The Washington Post writes, "Two years ago Arthur Levitt, the chairman of the Securities and Exchange Commission, fought to curb the auditing conflicts of interest that facilitate fictitious financial statements. He was beaten back by legislators who had received money from the audit companies. Then, after Enron's implosion, many of those same legislators put on new reformist clothes, explaining that they had never really opposed the Levitt reforms but had merely pleaded against rushing them. We look forward to this coming week's vote in the Senate banking committee, when some of these claims will be tested... Auditors are supposed to be independent of company managers, but they can't be when they depend on managers for more than half their income. Messrs [Wayne] Allard [R-CO], [Richard] Shelby [R-AL] and [Jim] Bunning [R-KY] seemed to understand this in February and March." But odds are they will pimp for the Big 5 on the key vote this week in the Senate Banking Committee.

In the wake of the collapse of Enron and Arthur Andersen, House Democrats tried to pass tougher regulation of accountants, but their efforts were defeated 219-202. Instead, House Republicans pushed through a bill that "was largely supported by the accounting profession but assailed by consumer groups." Rep. John D. Dingell (D-Mich.) described it as "a sad, sorry and repugnant joke" and "a gift to the accounting industry." "Critics of the auditing industry said they would press their case once [Democratic Senator Paul] Sarbanes introduces his version of accounting reform. 'Now the whole ballgame's in the Senate,' said Frank Torres, legislative counsel for Consumers Union."

NY Times columnist Floyd Norris wrote Arthur Andersen's obituary, reflecting the obvious fact that Andersen is dead - the victim of three major scandals, culminating in David Duncan's Enron shredding spree. "Arthur Andersen's decision to seek a merger partner... signals that it knows it is no longer viable as an independent company. With an indictment on the horizon and, perhaps as important, its having become a butt of jokes on late-night television, Andersen discovered it could not keep clients... After it became clear that the Enron scandal was serious, Andersen tried to change. It retained Paul A. Volcker, the former Federal Reserve chairman, and gave him carte blanche to change both the way the firm operated and the people who were running it. But with the scandal growing and clients fleeing, Andersen could not remain viable long enough for Mr. Volcker to present his reforms." Will corporate America crack down on criminal activity by its executives? Don't bet your 401(k) on it!

"Snowmobile riders discovered the body of James Daniel Watkins, 59, in a snow-packed parking area off Rampart Ridge Road in Douglas County on Dec. 1... Watkins died of a single gunshot to the right temple. A .380-caliber semiautomatic handgun was found lying near Watkins' right hand, according to the report. Investigators also found a note. Watkins had been missing since the afternoon of Nov. 13, when he left work at the downtown Denver accounting firm of Arthur Andersen." Officials initially said the death was suspicious, but Wes Riber, Douglas County's chief deputy coroner, declared the death a suicide. Once again, the corporate media did not ask any serious questions...

According to the Hill, "Thirteen senators pressured Arthur Levitt, then-chairman of the Securities and Exchange Commission (SEC), to abandon a proposed rule that would have barred accounting firms from doing both auditing and consulting work for the same client... Letters opposing the proposal were sent to Levitt by Sens. Charles Schumer (D-N.Y.), Robert Bennett (R-Utah), Evan Bayh (D-Ind.), Gramm, Richard Shelby (R-Ala.), Robert Torricelli (D-N.J.), former Sen. Rod Grams (R-Minn.), Wayne Allard (R-Colo.), Jim Bunning (R-Ky.), Chuck Hagel (R-Neb.) and Rick Santorum (R-Pa.)... Sens. Ron Wyden (D-Ore.) and Mike Enzi (R-Wyo.)... voiced their opposition to the former chairman’s actions... Sources formerly with the SEC say Schumer, Bennett, Shelby, Gramm and Enzi led the opposition to Levitt’s proposal - opposition that eventually resorted to threats of funding freezes." How many of these sinners will repent and convert to the cause of honest accounting?

According to the NY Times, "the growing stack of lawsuits against Arthur Andersen, which audited Enron's financial statements, raises the question of just how much could the firm really afford to pay out." The answer is in the low billions, including some insurance money tucked away in offshore (naturally!) accounts. Andersen CEO Joe Berardino is racing from meeting to meeting to keep Andersen's ship from sinking, but after three strikes (Sunbeam, Waste Management, and Enron), Andersen is out. At the end of the day, an accountant's only asset is his or her credibility - and Andersen now has none. With clients and employees bailing out as fast as they can, Andersen will be lucky to last until the end of 2002.

Senators Chris Dodd (D-CT) and Jon Corzine (D-NJ), along with Rep. Ed Markey (D-MA), will introduce legislation to clean up the conflict-ridden accounting profession. But Markey warned it will be an extremely uphill battle, due to the massive political contributions by the Big 5 accounting firms. According to the NY Times, "the accounting firms have contributed more than $53 million since 1990 to Congressional and presidential candidates. More than $14 million of those contributions came in 2000... All of the Big Five accounting firms appeared on the list of 20 largest donors to President Bush's campaign in 2000." The Big 5's staunchest defenders include "Representative Billy Tauzin, the Louisiana Republican overseeing tomorrow's hearing in the House, and Representative Michael G. Oxley, the Ohio Republican who heads the Financial Services committee." Even Joe Lieberman has championed their cause in the past. Democrats have a number of anti-corruption champions, but it will take a massive outcry from ordinary investors and taxpayers to put an end to corruption by the Big 5.