Reacting swiftly to the first indictment in the Enron bankruptcy, the government on Friday suspended Enron Corp. and its former accounting firm, Arthur Andersen, from entering into new federal contracts. “To qualify as a responsible contractor, a company or individual must have a satisfactory record of integrity and business ethics,” the General Services Administration said. Enron has some $35 million in contracts with federal agencies. Andersen’s federal contracts are worth $60 million to $90 million, GSA general counsel Raymond McKenna said.
The exodus of blue-chip clients from Arthur Andersen LLP accelerated Friday, with four more Fortune 500 companies bolting, reflecting increased concern the end may be near for the now-indicted auditing giant. Sara Lee Corp., Abbott Laboratories Inc., Northeast Utilities and Brunswick Corp. all severed decades-long relationships with Andersen as their auditor, and others also said they were considering firing the Chicago-based firm.
OPEC announced Friday that it would leave its oil production target intact until its members meet again in June to reassess market conditions, a decision expected to have only a slight impact on consumers. The Organization of Petroleum Exporting Countries chose not to adjust output in spite of a recent surge in crude prices. While noting “encouraging signs” of a global economic recovery, OPEC officials said the group’s members weren’t convinced the recovery was robust enough to justify their pumping more oil before summer. OPEC representatives approved the decision in a five-hour meeting at their headquarters in Vienna.
The Federal Trade Commission wants more authority to penalize telephone companies that take advantage of consumers with fraud and deceptive advertising, FTC chairman Timothy Muris said Friday. Telephone carriers have been exempt from the FTC’s enforcement authority since 1938 to avoid duplicating the efforts of the Federal Communications Commission. However, since the Bell breakup in 1984, growth in the number of telephone companies has led to increasing competition, advertising and the potential for fraud. “That exemption can stand in the way of meaningful consumer protection and I believe it should change,” Muris said at a Consumer Federation of America conference of consumer leaders. “The FTC should be allowed the jurisdiction to scrutinize deceptive practices in the telecommunications area like we do in other areas.”
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