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Andersen admits losing clients over Enron affair

Andersen on Monday admitted for the first time that the Enron scandal had cost it clients.

The Big Five professional services firm has come under intense fire for its role as auditor of the collapsed energy trader. It has been on a public relations offensive to boost its integrity and stop clients leaving following revelations that its staff shredded and deleted thousands of Enron documents.

Joseph Berardino, Andersen’s chief executive, said in Chicago on Monday: "People who know us well continue to hire us and stand by us. People who don't know us as well are less anxious, frankly, to hire us. Yes, we've lost business."

He added that Andersen was confident it could survive. However rival firms have received inquiries from Andersen clients about switching auditors. The firm also faces huge legal fees and potentially larger settlements if Enron shareholders and employees prevail in any of the numerous lawsuits that have been filed.

Many clients will be putting Andersen’s reappointment as auditor to a shareholder vote at annual meetings in the next two or three months.

Mr Berardino spoke on behalf of those in the firm not involved in Enron. "The 85,000 people of Andersen are appalled by what happened. They are disappointed and angry. And they want you to know that this is not their Andersen. We will deal with those involved in this."

Separately, the Bush administration continued to head for a legal battle over documents detailing the formulation of its energy policy, which Democrats charge was unduly influenced by Enron.

In his first remarks on attempts by the General Accounting Office to obtain records of the White House energy task force, President George W. Bush said the request was "an encroachment on the executive branch’s ability to conduct business".

The GAO, the influential auditing arm of Congress, has said it will decide by the end of the week whether to file suit against vice-president Dick Cheney, who headed the task force, to gain access to the records. Mr Cheney and his staff met six times with Enron representatives last year.

"In order for me to be able to get good, sound opinions, those who offer me opinions, or offer the vice president opinions, must know that every word they say is not going to be put into the public record," Mr Bush said.