December 3, 2001

Enron woes interest BFA investors
___By Bob Allen
___Associated Baptist Press
___NEW YORK (ABP)--The bankrupt Baptist Foundation of Arizona isn't the only audit client for which accounting giant Arthur Andersen is drawing scrutiny.
___A Nov. 24 New York Times article raised the question of whether the firm has become the accounting industry's black sheep rather than its conscience. The issue was raised after Enron, a Houston-based energy and commodities company, revealed it had overstated profits by $600 million because of "an accounting error" overlooked in Andersen-certified audits.
___That followed two civil fraud complaints filed against Andersen by the Securities and Exchange Commission.
___One involved audits of appliance-maker Sunbeam. In May, Andersen agreed in a settlement to pay $110 million to more than 10,000 Sunbeam stockholders but denied any wrongdoing. The other involved Waste Management, North America's largest trash hauler, which recently agreed to a $457 million settlement of a class-action lawsuit over misleading investors about the company's financial health.
___The news is of more than passing interest to 13,000 investors who lost money in the now-defunct Baptist Foundation of Arizona. The state of Arizona has sued Andersen for $600 million on behalf of foundation investors. The suit claims Andersen ignored red flags and issued clean audits, making it possible for foundation officers to defraud investors.
___Eight former Foundation officials were indicted in May on criminal charges. Three of them pleaded guilty to lesser crimes in exchange for turning state's evidence against the others.
___Arthur Andersen is named in charges of racketeering in the foundation collapse. Should that charge stick, under Arizona law investors would be entitled to recover three times the amount of their original investment.

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