Andersen Workers Reeling

Saying they have been betrayed by the federal government, Andersen employees in Los Angeles on Monday vowed that their 88-year-old accounting firm would battle a criminal indictment until “the bitter end.”

Employees said the indictment of the firm on charges of obstruction of justice for its destruction of Enron Corp.-related documents represented an unjust and oversized punishment for the actions of a handful of individuals. Most fear the loss of their jobs, retirement investments and personal reputations.

At Andersen’s Los Angeles office, employees had posted photos of company founder Arthur Andersen and his successor, Leonard Spacek, on a wall near a bank of elevators. Workers had scribbled dozens of quotations underneath, including one from formerly imprisoned South African leader Nelson Mandela.

Outside, scores of workers also marched through downtown L.A. at midday, with a few carrying signs claiming the indictment was unfounded. Already stunned and fearful over the swift fall of their employer, Andersen workers lately have begun injecting their public comments with rage.

“What concerns me is that our government, which I’ve always had faith in, would indict an entire firm and hurt 88,000 people because of a few, with really no facts to back it up,” said Laurie Carlson, a 56-year-old administrative assistant who has been with the company for more than seven years. “It’s not justice at all.”

Carlson was one of 10 Los Angeles area employees assembled by Andersen to be interviewed together by a Times reporter Monday.

To the workers, the indictment represents a shocking turn for a firm that has cultivated an image as a by-the-book accounting company with Midwestern values. Indeed, many said they applauded management when Andersen disclosed that it had shredded documents.

“When that first broke, and the firm said, ‘We’re standing up for what we did wrong, we did things wrong, we need to take responsibility for it,’ I said, ‘That’s the firm that I work for.’ We’re not hiding. Now all of a sudden we’re put out as a scapegoat, and that’s ridiculous,” said Nathan Matthews, 30, a single father of two who works as an audit manager in the firm’s Woodland Hills office.

But many of the employees said they had expected the company to receive only a modest punishment, such as a settlement of civil charges with regulators. The SEC reached such a settlement with Andersen last year, fining the company $7 million and censuring it for its handling of the financial statements of trash hauler Waste Management Inc.

Such settlements are fairly routine in the accounting industry. Criminal charges are more unusual--and far more devastating, because a conviction is more likely to result in the company being barred from auditing public companies.

Employees in the Los Angeles office said they were led to believe Andersen was moving closer to a settlement until last week, when news reports indicated an indictment was imminent.

“Up until that point, all of our communications were along the lines of, ‘We’re working through this,’” said Barbara Cabello, 37, an auditor whose husband is a partner in the firm. “I don’t think the partners ever saw this coming.”

Cabello and other employees said they planned to remain at the firm even while acknowledging that some colleagues have been seeking to jump to rival accounting giants. The workers said they did not begrudge those who tried to depart--Andersen is expected to lay off thousands of employees worldwide beginning as early as this week.

“Everyone has their own needs to look out for,” said Paul Sachs, 48, a partner who has been with Andersen for more than 25 years. “You’ve got a young father over here, who certainly has to be concerned about his future. I’ve got kids ready to go to college. Everyone’s needs are different.

“But think of the message this holds for corporate America. If you come forward with issues or problems, look at the consequences you create for your organization.”