ARTHUR ANDERSEN
and
THE PHOENIX PROJECT
Sightings from The Catbird Seat
~ o ~
February, 2007
How to Save Your Business,
Your People & Yourself
Ross Murakami and KMH rise out
of the ashes of Arthur Andersen
David K. Choo, Hawaii Business
Ross Murakami first heard about the Arthur Andersen accounting scandal in November 2001 from an unexpected but reliable source: his mom. Mrs. Margie Kanemitsu called her accountant son from her home in Hilo, after watching a CNN broadcast.
“Ross, did you hear what happened to one of your clients, Enron?” she asked.
The younger Murakami was a partner at Arthur Andersen’s thriving 42-person Honolulu office. The large international accounting firm served as the financial auditor of Enron, a giant energy trading company based in Houston. That morning, Arthur Andersen had announced a restatement of an earlier audit of its client.
“Don’t worry, Mom. We’ll be fine,” he said.
Mothers can be like that. Worry, worry, worry. But, then again, you know what they say about a mother knowing best.
Within days, through a seemingly never-ending series of news reports, Murakami, his staff and the rest of the country watched Enron implode, sucking its staff, subsidiaries and investors down an irresistible vortex. Curiously, one of the first down the financial and political black hole was the auditor, 88-year-old Arthur Andersen, not only its Houston office, but nearly everyone else, including the people in far-off Honolulu.
Their ordeal—a sort of financial purgatory of watching and waiting—lasted for more than six months. Then, in a matter of weeks, they built a new firm while still running the terminal Arthur Andersen. The whole saga was a harrowing crash course in how to save a business, how to build a business and how to do the right thing.
“It was emotional. It was exhausting,” says Murakami of his office’s sudden fall and eventual rise. “It was also extremely rewarding.”
THE YOUNG PARTNER
The year 2001 was promising to be a good one for Murakami. Hawaii’s economy was continuing its steady recovery from a decade-long slowdown, which meant a busy year for service businesses like accounting firms. In addition, in the fall, the then-37-year-old accountant made partner at Arthur Andersen. Having joined the company 14 years before, straight out of the University of Hawaii at Manoa, Murakami was the first partner in the Honolulu office to have begun his career at the Honolulu office.
Murakami started his new position at Arthur Andersen on Sept. 1st.
“Here I am a new partner, and, 10 days later, we are hit by one of the most tragic events in U.S. history, which, among other things, had a big impact on business in general,” says Murakami. “Then, two months after that, Enron. Kaboom!”
Even though his once promising year was beginning to look nightmarish, when Murakami put down the phone after speaking with his mother on that November morning, he was confident that the scandal would pass. After all, every one of the big five accounting firms had had a questionable audit at one time or another in their histories. Some of them had even been sanctioned by the Securities and Exchange Commission for their indiscretions. But they all had weathered their respective storms. It seemed highly unlikely to Murakami that the actions of a few people in his company’s Houston office could reverberate all the way to Honolulu.
Around the office, he reassured his staff: This, too, shall pass. Corporate was tight-lipped about the growing scandal, preferring to wait for the legal and political dust to settle. Murakami and Honolulu office managing partner Randy Karns met with their local public relations consultant, who advised that they do the same. People wouldn’t appreciate public protests or protestations of innocence, they were told. Especially if they were protesting their own innocence. It would be bad form, especially in Hawaii.
Corporate sent representatives to reassure the Honolulu staff that the accounting irregularities were part of an isolated situation in Houston. They pointed to the firm’s vast capital base. Again, there was nothing to be alarmed about.
However, in the first quarter of 2002, as news reports announced one legal development (and lost client) after another, tensions were running high in the office. To relieve the anxiety, Murakami and his staff scheduled visits to members of Hawaii’s congressional delegation and met with Gov. Ben Cayetano. The sessions were gut-wrenching and emotional. “How could this be happening to us?” “Why was Arthur Andersen being made a scapegoat?” they asked. “We haven’t done anything wrong,” they insisited.
The leaders listened patiently and offered their sympathies and support.
“We knew they [Hawaii’s congressional delegation and the governor] wouldn’t be able to do much for us. How could they? It would be like stepping in front of a speeding truck,” says Murakami. “But we needed an outlet for all the anxiety, anger and emotion. We needed to vent.”
In Arthur Andersen’s 29th-floor office in the Pacific Guardian Life Center, the staff continued to vent with management’s full support and participation. Someone began writing encouraging messages with a Magic Marker on a Plexiglas wall off the reception area. People began writing words of support, inspirational quotes from leaders like Gandhi, or words of anger and defiance. They even had lighthearted activities in which they took out their frustrations on certain Department of Justice officials.
“You had this pride about working for Arthur Andersen and then there was this outrage that all this was going down and no one could do anything about it,” says Harvey Rackmil, chief financial officer for HONBLUE, who was the senior member of Arthur Andersen’s tax department from 1998 to 2002. “We were outraged at the government. We made ‘I am Arthur Andersen’ T-shirts for ourselves, and we went downstairs and took photos of each other. Arthur Adersen for the longest time didn’t fight back. They thought that we would get through it. Then the indictment was handed down and that was that.”
THE OLD PARTNER
In the fall of 2001, Randy Karns was quietly planning a second career away from public accounting. The 50-something Karns, who had opened Arthur Andersen’s Honolulu office nearly 20 years before, had been offered an early retirement package from the corporate office—mandatory retirement, actually. That was fine, because he had recently been offered his dream job. Today, Karns won’t disclose what the dream position was, or with whom. He does say that it was with an organization for which he had a passion, and that the position was both prestigious and lucrative.
Karns, who had conducted audits of Hawaii companies since the late ’60s, had spent his entire career with Arthur Andersen, starting out in the firm’s Los Angeles office. He was extremely proud of his company and the quality of work it had done, so 2002, had promised to be not only a sweet beginning to a new career, but a sweet ending, as well. However, as the feeding frenzy around the accounting scandal grew, the senior partner knew that his work at Arthur Andersen wasn’t done. He asked his potential new employers if he could have a little more time to decide about the position. They agreed.
“My first two thoughts were: What’s going to happen to our people? And what’s going to happen to our clients?” says Karns. “This was more than just an economic contract. There is a real responsibility when you are developing people or serving them.”
Karns began an options analysis, studying the feasibility of joining another firm, shutting down, or starting a new one. Early findings confirmed what he and Murakami already knew. None of the other big-four accounting firms were interested in purchasing the Honolulu practice, especially with so many lucrative Arthur Andersen offices ripe for the picking on the Mainland. Other firms in town were interested in Arthur Andersen Honolulu’s individual clients and personnel, but not the office as a whole.
On March 14, 2002, a federal grand jury in Houston indicted Arthur Andersen on one count of obstructing a Department of Justice investigation by destroying documents. After the announcement, Karns and his management team kicked things into high gear, calling an office-wide meeting in which Karns laid all the options on the table, including his recent job offer. No one was going to abandon ship, he assured his staff.
Subsequent informational meetings, held in a common area, spilled out into the halls. The meetings were held every two weeks, then weekly. Sometimes there was an agenda, like when Karns outlined what had happened with Enron. Sometimes it was just to talk story.
“We had meetings whether we had something to say or not. You would be surprised. You always have something to talk about,” says Karns. “Our staff wanted to know if Ross and I had heard anything, and if we hadn’t, did that change our thinking, if that makes sense. Even knowing that there is nothing new can be comforting.”
“Randy was a great leader,” says Rackmil. “He was the guy delivering the message, fireside-chat style. You knew he was going to do everything in his power to help. He had been here a long time and had a lot of loyalty in the community. As long as the clients stayed, we would be OK.”
All along Karns offered his options analysis and assessment without interjecting a prejudgment one way or another. This was a decision for the employees, not him. He was still considering his dream job.
Then, one day, he accidentally walked in on a small group of staff who were working on a gift of gratitude to the senior partner. Karns realized that he already had his dream job.
“I came home and told my wife that we were going forward. That [other] job would have been a lot of fun to do. But it [his decision] really wasn’t about money or prestige,” says Karns. “They felt so strongly about the firm, its mission, its clients and its people. They were doing all of this on top of dealing with all the stress of getting their jobs done. I felt privileged to be a part of them.”
THE NEW PLAN
Of course, Murakami’s mother wasn’t the only one outside the firm who called him about Enron and the future of Arthur Andersen. “I started fielding calls from clients, who would say: ‘Eh, Ross, how come you didn’t let me do all those things?’ I told them that I didn’t know why they did that,” says Murakami. “I told them we don’t do that. That’s not how business is done. We had a very solid client base. They knew us, and they knew we had always been very honest and open with them.”
Early in the crisis, Murakami and Karns hit Bishop Street hard, meeting with as many of their clients as they could. Sometimes, as at the gatherings with their staff, the two partners had little new information to impart to their anxious clients. There were a lot of uncomfortable discussions, some in front of boards of directors. But every client was contacted and spoken to face to face if possible. After Andersen’s indictment in March, the meetings got more urgent, going from heart-felt reassurances to the beginnings of a plan for a new firm.
“We kept them [our clients] informed and we told them that we were trying to pull something off that would be a stand-alone entity,” says Murakami. “We said we couldn’t tell them right now if it was going to be successful or not. We couldn’t wait till we were solid to let them know. It wasn’t about us. It was about them.”
At first glance, the partners’ plan, which they would appropriately name “Project Phoenix,” seemed simple. They, along with Peter Hanashiro, who was slated to be named partner at Arthur Andersen before the crisis, would buy the firm from corporate. They would continue to provide the same good service that they always had, except the new firm would no longer audit large publicly traded companies. But the new firm would be free from a rigid corporate fee structure and nimble enough to respond to changes in the local marketplace.
That none of the national firms were interested in picking up Arthur Andersen Honolulu only confirmed to the partners that Hawaii was no longer a strategic location for the national firms (see sidebar on page 32), and that, Enron or not, Arthur Andersen would have left Honolulu, probably sooner than later.
However, Karns, Murakami and Hanashiro weren’t just starting a new firm. They were also running an existing one, with a client base they needed to preserve. In addition, they only had weeks, not years or months, to set up their new firm. New networks and telephone systems would have to be installed. Amazingly, they didn’t know exactly when the switch over would happen.
The partners called a meeting of the staff and unveiled Project Phoenix. They told the gathering they were confident that the firm, KMH LLP, would work in the changing marketplace, but they could only give the staff one assurance: one guaranteed paycheck as employees of the new firm. The staff overwhelmingly agreed to form a new company. The meeting would be their last fireside chat.
In June, Arthur Andersen corporate pulled its offices’ licenses; the dissolution of the firm was finally under way. The Honolulu office was the only one of Arthur Andersen’s more than 80 offices nationwide that was staying in tact. Therefore, it was a relatively small purchase, an office of 42 people, with two partners. In fact, it was one of the smallest of the more than 4,000 financial dealings that the firm transacted as it dissolved its assets.
“We were talking to Andersen to let us move on. It was traumatic to be hanging on and waiting to be cut loose,” says Murakami. “But they couldn’t do it because they had to go through a particular process.
One month passed. Then another. KMH had one, two and then three false starts. Then the sale finally went through, one of the last transacted by Arthur Andersen. On the evening of July 31, 2002, Murakami turned off the lights on Arthur Andersen’s offices. The next morning, he came back to Suite 2900 and flipped the switch on KMH LLP.
FLIGHT OF THE PHOENIX
Murakami made that August’s payroll, and has made every one since. But KMH has done more than just deliver paychecks on time. According to Murakami, the firm’s revenues have doubled since he switched off the lights on Arthur Andersen, with 20 percent growth for four years in a row. The staff has also doubled, growing from 42 to 85 in late 2006.
Throughout the ordeal, KMH lost only two or three tax clients and a handful of national and international clients, several of whom later rehired the firm in other capacities. KMH’s vision of a locally owned firm with a local focus along with national expertise has taken hold. Coincidently, it was also one that had been floating around in the heads of many experienced accountants in town.
“Even before Andersen imploded, we had discussed the possibility of creating a local firm with national ties. That is the way the market is moving,” says Wilcox Choy, partner at KMH and former partner at big four accounting firm, Grant Thornton. “But there just wasn’t enough critical mass to do that. Then Andersen went down and after talking with them, we realized we were on the same page.”
KMH started with three partners (Karns, Murakami and Hanashiro) and now has six. Alan Yee joined the firm from Grant Thornton’s Honolulu office in 2002 and Al Fernandez from Ernst and Young in 2003. Both run KMH’s tax practices. Alton Ohira, former head of KPMG Honolulu’s insurance and audit practice, came on board in 2003 and Wilcox Choy, once in charge of Thornton’s audit practice, also in 2003.
Murakami says the firm’s spectacular growth should be credited to the new partners and the business they have brought in. He also points out that none of it would have been possible without the faith, hard work and understanding of Arthur Andersen’s/KMH’s staff and clients. “The business people here are really very caring, and they were really concerned if we were going to make it or not,” says Murakami. “At first, we didn’t have a lot to tell them, and then, when we did have a plan, we asked them to believe in us. And they did. They also helped out in some very important ways. For instance, they started to pay their bills early.
“Also, our people were so patient and understanding while they were working so hard,” continues Murakami. “We kept asking them to hold on, just hold on. And they did.”
Karns is retired now. He still has an office at KMH and comes in several times a week. The dream job offered to him four years ago went to another candidate, who Karns says has done a far better job than he could have done. Considering what Karns did for his own company, that remains a debatable point. But the retired partner will have none of that. He, instead, deflects all credit to his colleagues, staff and clients.
“I wish I could tell you that it was all brilliantly staged, but it was almost like I didn’t have a choice. It was the right thing to do,” says Karns. “It was the character of our people and our clients. Those are the people who you should build the statues of, not me.”
~ ~ ~
Timeline: The Fall of Arthur Andersen
Aug. 15, 2001
Enron vice president for corporate development Sherron Watkins writes a seven-page
letter to her boss, CEO Kenneth Lay, warning of accounting irregularities at the oil and
natural gas trader. “The business world will consider the past successes as nothing but an
elaborate accounting hoax,” she writes.
Nov. 8, 2001
Enron revises its financial statements for the previous five years. Instead of showing huge
profits, the company now says that it actually lost $586 million.
Jan. 10, 2002
Arthur Andersen acknowledges that it destroyed Enron documents.
Jan. 15, 2002
Arthur Andersen fires chief Enron auditor David B. Duncan.
March 15, 2002
Arthur Andersen is indicted by a federal grand jury in Houston on one count of obstruction
of justice for shredding documents and deleting computer files regarding Enron.
March 26, 2002
Arthur Andersen CEO Joseph F. Berardino steps down amid an exodus of clients and
overseas partners.
June 15, 2002
After a six-week trial, Arthur Andersen is convicted of obstruction of justice for destroying
documents while on notice of a federal investigation.
May 31, 2005
The U.S. Supreme Court overturns the Arthur Andersen conviction. The justices
unanimously agree that the Houston jury was given overly broad instructions by the federal
judge presiding over the case. At issue is a memo from an Arthur Andersen in-house
attorney detailing the company’s document retention policy.
Nov. 23, 2005
The Justice Department announces that it will not pursue the criminal case against Arthur
Andersen in wake of the Supreme Court decision handed down earlier that year.
BALANCING THE BOOKS
On Monday, Oct. 16, 2006, the day after Hawaii’s statewide earthquake, accounting firm Accuity LLP opened for business. Just days before, the firm had served as the Honolulu office of accounting giant PricewaterhouseCoopers (PWC), which had decided earlier that year to pull out of the Hawaii market.
“I got a call from a friend that first day, who said: ‘PWC pulls out and the earth shakes,’” says Kent Tsukamoto, the former PWC managing partner and now Accuity’s managing partner. “You might say that we started off with a bang.”
While the circumstances surrounding Accuity’s transition from international juggernaut to locally owned big business weren’t as catastrophic as Arthur Andersen’s end and KMH’s beginning, Tsukamoto and his partners, Wendell Lee and Dennis Tsuhako, were essentially dealing with the same issue: How do you sustain a business while building another business?
However, a larger, more earth-shaking issue probably extends far beyond Accuity, KMH and the rest of the Islands’ accounting industry: How important is Hawaii to businesses with a global, or national reach? The answer is: maybe not much anymore.
According to Accuity’s tax partner, Wendell Lee, PWC’s decision to leave Hawaii and pursue larger markets on the Mainland was initially shocking, but not surprising in the end. “PWC has more than 15,000 clients in the U.S. Only about 200 of them account for 80 percent of the company’s revenue. On average, that’s about $54 million to $100 million per client, per year,” says Lee. “That leaves the Hawaii market off the scale, because, at the very bottom of the food chain, they were looking for at least $1.5 million in revenue per client. At PWC, our largest Hawaii client provided about $1 million.”
With PWC’s exit and Arthur Andersen’s demise in 2002, Hawaii is home to three of the big-four accounting firms. Tsukamoto believes that number may shrink over the next several years.
“The size of a public accounting firm is a function of the size of the services rendered. Accounting follows the organizations,” says Warren Wee, associate professor of accounting at Hawaii Pacific University. “Just look at the corporations that were based in Hawaii 10 or 20 years ago. It’s not rocket science to see what’s happening, really basic economics.”
“Ten or 15 years ago, you saw a lot of mergers of the large, national firms, going from the big eight to the big five. Now, of course, after Andersen’s implosion, it’s down to four,” adds Wilcox Choy, partner at KMH and former partner at big-four accounting firm Grant Thornton. “Everything’s bigger and bigger businesses need bigger profits.”
In other words, follow the money, and while the big money is on the Mainland, there is still more than enough business to be found in the Islands. Accuity has retained a vast majority of its staff and about 95 percent of its revenue since leaving PWC. Tsukamoto expects about 5 percent growth in 2007.
Local ownership has a plethora of benefits. Now, Accuity is no longer saddled with post-Enron, corporate office-imposed procedures, which had very little relevance to Hawaii’s small-scale businesses. (According to Tsukamoto, about 60 percent of Accuity’s clients are family-owned businesses.) Also gone is the constant pressure from the head office to increase fees by 20 percent to 30 percent, rates more in line with those charged in New York and Los Angeles. In addition, when Tsukamoto needs to make a decision, he just walks down the hall to talk with his partners.
Some of the advantages of local ownership can’t be accounted for on a balance sheet: “PWC offered us [the partners] positions on the Mainland, where we would have done well,” says Lee. “But that wouldn’t have been the right thing to do. We have 80 people who are our family, who in turn have families that they have to take care of. We couldn’t abandon them in the market like that. This is Hawaii. This is what you do. You take care.” — DKC
How to Save Your Business Your People & Yourself ...
May 15, 2004
Ex-schools chief got $1M
The package gave former KSBE
official McCubbin more than
$500,000 in benefits
By Rick Daysog, Star-Bulletin
Former Kamehameha Schools Chief Executive Hamilton McCubbin, who resigned under fire last year, received more than $1 million from the trust last year.
In its annual Form 990 tax filings with the Internal Revenue Service, Kamehameha Schools said it paid McCubbin $493,586 in base salary during its fiscal year ending June 30, 2003.
The $6 billion charitable trust also paid McCubbin $353,253 in severance and other benefits and $181,541 in housing allowances, health insurance and other expenses.
McCubbin's 2003 package rivals the $1 million a year that the estate's former trustees Henry Peters, Richard "Dickie" Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender paid themselves during the late 1990s trust controversy.
McCubbin could not be reached, and the estate declined comment on McCubbin's compensation, saying it was a personnel matter.
McCubbin, a 1959 Kamehameha Schools graduate, became the 120-year-old estate's first chief executive officer in February 2000. He abruptly resigned in May 2003 after the estate's five-member board investigated allegations that McCubbin had an inappropriate relationship with a female staffer.
The resignation came three months after McCubbin had negotiated a new, three-year contract in February 2003. McCubbin earned about $350,000 in the year ending June 30, 2002.
The estate's tax filings did not list the annual salary for the estate's current chief executive, Dee Jay Mailer, who assumed her post in January. But it did include pay figures for the estate's top executives and former officers. They included:
» Former Chief Educational Officer Dudley "Skip" Hare, who was paid $743,214 in fiscal year 2003. Hare stepped down in January 2003, and his compensation package included salary and severance.
» Kirk Belsby, the estate's vice president for endowment, earned $243,027 last year. Belsby assumed his new post in January 2003 and the amounts paid to him during the 2003 fiscal year represent a portion of his annual compensation rate.
» Michael Chun, headmaster of the Kamehameha Schools' Kapalama Heights campus, received $207,074.
» Stan Fortuna, headmaster of the Kamehameha Schools' Hilo campus, received $227,281. Rod Chamberlain, headmaster of the Kamehameha Schools' Maui campus, received $218,614.
Fortuna and Chamberlain earned a base salary of about $166,000 each, but both received about $40,000 in additional allowances that boosted their overall packages.
» Colleen Wong, the estate's vice president for legal affairs who served as the trust's acting chief executive officer after McCubbin's departure, earned $206,060.
» Former trust Chief Operating Officer Eric Yeaman received $201,997 in 2003. Yeaman left the trust in December 2002 to become Hawaiian Electric Industries Inc.'s chief financial officer.
» Darrel Hoke, the trust's internal auditor, was paid $188,501, while Dick Lau, the estate's human resources director, earned $181,401. Mike Loo, the trust's vice president for finance and administration, earned $164,023.
» Trustees Diane Plotts, Robert Kihune and Nainoa Thompson were paid $91,500 last year. Board Chairwoman Constance Lau received $104,000, while former Chairman Douglas Ing received $101,000. Trustees pay is set by the state Probate Court.
Established by the 1884 will of Princess Bernice Pauahi Bishop, the Kamehameha Schools is a nonprofit trust that educates children of native Hawaiian ancestry. It also is the state's largest private landowner with more than 300,000 acres in Hawaii.
For the 2003 fiscal year, the estate said it earned $137.5 million on revenues of $338.6 million. Expenses for the year totaled $201 million.
The estate said its biggest outside vendors were local architecture firm Group 70 International, which was paid more than $5.3 million, and the accounting firm of Karns Murakami & Hanashiro, which received $1.2 million for tax and consulting work.
The Washington, D.C., law firm Miller & Chevalier billed the estate $890,722, and Hogan & Hartson LLP charged $623,767. Both firms worked on tax issues and efforts to defend the Kamehameha School's Hawaiians-preference admission policy.
http://starbulletin.com/2004/05/15/news/story2.html
Ex-Andersen Partner Kept Enron Papers
Associated Press
HOUSTON – A former Arthur Andersen partner who illegally shredded documents related to Enron Corp. testified yesterday that he preserved several potentially embarrassing records.
David Duncan, who pleaded guilty to obstruction of justice charges in April, said he kept records related to allegations of questionable accounting practices brought last August by Enron Vice President Sherron Watkins.
“I believe I retained (documents) relevant to the Watkins allegation matter in a separate folder,” Duncan told attorney Rusty Hardin in a second day of cross-examination at Andersen’s obstruction trial.
Andersen claims neither the firm for Duncan broke any laws and that Duncan took the plea deal under threat of extensive prison time.
In his questioning yesterday Hardin focused on the important documents that survived the shredder in an effort to show the jury there was no conspiracy to cover up auditing work on Enron’s books.
Among the documents Duncan retained was a memo from fellow Andersen partner James Hecker, who took a call from Watkins in August. In the call, Watkins relayed her worries about Enron’s accounting of so-called “Raptor” entities and rumors of side deals that might have jeoparized the veracity of Enron’s financial statements.
The memo, detailing the conversation with Watkins, was titled “Smoking guns you can’t extinguish.” Duncan dismissed the title as nothing more than sarcastic wit.
Also preserved were copies of Watkins’ complaints, which she shared with former Enron Chairman Kenneth Lay. A review by law firm Vinson & Elkins later dismissed many of Watkins’ concerns.
Obstruction carries a maximum sentence of 10 years, but prosecutors can recommend Duncan, 43, be sentenced only to probation.
If Andersen is convicted, it could be fined up to $500,000 and face probation for five years. It also could be fined up to twice any gains or damages the court determines were caused by the firm’s action and would be barred from auditing publicly traded companies – likely putting the firm out of business.
Kamehameha uses Enron firm in audit
By Jim Dooley, Honolulu Advertiser
The beleaguered accounting firm Arthur Andersen, on trial in Houston for obstructing justice in the federal investigation of Enron Corp.'s collapse, was paid $2.1 million last year to help audit Hawai'i's largest nonprofit organization, the $6 billion Kamehameha Schools, according to the organization's tax return, made public yesterday.
Eric Yeaman, chief financial officer of Kamehameha Schools, was an Arthur Andersen employee, working as "internal auditor" of the schools, when the Kamehameha trustees decided to hire him for the CFO post in July 2000.
Arthur Andersen has continued to serve as internal auditor and provides other services to Kamehameha Schools. The company will receive a slightly lower sum this year than the $2.1 million it was paid last year, according to Yeaman and to the tax return.
Yeaman said he has a conflict of interest in dealing with Arthur Andersen and "leaves the room" when there is any discussion at Kamehameha Schools about a business transaction with the accounting firm.
Hamilton McCubbin, chief executive officer of the schools, said the Honolulu office of Arthur Andersen has demonstrated "outstanding integrity" in its dealings with Kamehameha Schools.
The internal auditing contract with Arthur Andersen expires this summer, and the schools plan to hire their own internal auditing staff rather than rely on an outside company for the work, McCubbin said.
But an outside firm will be needed to help in that transition and to provide independent expertise when needed by the internal auditing staff, McCubbin said.
Arthur Andersen will be free to bid for that work, he said.
Once the fourth-largest accounting firm in the world, Arthur Andersen has lost clients steadily in the wake of the Enron scandal. In addition to the criminal trial now going on in Houston, Arthur Andersen has been named in a class action lawsuit filed by Enron shareholders. The firm has been selling offices and assets around the country, and could face bankruptcy in the near future, according to news reports.
The Kamehameha Schools tax return shows net assets of more than $4 billion. A wholly owned subsidiary, Kamehameha Activities Association, filing a separate return for the first time, listed assets of more than $2 billion.
The schools, which educate children of Hawaiian ancestry, spent $139 million of its operating budget on program services, and another $53.9 million in school construction and repair, according to the tax filing.
The construction expenses were mainly incurred building two new campuses, one on the Big Island and the other on Maui.
McCubbin said the schools are now spending about $20,000 per student on the Neighbor Islands, compared with $13,000 per student at the main campus on O'ahu.
The tax return also reveals considerable turnover in top employees at the huge institution.
Four former executives of Kamehameha Schools/Bishop Estate are listed among the highest-paid executive personnel, but the numbers include their severance pay.
They include Nathan Aipa, former chief lawyer for the schools and later acting chief administrative officer. Aipa, now in private practice, was paid $413,620 for the tax year ended June 30, 2001.
Former Kamehameha tax director Gilbert Ishikawa was paid $271,610; Rodney Park, former administrative/planning director, received $260,023; and former appraisal director Kenneth Teshima was paid $214,627.
McCubbin is the highest-paid executive now on payroll at Kamehameha Schools, receiving $321,026 plus $28,585 in expense account allowances.
Chief Investment Officer Wendell Brooks, who also has left the institution, was paid $300,000. Yeaman was paid $224,532. Mike Chun, acting chief education officer, was paid $188,718.
Executive salaries are considerably higher now than they were before years of turmoil culminated with the departure of all five of the institution's trustees two years ago.
Trustees used to be paid about a million dollars each. Last year they were paid between $122,000 and $49,500, depending on whether they served in the job a full year.
Board chairman Robert Kihune received the top salary of $122,000, because he was one of the acting trustees who carried over to full-time status. The same is true of trustee Connie Lau, who was paid $100,500, according to the return...
For much more on the Kamehemameha Schools’ connection, GO TO > > > Aloha, Harken Energy!
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‘Chainsaw Al’ Accused of Fraud . . .
The New York Times
Albert J. Dunlap, the former chief executive officer of Sunbeam Corp., directed an accounting fraud in which he was aided by a partner of Arthur Andersen, the firm that audited Sunbeam’s books, the Securities and Exchange Commission charged yesterday.
Dunlap, best known for ruthless turnaround plans that usually involved slashing jobs, saw his memoirs become a best-seller.
Sunbeam’s stock leaped nearly 50 percent the day he was hired to run the company in 1996. But the SEC suit, filed in U.S. District Court in Miami, said the Sunbeam turnaround directed by Dunlap was a sham.
“This case is the latest in our ongoing fight against fraudulent earnings management practices,” said Richard H. Walker, the commission’s director of enforcement.
Sunbeam, now in bankruptcy reorganization, settled related administrative proceedings filed by the SEC, accepting a cease-and-desist order barring further violations of securities laws. It did not admit or deny the allegations.
But Dunlap, along with four other former top executives of the company, and Phillip E. Harlow, the Andersen partner who was in charge of auditing Sunbeam, said they would fight the charges. . . .
Dunlap, in a statement released by his attorney, called the charges “totally false,” and added, “I am outraged that the SEC has chosen to bring these baseless charges against me.”
Less likely to be outraged are the thousands of Sunbeam employees who were cut from the payrolls by the man known as Chainsaw Al. He became a corporate star in the 1990s, making tens of millions of dollars for himself as he dismissed thousands of employees in the name of efficiency. . . .
Top accountant fined $7m
One of the world's top five accountants has been fined for allegedly fiddling the books of a US firm.
Arthur Andersen failed to stand up to company management and betrayed their allegiance to the investing public.
by Richard Walker, US Watchdog
The US Securities and Exchange Commission alleged that the accountants had filed false and misleading audits of the US firm Waste Management, North America's biggest rubbish-hauler.
Without admitting or denying the allegations, Arthur Andersen has also agreed to an injunction that means it will face stiffer sanctions for future violations.
This is the SEC's first fraud case against a big five accounting firm.
Bad for PR
The firm is hoping that the payout will finally sweep the embarrassing episode under the carpet.
"This settlement allows the firm and its partners to close a very difficult chapter and move on," said the accountants in a statement.
"The allegations underlying the settlement are limited to one client and reflect work that is in some cases more than seven years old," it added.
The four audit partners involved are barred from doing accounting work for public companies between one to five years.
Investor protection
Arthur Andersen was in charge of Waste Management's books from 1992 to 1996 and issued audit reports that are alleged to have overstated revenue by more than $1bn.
Publicly traded companies are required to hire an accounting firm to go through their books using accepted accounting principles.
This ensures that potential investors are not misled by false accounts when considering whether to buy stocks and shares.
The SEC said that Arthur Andersen and its partners had betrayed their allegiance to shareholders and the general public.
"We will not shy away from pursuing accounting firms when they fail to live up to their responsibilities to ensure the integrity of the financial reporting process," warned Richard Walker, head of the SEC.
For more, GO TO > > > Nests Along Wall Street
Andersen Could Face SEC Sanction,
Suits Over Enron Accounting Error
Bloomberg News
HOUSTON -- Arthur Andersen may face U.S. Securities and Exchange Commission sanction and shareholder lawsuits because it certified Enron Corp. financial reports that the company disavowed last week as inaccurate, legal and accounting experts said.
Andersen, the world's fifth-largest accounting firm, served as Enron's outside auditor for more than a decade. Last week, the company reported that it overstated earnings by $586 million over 41/2 years, inflated shareholder equity by $1.2 billion because of an "accounting error," and failed to consolidate results of three affiliated partnerships into its balance sheet.
Enron restated its financial reports as the company suffered a cash crisis triggered by disclosure of the cut in shareholder equity and the start of an SEC investigation.
"I'd be very surprised if the SEC didn't go after Arthur Andersen," said Alan Bromberg, securities law professor at Southern Methodist University.
Andersen partner David Tabolt has said the firm is cooperating with a special committee of Enron's board of directors appointed to investigate the accounting problems.
Lynn Turner, who was the SEC's chief accountant for three years until he resigned in August, said Enron and Andersen ignored a basic accounting rule when they overstated shareholder equity.
Explaining the equity reduction last week, Enron said it had given common stock to companies created by Enron's former chief financial officer in exchange for notes receivable, and then improperly increased shareholder equity on its balance sheet by the value of the notes.
"What we teach in college is that you don't record equity until you get cash for it, and a note is not cash," said Turner, who is now director of the Center for Quality Financial Reporting at Colorado State University.
"It's a mystery how both the company would violate, and the auditors would miss, such a basic accounting rule, when the number is $1 billion."
Anderson, trying to curb damage,
vows to changes practices, policies
Some suggest company’s future may be in doubt
By Dave Carpenter, Associated Press
CHICAGO – Arthur Andersen LLP accelerated damage-control efforts yesterday, running full-page ads in national newspapers to try to limit blame in the Enron debacle to its Houston office and promising an overhaul of its practices.
But as Andersen’s lead auditor in the case met with congressional investigators in Washington questions remained about whether involvement in the document-shredding scandal extended to executives at Andersen’s Chicago headquarters.
A series of disclosures involving Andersen’s role in Enron’s demise has hurt the accounting giant’s stellar reputation, raising speculation it may not survive the controversy as an independent company.
Experts say the company’s short-term future may depend on what investigators discover in probing what top managers knew and when they knew it.
In the advertisement published yesterday, Andersen CEO Joseph Berardino touted actions taken by the company on Tuesday: Andersen’s lead partner on the Enron account, David Duncan, was fired; three partners who worked on the assignment were put on leave; new leadership was put in charge of the Houston office; and four partners were stripped of management responsibilities.
“In the near future, Andersen will announce comprehensive changes in our practices and policies that we believe will reaffirm confidence in the independence and quality of our work,” the ad read. . . .
The efforts at damage control appeared designed to isolate the problems to the Houston office, which handled the audit of the collapsed energy-trading company.
But Berardino left open the possibility that executives at headquarters might be implicated, saying Tuesday that “we’re not quite sure yet” whether wrongdoing reached higher into the accounting firm than the auditors now being disciplined. . . .
Particularly at issue are special partnerships formed by Enron that enable it to add several hundred million dollars from off-the-books transactions to publicly stated earnings, and at the same time hide big debts. . . .
In other action, an energy company sued Andersen, accusing it of fraud and negligence in Enron’s collapse.
Attorneys for Samson Investment Co. in Tulsa, Okla., filed the civil suit Tuesday, saying Samson and other companies “justifiably relied on the financial audits” for their natural gas purchase contracts with Enron but those audits were “grossly misleading.”
The lawsuit requests class-action status on behalf of more than 100 unnamed companies and seeks unspecified damages.
Andersen is already named in more than 30 lawsuits filed on behalf of Enron shareholders who saw their holdings plummet in value after the company’s stock plunged to below $1 in December. . . .
Failed Enron Energy Company Dismisses Its Accounting Firm
Lawyer cites auditor’s order to shred papers
By H. Josef Hebert, Associated Press
WASHINGTON – Enron Corp. fired accounting firm Arthur Andersen yesterday amid growing evidence that its auditors had serious questions about Enron’s financial practices but did nothing to correct them.
“We’re very troubled about the destruction of the documents, and we’re very concerned about the accounting advice we got,” said Washington attorney Robert Bennett, who is representing Enron.
Bennett said Enron informed Andersen of the dismissal yesterday afternoon. Joseph Berardino, Andersen chief executive officer, acknowledged Enron’s decision....
The firing came as congressional investigators pressed the accounting firm for more documents concerning Enron’s business activities. . . .
SEC Chairman Harvey Pitt did say that the commission will reserve its harshest punishment “for anyone who lies or obstructs (an SEC) inquiry.”...
For more on Harvey Pitt, GO TO > > > Spotting the SEC
* * *
Andersen has history of paying settlements for audit problems
By John Kelly, Associated Press
CHICAGO – Accounting firm Arthur Andersen has settled at least a dozen cases over the last 20 years to end investigations into allegations its auditors missed, ignored or hid clients’ financial problems from unwitting investors.
In two of the most recent and serious cases, the Securities and Exchange Commission alleged Andersen inflated earnings on behalf of trash hauler Waste Management Inc. and appliances maker Sunbeam Corp.
Last June, Anderson agreed to pay a $7 million fine to settle allegations that it issued false and misleading audit reports for Waste Management from 1993 to 1996. The reports inflated the company’s profits by more than $1 billion.
In many of the earlier cases, state officials and shareholders’ lawyers made accusations that parallel the alleged irregularities at the hart of Enron Corp.’s collapse.
“In all but the magnitude of dollars, there are striking similarities between Enron and what happened here – the compromising relationships with auditors, destruction of documents and so on,” said Connecticut attorney General Richard Blumenthal, who investigated Andersen’s role in the collapse of Colonial Realty Co. in the early 1990s.
Securities lawyers, seasoned accountants and other experts said that Andersen’s past blemishes may be no worse that other large accounting houses. But they say Andersen’s role in Enron’s fall and its past problems highlight long-simmering concerns about potential conflicts of interest when companies have too close a relationship with auditing firms that investors rely on for objective reviews.
For instance:
>> Andersen paid $90 million to investors and $2.5 million to Connecticut to settle claims the company knowingly signed off on overly rosy forecasts for Colonial Realty’s real estate ventures in Hartford. At the same time, state officials said, Andersen auditors took cash, trips and other gifts from Colonial executives. Investors lost more than $300 million on Colonial.
>> Andersen paid Ohio $5.5 million to cover taxpayers’ losses on insured deposits at the failed Home State Savings Bank rather than challenge the government’s claim that Andersen was negligent in reviewing the thrift’s books.
>> Andersen agreed to at least $24 million in settlements over allegations it misrepresented the financial health of Arizona-based American Continental Corp. and its subsidiaries, which included Charles Keating’s failed Lincoln Savings & Loan.
>> In case after case, Andersen’s representatives said the settlements were not an admission of fault, but rather an economic decision to avoid years of costly legal battles.
* * *
January 27, 2002
Team Revives Claims Against Firm
Associated Press
OAKLAND, Calif – Oakland Raiders lawyers have revived claims that accounting firm Arthur Andersen LLC destroyed evidence that could prove it lied in 1995 when it assured the team of sellouts at the Oakland Coliseum.
Revelations that Andersen destroyed documents of bankrupt client Enron Corp., and congressional investigations into the company, have “refocused us on this issue,” Raiders attorney Ken Hausman told the Contra Costa Times.
The coliseum management hired Andersen in 1995 to track applications for 10-year personal seat licenses at Raider games. The project was the centerpiece of the San Francisco Bay area’s attempts to bring the Raiders back to Oakland from Los Angeles.
The football team sued in 1998 for $1.1 billion, claiming Raiders boss Al Davis was assured of stadium sellouts by Andersen representatives and by coliseum and city officials.
Raiders management claims that perennially poor attendance at home games has crippled the team financially. Last year, only 24,000 of a total 55,00 personal seat licenses were sold. Less than half of the 143 lucrative luxury suites were taken.
The lawsuit insists Davis never would have returned the team had he known the stadium had not sold out, and that Andersen helped coliseum officials conceal information.
The particular claim was thrown out of court for technical reasons but could be revived if the rest of the case goes to trail later this year. . . .
Andersen denies the allegations. . . .
* * *
January 28, 2002
Enron’s Auditor Is Feeling Heat
Over Corporate Collapse in Australia
By Andrew Backover, USA Today
With Arthur Andersen under intense scrutiny in the United States for its role in Enron’s failure, the accounting firm also is feeling th heat Down Under. Australian officials are investigating what responsibility Andersen may bear in the collapse of client HIH Insurance.
The HIH and Enron cases mean Andersen is auditor in the biggest corporate meltdowns in U.S. and Australian history.
HIH imploded in March, filing for bankruptcy protection because of about $2.75 billion in liabilities.
Only months earlier, Andersen blessed HIH’s books for the fiscal year ended June 30, 2000, when HIH said it had nearly $500 million in net assets. A royal commission resumes hearings tomorrow, that aim to find out why HIH failed and then recommend policy changes to ensure it doesn’t happen again. . . .
The investigation coincides with an 11-month probe by the Australian Securities and Investments Commission that could result in criminal charges, civil suits and fines for those involved. . . .
While the HIH probe goes beyond Andersen, the firm is on the hot seat on several fronts, some resembling the Enron situation:
>> Close ties. At least two top finance executives at Enron previously worked at Andersen. At HIH, three board members were former Andersen partners, and two had been on the audit committee. That raises questions about auditor independence, investigators say....
>> Creative accounting. Whereas Enron hid liabilities to boost its balance sheet, HIH attempted to pad profits as major parts of its business eroded, investigators say. HIH didn’t set aside enough reserves to cover future insurance claims and overvalued some assets. One subsequent report commissioned by regulators found HIH had about $550 million in liabilities instead of nearly $500 million in assets as reported.
>> Early signs. As with Enron, HIH’s collapse took many by surprise. But there were warning signs in both cases. An audit report commissioned by and HIH creditor in November 2000 – five months before the collapse – raised several red flags that went unheeded.
* * *
Administration Ties to Arthur Andersen Nearly as Tight as Those to Enron
By John Dunbar and Nathaniel Heller, The Public i
(WASHINGTON, Jan. 16) -- Arthur Andersen LLP, the accounting firm that has been implicated in the collapse of Enron Corp., was a top contributor to President George W. Bush's political campaigns. (See the tables below)
Since 1998, Andersen and its employees have contributed $212,825 to Bush, including $25,000 in donations to Bush's inaugural celebration when he was governor of the state of Texas. The total makes Andersen one of Bush's biggest financial backers.
Overall, since 1998, Andersen has spent $8.1 million to influence the federal government, including $6 million on lobbying expenditures.
Like its client Enron, Andersen had strong ties to the Bush campaign and administration. Two former lobbyists for the firm now occupy high-level positions in the administration.
Stephen Goddard Jr., a managing partner in charge of Andersen's Houston office who was relieved of management responsibilities on January 15, 2001, was a Bush "pioneer," meaning he raised at least $100,000 for Bush's presidential campaign.
Andersen's political action committees also gave generously to members of Congress. They contributed $27,000 to Rep. Billy Tauzin (R-La.) over the last three years. Tauzin, the chairman of the House Energy and Commerce Committee, is currently leading one of the congressional investigations of Enron and Andersen. Over the last three years, he's been the top congressional recipient of Andersen political action committee contributions, according to the Center for Responsive Politics.
Andersen is in the midst of growing investigations into the collapse of energy giant Enron Corp., which filed for bankruptcy in December following a company disclosure that it had hidden massive amounts of debt off its balance sheet. Andersen was the company's independent auditor, and assured investors that, in their opinion, the company's financial statements presented "fairly, in all material respects, the financial position of Enron Corp."
Andersen has admitted to destroying a "significant but undetermined number" of documents relating to the Enron audit. The firm announced it fired the partner in charge of Enron's audits, David B. Duncan, who rushed subordinates to shred records of Enron's audits that had been requested, but not yet subpoenaed, by government investigators.
Like Enron, Andersen is a defendant in shareholder lawsuits that allege the firm did not properly disclose Enron's financial position to investors.
Andersen, a huge accounting and consulting business with 85,000 employees in 84 countries, has been a prodigious spender on other political activities.
In researching "The Buying of the President 2000," the Center determined Andersen was Bush's 13th largest career patron through June 30, 1999. By comparison, former Vice President Al Gore received $8,200 from Andersen employees when he ran for president, according to documents from the Federal Election Commission.
Capitol Hill connections
The company's political action committee has spent $1.3 million on House and Senate members since 1998, with Democrats receiving slightly less than half as much as Republicans. Among the recipients was current Attorney General John Ashcroft, who accepted $10,000 for his unsuccessful Senate reelection campaign, according to CRP.
Ashcroft recused himself from the criminal investigation of Enron after the Center reported one of his campaign committees received a $25,000 contribution from the company.
Tauzin has been critical of Andersen. "Anyone who destroyed records simply out of stupidity should be fired; anyone who destroyed records intentionally to subvert our investigation should be prosecuted," he is quoted in a committee press statement. "One way or another, our committee will get to the bottom of this debacle."
Andersen also spent a little over $500,000 in unregulated, soft money contributions to political parties, the vast majority going to the GOP.
Outstripping those numbers by far, however, is the amount Andersen spends on lobbying. Since 1998, the company has spent $6 million in-house on lobbying Congress, according to lobby disclosure records. They also retained outside firms to lobby for them.
Among the issues the company pushed was legislation to consider the retail deregulation of the electric utility industry, a key issue for Enron and its chairman, Kenneth Lay.
Andersen's stable of lobbyists includes names from Washington's power elite.
Former Andersen lobbyists Nicholas Calio and Kirsten Ardleigh Chadwick, who worked for the firm O'Brien Calio, now head up President Bush's legislative affairs office at the White House.
The two are the White House's top lobbyists to Congress and are charged with pushing the administration's legislative agenda on Capitol Hill.
According to federal lobbying records, Andersen paid O'Brien Calio $60,000 to lobby on Internal Revenue Service reform legislation in the first half of 1998. Calio and Arleigh Chadwick worked on that effort, according to the lobbying disclosure form. They moved to the White House shortly after President Bush's inauguration.
Interests beyond accounting
Andersen began lobbying on the issue of electricity deregulation as early as 1996, and continued into 1998. Enron had been trying to get Congress to create a wholly competitive environment in the electric utility industry for years. One state that deregulated, California, still has utilities that owe millions of dollars to Enron. Similar efforts to pass legislation to deregulate electric utilities at the federal level have failed.
Andersen has also spent large amounts of money to influence the Securities and Exchange Commission to allow large accounting and consulting firms to perform both services for their corporate clients.
Among the sharpest criticisms of Andersen's role in Enron's collapse is the fact that Andersen provides both auditing and consulting services, considered by many experts to be a conflict of interest.
Last year, SEC Chairman Arthur Levitt, Jr. proposed a rule that would have restricted the amount of non-audit-related consulting work that companies like Arthur Andersen and other Big Five accounting firms could do for their audit clients. Andersen opposed the rule, and hired the powerful lobby shop of Clark & Weinstock to argue its case.
Among the Clark & Weinstock lobbyists working Capitol Hill on behalf of Andersen were former congressman Vic Fazio (D-Calif.); Jim Matthews, former chief of staff to Rep. Thomas Manton (D-N.Y.); and Anne Urban, formerly Sen. Robert Kerrey's (D-Neb.) legislative director.
Under pressure from the Big Five, the Commission ultimately adopted a weak version of the rule that favored the accounting industry and left their consulting services virtually untouched. The rule required only the disclosure of how much money the accounting firm earned for consulting services from each company it audited. No limits were placed on the amount of money an audit firm could earn.
'The most incredible fight'
Levitt called the brawl with the accounting industry "the most incredible fight I have ever been involved in." At the time, Jeffrey Peck, a managing director for Andersen, said the rule would cut his firm's market potential by 40 percent.
Given the stakes, allies of the accounting firms mounted a vigorous campaign against any limitation on their market potential. Among those arguing against the proposed rule was Harvey L. Pitt, then an attorney with the firm of Fried, Frank, Harris, Shriver & Jacobson. Bush appointed Pitt chairman of the SEC; the Senate confirmed him in August 2001.
Pitt represented Andersen, as well as the four other Big Five firms, as a private lawyer before returning to government service in 2001. As chairman of Fried, Frank's Washington, D.C., office, Pitt worked on behalf of the Big Five "on a wide range of regulatory issues relating to their scope of services and firm structures," according to a company biography.
Despite his ties to Andersen, Pitt has said he will not recuse himself from the SEC's Enron investigation.
"It is not the function of the chairman of the SEC, or any commissioner, to manage an investigation," Pitt explained in a written statement.
Pitt opposed limits on the amount of consulting work the Big Five could do for their audit clients before Levitt proposed the SEC rule. In a 1998 article, Pitt and colleague David Birenbaum wrote that "there is no empirical basis for the proposition that the provision of non-audit services for audit clients leads to audit failure," according to a Washington Post story published last summer.
According to reports, Enron paid Arthur Andersen $52 million in 2000. Twenty-seven million came from consulting services, $25 million from auditing services. In a congressional hearing in December, Bernardino said the consulting fees not related to audit functions were only $13 million of the $52 million total.
Andersen's audits have been questioned before. The firm was the accountant for Sunbeam, which grossly overstated its profits, and Andersen agreed to pay $110 million to settle shareholder suits without admitting or denying blame.
Waste Management, another client of Andersen, overstated income by $1 billion. Andersen agreed to pay part of a $220 million class-action settlement and a $7 million civil penalty, without admitting liability, according to a New York Times story.
In August 2000, Andersen Consulting, a division of Andersen Worldwide, formally split from Arthur Andersen, the more traditional auditing and accounting component of the firm.
After arbitration, Andersen Consulting changed its name to Accenture, a change it made in January 2001 .
Accenture became a publicly traded company four months later. . . .
Copyright 2002, The Center for Public Integrity. All rights reserved.
March 27, 2002
Andersen leader steps down under partners’ pressure
CHICAGO - Arthur Andersen chief executive Joseph Berardino resigned yesterday, bowing to mounting pressure as a result of the accounting firm’s role in the Enron scandal.
His announcement came four days after former Federal Reserve chairman Paul Volcker urged top management to step aside so he can install and head an independent board in a last-ditch plan to save the company. . . .
The key element of Volcker’s plan is the dismissal of a federal indictment against Andersen alleging obstruction of justice for destroying Enron-related documents. The Justice Department has not said whether it would consider such a move.
Andersen has lost more than 70 clients this year and overseas affiliates have been bolting to rival firms. . . .
The firm suffered another blow yesterday as the Securities and Exchange Commission said in a court filing that Andersen was involved in a scheme that allowed former executives of Waste Management Inc. to inflate earnings by $1.7 billion.
Last year, Andersen paid a $7 million fine to settle an SEC suit accusing it of issuing false and misleading audit reports that inflated Waste Management’s earnings from 1993 to 1996....
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Originally posted: August 23, 2008
Latest update: November 1, 2009