Accounting anxiety

Andersen: The auditing firm hasn't lost any clients in Baltimore, but employees here are nervous about the future of the indicted company.

March 21, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

Fresh out of college and working for one of the country's largest accounting firms, 23-year-old Cindy Kolb had big plans. She was getting ready to move out of Towson and into a downtown apartment in June. She was going to kick in some money to rent a Dewey Beach house with friends this summer.

And most of all, she was banking on a long and fruitful career at Arthur Andersen LLP.

Then came the Department of Justice criminal indictment against Andersen last week on charges of obstruction of justice for shredding Enron Corp.-related documents. Now Kolb's biggest concern is whether she'll have a job in a few months.

"I'm just scared," said Kolb, who joined Andersen's Baltimore office in September. "I'm just not sure what's going to happen. I've put off moving. I'm not even sure my company will be around next year. My life is on hold now. I've got six months' experience. That doesn't make me the most sought-after person in the world.

"My mom calls daily, more than once a day," Kolb said. "If I want to move home or need money, she says I know who to call. I'm glad I came here. I don't regret that. But I am worried."

Across the country, thousands of Andersen partners and employees are fighting similar fears as high-profile clients drop the firm and two other Top Five accounting firms back out of merger talks.

Andersen struck back this week with letter-writing campaigns, newspaper ads and written assurances to clients that the 88-year-old firm might be down, but it's not out. It's holding rallies in major cities today, including at the Capitol in Washington.

Yesterday, as hundreds of employees demonstrated outside the U.S. District Court in Houston, the company pleaded not guilty and won its bid for an early trial, which is set for May 6.

"This is much less a firm strategy and much more of a spontaneous outpouring of Andersen people in local offices discussing their feelings about being unfairly tarnished by this indictment," said Pat Dorton, an Andersen spokesman based at its Chicago headquarters.

"There are just many people and offices around the country that are writing members of Congress and speaking to the media and publicly expressing their feelings."

And what many employees are saying with much anger is that the criminal charges are unfair. Calling the indictment a "death blow," Andersen says it has not only tainted the company's first-rate reputation, but also jeopardized the livelihood of 85,000 employees worldwide who never dealt with Enron, much less knew that the Houston energy company was a client.

Locally, the Baltimore office has not yet lost an employee due to Enron fallout, but managing partner Scott Somerville says he doesn't know how long his workers can afford to be loyal.

As 10 partners and 235 employees here continue auditing companies and checking the final numbers on year-end financial reports, they are being inundated by weekly calls from headhunters and peppered with questions daily from anxious clients, he said.

"We have cooperated, we have worked within the system and we have come forward and said we made a mistake," said Somerville, who has been with Andersen for 26 years. "We were being helpful, doing the right thing and we said we will make amends. We have been punished as a result.

"They have indicted 85,000 people for what a small group of people did. It is unprecedented. That is devastating to an organization like ours. That is devastating to the 245 people here in Baltimore."

Andersen established its presence in Baltimore in 1966. In August 1999, the well-regarded local office moved to more spacious and highly visible quarters at the Inner Harbor's Power Plant building. Its clients include such local heavyweights as the Baltimore Ravens, Carefirst BlueCross BlueShield and Sinclair Broadcast Group Inc.

Somerville says the firm has not lost any Maryland clients, but nationally, Andersen has lost dozens of important clients such as Federal Express Corp., Delta Air Lines and Merck.

Yesterday, banking company BB&T Corp. reversed a January decision to stick with Andersen because of the indictment, ending a 36-year relationship.

"Our clients here are committed to supporting us," said Jigisha Hanel, 34, an audit manager in Andersen's Baltimore office for four years. "But they've got shareholders and boards they answer to. I don't how long our companies can hold on.

"On the day of the indictment, one of my clients called me and said they had gotten two phone calls from other accounting firms telling them to keep their options open. It's really sad."

Meanwhile, employees like Lara Obray continue fielding calls from headhunters trying to lure her away from what many in the industry are calling a "sinking ship."

"I had three calls the day after the indictment came out," said Obray, 25, who has been with the firm for almost three years. "They said, `You may want to recheck your career. Rethink your future.' My dad wants me to find out what's out there. My boyfriend says I should keep my eyes open.

"I don't want to bail. I want to go down with the ship."

Sun staff writer Paul Adams contributed to this article.

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