The new allegations, contained in an amended Complaint filed in the Kemper v. Enron Corp. case, Civ. No. H-01-4089 (S.D. Tex.), accuse Andersen of knowingly participating in Enron's fiduciary breaches toward employees by actively helping Enron conceal its true financial condition of the Company and the imprudence of investing in Enron stock.

The Complaint details how Andersen falsely represented that Enron's financial statements conformed to generally accepted accounting practices; falsely represented that its audits of Enron's financial statements had been performed in accordance with generally accepted auditing standards; and knowingly issued and consented to the issuance of numerous false financial reports, all of which were necessary to Enron's scheme to present itself in a false light to investors and employees.

Eli Gottesdiener, lead counsel for the plaintiffs, explained the move, saying, "As Enron collapses, we are obviously going to have to look elsewhere to get some justice for Enron employees." 

"It's obvious that Andersen helped Enron cook the books. Andersen's Houston office was pulling in $1 million a week from Enron -- their objectivity went out the window," he added.

In 2000, Gottesdiener said, Enron paid Andersen $25 million in fees related to the audit of Enron's financial statements, and another $27 million for non-audit  related work. On Sunday, December 2, the former Chief Accountant with the SEC, Lynn Turner, called for a criminal probe of Andersen's role in the affair, and the SEC has already served Andersen with subpoenas. Reps. Billy Tauzin (R. La.) and John Dingell (D-Mich.) of the House Commerce Committee have both stated their intention to hold hearings on Andersen's handling of Enron's books.

Andersen was also recently in the middle of two other scandals involving Sunbeam and Waste Management, Inc. In May 2001, Andersen agreed to pay Sunbeam shareholders $110 to settle a securities fraud lawsuit. In July 2001, Andersen paid the SEC a record $7 million to settle a civil fraud complaint, which alleged that senior partners had failed to act on knowledge of improper bookkeeping at Waste Management, Inc. These "accounting irregularities" led to a $1.4 billion restatement of profits, the largest in U.S. corporate history. Andersen also agreed to pay Waste Management shareholders $20 million to settle its securities fraud claims against the firm.