New York (March 25, 2002) -- Former Federal Reserve chairman Paul Volcker, chairman of the oversight board charged with restoring embattled Andersen's reputation, proposed a seven-member governing board takeover the struggling firm, provided that the Department of Justice dismiss without prejudice its indictment against the firm and certain other conditions are met.
At a press conference late Friday, Volcker said a seven-man board, led by him, would take the reigns at the troubled firm and rebuild it with a focus primarily on auditing. In addition to the dismissal of the indictment, which is perhaps the highest hurdle the plan faces, Volcker said a commitment to the effort by a "critical mass" of Andersen's senior partners, and settlement of the class action lawsuits and Securities and Exchange Commission actions against the firm are required for the to work.
"Our interest is not in Andersen as a company; our interest is in Andersen as something that can become a model for the direction we think the audit profession should be taking," Volcker told reporters at the press conference in his office late Friday afternoon.
The plan would also include vetting the firm's management. "There's no doubt there will be changes at the top," said Volcker, who said he expects answers from all involved players "in a matter of days."
In addition to Volcker, the members of the proposed governing board would be: The Vanguard Group founder John C. Bogle; Charles Bowsher, chairman of the Public Oversight Board, which will disband this month; C. Michael Cook, former chairman and chief executive of Deloitte & Touche; former Missouri Senator John C. Danforth; Russell E. Palmer, former managing partner of Touche & Ross; and P. Roy Vagelos, retired chairman and chief of Merck & Co.
-- Melissa Klein
