U.S. District Judge Melinda Harmon scheduled the trial for May 6 - less than two months after Andersen was indicted - in response to the urgent pleading of Andersen lawyer Rusty Hardin.

"We have a strong need and desire for a speedy trial," said Hardin, explaining that the company is losing clients and wants to clear its name as soon as possible. "This is a company whose very existence is in jeopardy. . . . It is so critical that this company be able to air these charges."

Special prosecutor Samuel Buell replied that the government also favored a speedy trial but needed more time to prepare.

But Hardin noted that the government chose to indict Andersen on March 7, ending settlement negotiations. "You ought to be willing to belly up to the bar," he added.

Buell argued Andersen's own conduct, not the government's, put the firm in jeopardy. "To blame the government here for the problems that face Arthur Andersen is totally unreasonable," he said.

Before the hearing, about 500 Andersen employees gathered in front of the courthouse to express support for the company and opposition to the prosecution.

Andersen was indicted March 7 by a federal grand jury in Houston under provisions of the witness-tampering law. The grand jury charged that Andersen intentionally destroyed records of its work as auditor of Enron financial statements after a federal investigation of Enron had begun.

Andersen disclosed the shredding to federal officials in early January and ordered it stopped, but lawyers for employees and other investors who lost money in Enron's collapse have accused the firm of deliberate misconduct.

The charge - one count of obstructing justice - is a felony. If convicted, Andersen could be fined $500,000 and put on five years probation.

The indictment interrupted settlement talks between Andersen and the Justice Department, the U.S. Securities and Exchange Commission, and lawyers for people who lost jobs and money in the Enron collapse, reports have indicated.

Andersen was offering several hundred million dollars in partial settlement of claims, and the SEC was interested in getting Andersen to be a leader in reforming the accounting industry. But the indictment torpedoed those settlement efforts, reports have said.

The accounting firm requested a speedy investigation to clear its name, and the government complied, Buell said. "Unfortunately for Arthur Andersen, it didn't reach the result they were hoping for," he said.

Andersen's lawyers also complained that prosecutors were continuing the grand jury investigation after the indictment, which Hardin said is extremely unfair. He asked the judge to consider ordering the government to stop further questioning of Andersen employees, pending trial.

The prosecution said that such an order would be inappropriate, and the judge postponed a ruling until the lawyers could file briefs.

Hardin also repeatedly complained about the government's news conference announcing the indictment, saying it made Andersen sound guilty before it had been tried. Buell replied: "There's a lot of evidence of a publicity campaign by the defendants that's very troubling."

Earlier Wednesday, the Houston managing partner for Andersen, K. Eugene Frauenheim, stood before U.S. Magistrate Calvin Botley and entered a loud not-guilty plea on behalf of the accounting firm.

At the same magistrate's hearing, Hardin made clear that the firm would demand its right under the federal speedy trial act to go to trial within 70 days of entering a plea - or by May 29, in this case.

The move was unusual. Most defendants waive their right to a speedy trial because they don't perceive a rapid resolution of the case to be in their favor, lawyers said.

Outside the courthouse, the Andersen employees wore identical t-shirts reading, "I am Arthur Andersen," and chanting "89 years, 85,000." Their chant referred to the age of the company and its number of employees.

"We're just showing our support for the firm and how upset we are that the Department of Justice indicted the whole firm instead of a few people," said Brad Thompson, 39, an eight-year Andersen employee in the crowd. "They indicted our firm, but they didn't indict Enron."

Neither management nor lawyers organized the demonstration, Frauenheim said, but he welcomed it. "The reason they were out there today is because they feel so strongly about the firm," he said.

Frauenheim told reporters after the hearing Wednesday that Andersen intends to survive but needs to clear its name quickly.

"The charges, in my view, are senseless," he said. "But we have to get it resolved and get it behind us."

While a number of big clients have left Andersen, Frauenheim said, "we have a tremendous number that have stuck with us, but they're anxious for us to get this indictment behind us."

Harmon is the same judge overseeing lawsuits arising from the Enron debacle, lawsuits in which Andersen is a defendant.

Lawyers said it is somewhat unusual, but not prohibited for the same judge to be handling related cases on the criminal as well as the civil side of the docket. Federal judges handle both civil and criminal cases, but usually not involving the same defendants.

The civil cases are scheduled for trial Dec. 1, 2003, although many observers expect them to end in an out-of-court settlement.

-- Bruce Nichols