New contracts are barred for Enron, Andersen

WASHINGTON -- The government suspended Enron and its former accounting firm, Arthur Andersen, from new federal contracts on Friday, citing evidence of misconduct a day after an indictment that charged Andersen with obstruction of justice.

Current contracts -- some $35 million for Enron and $60 million to $90 million for Andersen -- are not affected by the action announced by the General Services Administration.

Andersen said it would contest the suspension.

"To qualify as a responsible contractor, a company or individual must have a satisfactory record of integrity and business ethics," said the GSA, which oversees many of the contracts for the rest of the government and is Enron's biggest federal client.

The move came a day after a federal court unsealed a grand jury indictment charging Andersen with obstructing justice by destroying documents and deleting computer files related to its audit of Houston-based Enron.

It was the first indictment in a case that has roiled the White House and Congress and dissolved retirement savings of thousands of current and former Enron employees.

Rep. John Conyers of Michigan, senior Democrat on the House Judiciary Committee, told a Justice Department official Friday he was concerned prosecutors are not pursuing Enron and its executives "with the same vigor" they are showing toward Andersen.

Conyers already had asked Justice to consider appointing a special counsel to investigate Enron and Andersen.