Former Andersen Partner Speaks Out

Barry Melancon’s Letter From the President ( JofA , Jul.05, page 8) is self-serving and misleading. One might wonder why a retired Andersen partner and former chairman of the AICPA Tax Section (that would be me) would be critical of that letter or express anything but appreciation for the AICPA’s assistance in the recent Supreme Court case, which overturned Andersen’s criminal conviction.

Andersen committed no crime, and in fact followed professional standards, in removing extraneous papers from the files.

The letter points out that

The Supreme Court vindication of Andersen is “a bittersweet victory” for all 28,000 ex-Andersen employees (and, I’d add, partners);

The AICPA filed an amicus curiae brief supporting Andersen’s successful position; and

None of us can ever know how Andersen would have fared “without the criminal verdict.”

So, what is my problem with the AICPA and with Mr. Melancon’s letter? The AICPA’s actions were too little and much too late. The indictment of the firm, not the conviction, brought Andersen down. I cannot recall, and have been unable to find, evidence of expressed AICPA support for AA and opposition to the indictment at a time when they might have had some actual impact. I understand the AICPA did many things behind the scenes, but I would have preferred more public support at the time.

Mr. Melancon’s letter seems to be an attempt to take credit on behalf of the AICPA for its recent actions that may have helped Andersen achieve its 9-0 Pyrrhic victory. The reason for filing the amicus brief was that “other CPAs might be subject to the statute that laid the foundation for the government’s case.” But how will that help other CPAs whose firms might be destroyed by a mere decision to indict the firm?

Press reports indicate that KPMG escaped immediate indictment largely based on the lessons learned in Andersen. If the Supreme Court decision helps present and future firms, that is commendable, but the AICPA’s failure to speak out when it might have really made a difference to Andersen and its personnel is deplorable.

Leonard Podolin, CPA
Haverford, Pa.