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Bittersweet vindication for Andersen alumni; at troubled BearingPoint, "You" is plural; CFOs on the move.
Kate O'Sullivan, CFO Magazine
July 1, 2005
The U.S. Supreme Court's unanimous overturning of Arthur Andersen LLP's conviction on obstruction-of-justice charges has been greeted with a muted cheer by members of the firm's far-flung alumni network. "You can't go back and put the pieces together," says Warren Turner, a former Andersen auditor who now runs the Website www.andersenalumni.com and works as a financial consultant at Cardinal Points Group LLC. "But the vindication was sweet."
"Until the demise of Andersen, I didn't realize the emotional attachment I had to the firm," says Kirk Hancock, an Andersen alum who is now CFO of The North Highland Co., a consulting firm. "Even though the ruling is too little, too late, I was glad to see it." Hancock says he never felt his association with Andersen hurt his résumé, and adds that in his experience, most businesspeople viewed the firm's troubles as the work of a few bad apples. "I was amazed at the goodwill that existed for Andersen," he says.
Erik Christensen, a former Andersen employee and now president of Bulldog Movers, a relocation company in Atlanta, agrees. "I think people outside the profession may have lumped Arthur Andersen with Enron and WorldCom, and now there's some vindication for people who spent their careers there," he says.
The Court's decision turned on the jury instructions given during Andersen's 2002 trial in Houston. Prosecutors argued that the firm had "corruptly" persuaded its employees to destroy documents relating to its audits of Enron. But the Supreme Court ruled that the jurors had not been held to a high enough standard of proof in making their decision. "We hold that the jury instructions failed to convey properly the elements of a 'corrupt persuasion,'" wrote Chief Justice William Rehnquist in the 9–0 decision. The Court did not, however, proclaim Andersen innocent, leaving the door open for a possible retrial.
Meanwhile, some former Andersen employees continue to stay in touch with one another. Turner, who is working to publish an alumni directory, recently attended an alumni event that drew some 450 people. And many ex-employees have found new work. "Ninety-five percent of people have landed on their feet," asserts Christensen. "After Sarbanes-Oxley, there probably isn't anyone in the field without a job today." —Kate O'Sullivan
Here's Looking at You
Is he man or superman? In March 2005, Harry You left his post as CFO of Oracle to become CEO of BearingPoint Inc., the troubled McLean, Virginia-based consultancy. But since May, You has also been serving as interim CFO, after Joseph Corbett, who had been on the job for less than five months, resigned.
Corbett's resignation was the latest in a string of bad news from BearingPoint, which reported $3.1 billion in 2003 revenues. Last November, the consultancy announced an accounting error of approximately $93 million, and since then its troubles have included a Securities and Exchange Commission investigation, a missed SEC filing, an announcement that it would have to restate the financial results of the first three quarters of 2004, and a report of faulty financial controls.
At press time, You was looking to hire a new CFO. "He'd better do it pretty darn quick," says Kerry Moynihan, a managing partner at executive search firm Christian & Timbers. "By playing the role of both CEO and CFO, You is sending a very troubling and mixed message to the marketplace." Moynihan sees a variety of possible reasons behind Corbett's sudden resignation, including the chance that more financial problems were found or that the executive team is difficult.
Corbett, who had formerly held the CFO title at Intelsat, a Bermuda-based satellite company, deemed the parting mutual. "Harry and I together decided that the challenges facing BearingPoint require that Harry have a CFO of his own choosing," he said in a statement. —Laura DeMars
CFOs on the Move
Amusement-park operator Cedar Fair has promoted Peter Crage to finance chief upon the retirement of Bruce Jackson..... ITT Industries has a new CFO, naming George Minnich to the post this month.... BJ's Wholesale Club has promoted Paul McDonough to the top finance job as Frank Forward becomes chief administrative officer..... Career consulting firm Lee Hecht Harrison has appointed Daniel Schlotterbeck finance chief.... Anne Lloyd has become CFO at Martin Marietta Materials, advancing from her role as controller..... Amanda Bokman has resigned from preppy-apparel purveyor J. Crew..... Michael Sileck has entered the ring as CFO of World Wrestling Entertainment, replacing Phil Livingston.