ml> U.S. Congressman Cliff Stearns (FL06)- Press Release

NEWS FROM

North Central Florida's Congressman

CLIFF STEARNS

FOR IMMEDIATE RELEASE
January 24, 2002		 CONTACT: PAUL FLUSCHE
(202) 225-5744

STEARNS QUESTIONS WITNESSES ON DESTRUCTION OF ENRON DOCUMENTS

ANDERSEN EMPLOYEES APPEAR BEFORE HOUSE COMMERCE SUBCOMMITTEE

WASHINGTON, JAN. 24, 2002 - "I am angered that a previously reputable company, Arthur Andersen, is the reason we are holding this hearing," stated Rep. Cliff Stearns (R-FL) during his opening remarks. "Apparently, Andersen expressed concern that its dealings with Enron would harm Andersen's reputation -- I can unequivocally state that Andersen's now wounded reputation was self-inflicted."

Today, the Subcommittee on Oversight and Investigations held a hearing on the destruction of Enron-related documents by Arthur Andersen personnel. The point of the hearing is to determine why Andersen employees working on Enron were reminded of the company's document retention and destruction policies after Andersen knew of the Securities and Exchange Commission (SEC) inquiry. Asked Stearns, "What was the point of 'reminding' employees to comply with this policy? This document retention policy is also a destruction policy, did this 'reminder' serve as a codeword to destroy the documents?"

The panel learned that Andersen personnel knew about the serious risk of litigation resulting from Enron's practices, that the SEC had begun an informal inquiry into Enron transactions, and that a class action suit had been filed against Enron regarding these transactions. Despite these circumstances, Andersen continued to allow the destruction of documents until officially notified of pending litigation on November 9, 2001. "I am not convinced that Mr. Duncan acted unilaterally in destroying documents," added Stearns, "I believe that there is more behind this destruction."

Stearns pointed out other issues to be addressed in coming weeks. "As Chairman of the Commerce, Trade & Consumer Protection Subcommittee with jurisdiction over the Financial Accounting Standards Board, I would like to know if our accounting standards are responsive to today's challenges posed by complex business and financial transactions, or are companies, like Enron, simply ignoring these standards and placing investors at risk?"

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