Utility, three casinos weigh future with Arthur Andersen

MERRILLVILLE, Ind. -- As Arthur Andersen struggles to survive the Enron scandal and a federal indictment, two of Indiana's most highly scrutinized industries must decide whether to continue using the troubled accounting firm.\nAt stake for northwest Indiana's energy giant, NiSource, and three riverboat casinos are public trust and credibility.\nNone has said publicly that it will fire Andersen, but analysts say it's a possibility. Financial observers agree that highly regulated industries such as utilities and casinos must preserve confidence in their accounting practices.\n"If (a casino's) auditor is under criminal indictment, it creates a negative perception from the public," Cory Aronovitz of the Casino Law Group in Chicago told the Post-Tribune for a story published Sunday.\nBill Keegan, spokesman for NiSource, the parent company of Northern Indiana Public Service Co., declined to elaborate on the corporation's relationship with Andersen.\nState utility regulators say they are unlikely to intervene in NiSource's choice of auditors.\n"I really doubt it's something we would get in the middle of," said Mary Beth Fisher, an Indiana Utility Regulatory Commission spokeswoman. "We don't micromanage these people."\nAndersen is accused of shredding tons of documents and deleting computer files related to bankrupt Enron. The firm pleaded innocent to those charges last week.\nAndersen is the dominant auditor for the gambling industry and serves three casinos in northern Indiana: Harrah's, Trump and Horseshoe.\nHarrah's operates a casino in East Chicago. Company spokesman Gary Thompson declined to comment on whether the casino is seeking another auditor.\nAt Trump, which runs a casino in Gary, Ind., corporate treasurer John P. Burke said the company plans for Andersen to complete the casino's audit for the year, but executives are prepared to change accountants if needed.\nKirk Saylor, senior vice president and chief financial officer for Horseshoe Gaming Corp., which runs a casino in Hammond, Ind., said the company may begin searching for a new accountant, depending on developments.\n"More than likely I would assume we're going to have to change because they're going to not be in business anymore," Saylor said.\nThe casinos might not have a choice. The New Jersey Division of Gaming Enforcement last week filed a motion with its regulating board that would prohibit New Jersey casinos, their parent companies and their affiliates from using Andersen as an auditor.\nJack Thar, executive director of the Indiana Gaming Commission, said he will honor such an order, meaning Harrah's, Horseshoe and Trump would be forced to find new auditors.\nIn the meantime, Thar has ordered all Indiana casinos to submit a written report detailing their relationships with their auditors, even if they do not use Andersen.\nState gambling regulators have the authority to ban casinos from using Andersen, but they plan to wait before issuing any order.\n"We're dealing with an issue that could cause tens of thousands of people to be unemployed, so we'll go slowly with that," Thar said.