Ex-Anderson employee reflects on firm's accounting scandal
By SARAH NESTOR
Saint Mary's Editor
Susan Glockner Gallagher, a 1980 Saint Mary's graduate, shared her experiences as a former Arthur Andersen audit partner with Andersen's Chicago office in her lecture "The Light at the End of the Tunnel isn't a Train" in Carroll Auditorium Tuesday evening.
Gallagher, who was an employee of Andersen for 22 years, worked as a spokeswoman for the accounting firm when the Enron investigation began until the eventual demise of the firm. Gallagher said it is important to realize that Enron's problems did not suddenly occur.
Arthur Andersen was the largest accounting firm in the nation before being indicted by the federal government for destroying documents for its client Enron.
"A lot of you read that the [Enron] stock dropped overnight but if you go back you can find that Enron's stock began to drop a year before," Gallagher said.
Gallagher said records show that Andersen highlighted the risks that Enron was taking, but employees within Enron did not disclose all the information.
"You question whether you did enough work to fine fraud, but if people are intentionally hiding things, that becomes difficult," Gallagher said.
Gallagher questioned how the press covered Enron, especially with regard to reports about shredding documents and that Enron employees would not be able to sell their stock in the company. Gallagher said the press did a great disservice to the public by telling them to sell their stock, when the CEO and analysts were telling then not to.
"The shredding goes on everyday in large corporations. Critical Enron documents were not shredded," Gallagher said. "Enron retirees could sell their stock, there was only a small amount of people who had a closed window period and it was only for a couple days in which they could not sell their stock."
The problem with corruption within Enron was that the laws did not kept up with the needs of the businesses, said Gallagher. This is a problem that the Securities and Exchange Commission is trying to address, she added.
However, Gallagher said that because of a lack of government funding and staff to ensure the rules are being followed, it is unlikely that new rules will immediately be enforced.
"I suspect the rest of the year will be bumpy. I think more companies will fail and make headlines," Gallagher said.
Gallagher has moved on, with other former Andersen employees, as a corporate officer with the newly formed Huron Consulting Group based in Chicago. Gallagher and her partners want the consulting group to embody the importance of integrity and values once associated with Andersen.
All News Stories for Wednesday, November 13, 2002
