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White House orders review of Andersen contracts
FRIDAY, JANUARY 25, 2002

Last updated: 4:50 p.m. Eastern Standard Time.

The White House has ordered a federal review of all contracts with Arthur Andersen and Enron.

In a letter sent to the General Services Administration and copied to 10 federal agencies, Office of Management and Budget Director Mitch Daniels said questions have been raised about the policies and practices of the companies. "Some of these allegations are serious in nature and include charges of document shredding, manipulative accounting practices, and other activities that could reflect poorly on these corporate entities and their ability to provide daily work," he writes.

Daniels then directs the GSA to "determine whether their business practices are sufficient" to meet federal standards. He suggests the GSA consider suspending and possibly disbarring any future Andersen or Enron contracts.

Each federal agency who received a copy of the letter was provided a summary of its existing contracts with either company. Daniels said each should "ensure that existing contracts with Enron and Arthur Andersen are being performed in accordance with contract terms and proper business practices."

Left off the letter was the Department of Interior. The OMB did not have an immediate comment on why the department was omitted.

An Interior spokesperson had no immediate comment on on the White House request, which primarily affects Arthur Andersen. Andersen has taken on a lead role in the historical accounting of the assets of 300,000 American Indians.

The Office of Historical Trust Accounting, which Secretary Gale Norton created last summer, has been tapped for a number of projects. The Department of Justice has also retained Andersen for various Indian trust accountings.

Attorney General John Ashcroft was provided a copy of the letter. Other agencies which received the letter were: Health and Human Services, Housing and Urban Development, Defense, Treasury, Veterans' Affairs, the Nuclear Regulatory Commission, Transportation, and the National Archives and Records Administration.

Relevant Links:
General Services Administration - http://www.gsa.gov
Arthur Andersen - http://www.andersen.com
Enron - http://www.enron.com/corp

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