Michigan Rep. John Dingell (D), ranking member of the House Committee on Energy and Commerce, has called for an investigation of Enron Corp.’s accounting firm Arthur Andersen LLP, regarding the audits it performed at Enron as well as Waste Management Inc. Dingell sent a letter on Monday to the Public Oversight Board.

In the letter, Dingell asked for “an oversight review or special investigation” of the Chicago-based Big Five accountant. He also asked the board to look into peer reviews of the accounting firm in recent years by other accountants, including Deloitte & Touche, and asked about the triennial peer review process that has been in place since 1978.

“The best accounting standards in the world are meaningless if the accounting and audit processes are so inept or corrupt that they produce unreliable numbers and untruthful reporting,” according to the letter from Dingell, noting that his request included an “investigation or review” of “adequate, transparent and public disclosure of all significant issues identified.”

Andersen was auditor to Enron, which now is facing a probe by the U.S. Securities and Exchange Commission (SEC) of certain related-party transactions, which in turn sent the company’s stock price plummeting and led to its announced merger with rival Dynegy Inc. Dingell’s criticism is not the first for Anderson, as critics have charged that the accountant should have done more as Enron’s auditor to draw investors’ attention to Enron’s unusual finances. A lawsuit filed in Oregon against Enron and its board alleges Andersen’s judgment was questionable because of its high consulting fees that it received from Enron, while it was also paid as auditor. Enron shareholders have lost about $19 billion over the last month as the company’s stock price went into a downward spiral.

Enron named Deloitte & Touche as part of its special committee to investigate the related-party transactions after the SEC launched a probe in October. However, Dingell wrote in his letter that Deloitte is conducting a triennial peer review of Andersen, under a system to ensure quality accounting. The Public Oversight Board supervises the peer review process. Dingell said the review by Deloitte of Andersen raises questions about a conflict of interest.

“Given the appearance of conflicts of interest, the public record to date regarding allegations of professional malpractice or worse by Andersen in both the Waste Management fraud and the evolving Enron Corp. accounting debacle, as well as the considerable damage to investors, there appears to be little reason for the public to have faith in Andersen or the peer review process,” wrote Dingell. Andersen was fined $7 million in June by the SEC to settle charges that it filed false and misleading audit reports of Waste Management. Andersen did not admit or deny the charges.

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