Louisiana bans future government contracts with Arthur Andersen

Posted 7:42AM on Thursday 4th April 2002 ( 23 years ago )

Louisiana's top government auditor has prohibited state and local agencies from signing new contracts with Arthur Andersen because of the accounting firm's indictment in the Enron scandal. Legislative Auditor Dan Kyle said Andersen will be allowed to finish audits it has under way. But the firm will not be approved for new contracts with government and quasi-public bodies for the time being, Kyle said in an interview Wednesday. "We're just being cautious to protect the interests of the state of Louisiana," Kyle said. The legislative auditor's office checks the qualifications of accounting firms that agencies want to use for internal audits and can veto a firm. The internal audits are routinely sent to the legislative auditor for review. "We would not allow them to engage in any additional audits until the situation is cleared up. We are allowing them to finish what audits they are currently involved in," Kyle said of Andersen. According to state records, Andersen currently has no contracts with state agencies and six contracts with local and quasi-public agencies. Hillary Crain, chairman of the Louisiana Gaming Control Board, said Wednesday that she sent a letter to casino companies doing business in the state, telling them that Andersen will no longer be acceptable. Last week, the New Jersey Casino Control Commission banned casinos in the state from doing business with Andersen. Crain said that the Louisiana board does not regulate auditors. But Kyle's action effectively makes Andersen unsuitable for the time being, Crain said. "We will have to notify the casinos that we can't accept their audits (from Andersen) since Kyle audits us," Crain said. The General Services Administration, which oversees many contracts for the rest of the federal government, banned Andersen from receiving federal contracts on March 15, a day after the firm was indicted with obstruction of justice for destroying documents related to its work for Enron. A spokesman for Andersen blamed Kyle's action on what the company calls an unwarranted indictment of the entire firm. "We are more than willing to answer any questions or concerns. We have a tremendous reputation of doing quality work in the state of Louisiana," said spokesman Patrick Dorton. "This is just one more example of the unfairness of the decision by the Justice Department to indict the entire firm and tarnish the reputations of thousands of innocent people."

http://accesswdun.com/article/2002/4/196480