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Jewish World Review Feb. 13, 2002 / 2 Adar, 5762
Dodd scurries for cover
http://www.NewsAndOpinion.com -- NOW that all Congressional dealings with the bankrupted Enron Corporations and its outside auditors, Arthur Andersen, are under the glare of public scrutiny, Connecticut's Democratic Senator Chris Dodd is scurrying for cover, like a cockroach when the kitchen lights come on. Running for President, this former chairman of the Democratic National Committee prefers to dole out favors to special interest campaign contributors in the dark of night.
Dodd's connections with Arthur Andersen and his vigorous efforts on their behalf are proving a bit of an embarrassment to Democrats bent on pinning the Enron Scandal on Bush and the Republicans.
Dodd protested my accusations in a letter to the New York Post saying "Dick Morris mistakenly contends that legislation cosponsored by Sen. Christopher Dodd is somehow responsible for the Enron fiasco."
But all independent observers seem to disagree with Dodd. The Washington Post editorialized two weeks ago that "Sen. Chris Dodd, who now proposes reformist legislation, led a battle in 1995 to limit auditor's liability." The Post said that "all the players in this scandal - Enron's managers, its auditors, the lawmakers - helped to create the conditions for Enron's collapse."
Dodd's interest in protecting lawyers and accountants from the frauds they help their clients commit, however, goes back well before Enron. In the early-nineties, 6,000 Connecticut investors were lured by inflated forecasts of earnings by Colonial Realty, to invest, and lose, tens of millions. The predictions were endorsed by Arthur Andersen and the law firm of Tarlow, Levy, Harding and Droney. Ultimately, the lawyers had to pay $10 million and Arthur Andersen $103 million in fines and judgments.
The law firm's principal, John Droney, is a former Connecticut Democratic State Chairman and a lifelong friend and ally of Dodd. The Senator nominated Droney's brother, Christopher, first U.S. Attorney and then Federal District Court judge.
According to the Hartford Courant, Dodd filed a bill to "limit the liability of accountants and lawyers" in securities fraud cases." The "original draft" of Dodd's bill "put cases currently pending under his proposed law - such as the Colonial case." The retroactive provision was dropped, but Dodd did his best.
Dodd's bill went on to pass (over Clinton's veto). According to the Washington Post, it provided that:Accountants, lawyers and other professionals who do work for firms accused of stock fraud could no longer be sued for 'aiding and abetting' the fraud.
In cases where accountants, lawyers, etc.are ruled to be co-conspirators in securities fraud, they can be held responsible only for their share of losses.
Lawsuits accusing corporations of defrauding investors by making misleading forecasts would be restricted by creating a 'safe harbor' for most forecasts.
Now, in a letter to the New York Post, Dodd says his bill "protects investors." With protections like this, they won't need enemies. The Consumer Federation of America, the Consumers Union, and Public Citizen called Dodd's bill "anti-consumer, anti-elderly, and anti-investor" and Ralph Nader labeled it the "accountants immunity act."
The New York Times said Dodd is "perhaps the accounting industry's closest friend in Congress."
Dodd received $505,453 from accounting firms and their employees since 1989, the second highest total for any member of Congress. He also got hundreds of thousands more from the securities and high tech industries which wanted to avoid shareholder lawsuits.
They got their money's worth.
Dodd's letter also says I "erroneously" said he "brokered" a deal to stop the SEC from barring accountants, like Andersen, from offering consulting services to clients they audit, like Enron.
Erroneous? The associated press reported, on January 16 of this year that "Dodd helped broker a deal between the Securities and Exchange Commission and the Big Five accounting firms, which ended the SEC's push to restrict auditors from selling consulting services to their clients."
SEC chairman Arthur Levitt Jr. was "campaigning feverishly" according to the Washington Post in October of 2000 to "ban accounting firms from offering consulting services to their audit clients" - precisely the practice that lay at the core of Arthur Andersen's coverup of Enron's frauds.
The Post noted that "a handful of influential members (of Congress) including Senators Phil Gramm (R-Tex), Sen. Christopher J. Dodd (D-Ct) and Rep. W.J. 'Billy' Tauzin (R-La) began acting as intermediaries to push both sides to reach a compromise."
The "compromise" killed the SEC proposal.
Democrats should be grateful if Chris Dodd decides to vacation in the Caribbean during the Enron scandal. He's too hot to have around these days.
-- Cherri's Alter-Ego (email@example.com), February 13, 2002
Regarding Enron, the fact that there are extremely smelly individuals in both parties does not detract from the force of what Cherri has been saying, IMHO.
-- Peter Errington (firstname.lastname@example.org), February 13, 2002.
Correct, both parties are guilty of graft and corruption. This isn't just a partisan game that our government officials are playing. They find profit everywhere.
It is difficult, if t impossible to find an honest politician
-- Cherri (email@example.com), February 14, 2002.