obstructing justice by shredding documents and deleting computer files about the energy trading company.
The one-count indictment, announced Thursday, was returned last week by a federal grand jury in Houston, where Enron is based, Deputy Attorney General Larry Thompson said.
"The firm sought to undermine our justice system by destroying evidence," Thompson, the department's No. 2 official, said at a news conference.
Andersen said the criminal proceedings were tantamount to a "death penalty" against the firm.
The indictment alleged a possible motive for the shredding, saying that Andersen was aware of a wide range of unfavorable financial information about Enron -- information that was unavailable to the investing public.
"Andersen and Enron ... improperly categorized hundreds of millions of dollars," said the indictment. Just days before the destruction began, Enron publicly corrected its books, reporting a $1.2 billion drop in the company's value.
Andersen said in a statement said the indictment was "a gross abuse of government power."
"A criminal prosecution against the entire firm for obstruction of justice is both factually and legally baseless," said Andersen, which has sought to lay blame for the document destruction on its lead Enron auditor, David Duncan, and others in its Houston office.
Duncan, who was fired by Andersen, is cooperating with investigators, said his attorney, Vince DiBlasi.
Enron had no comment on the indictment.
Thompson said the Justice Department's investigation into Enron and Andersen, including actions by partners at the firm, was continuing. He held open the possibility that a plea agreement could be worked out with Andersen.
The company's collapse cost millions of investors their money, while thousands of current and former Enron employees lost the great bulk of their retirement savings. Congressional investigations of Enron have focused on the complex web of partnerships that helped the company hide debt and post unrealistic profit figures.
The Securities and Exchange Commission also is investigating.
Andersen had been given a 9 a.m. Thursday deadline to agree to plead guilty.