· MPs demand check on firm's huge state contracts
· Ministers told they 'must come clean'
Nick Mathiason and Conal Walsh Sunday January 27, 2002 The Observer
An investigation into the Government's links with Enron auditor Andersen will be demanded tomorrow by MPs. They want the House of Commons Select Committee on Public Administration to probe hundreds of millions of pounds worth of government contracts awarded to the firm.
The demand for an investigation is being led by Liberal Democrat economics spokesman Matthew Taylor, who will table questions in the Commons tomorrow. Last night Taylor said: 'Clearly, Andersen in the States sought to build close political contacts on Capitol Hill. It may have taken exactly the same approach in the UK.'
An inquiry will prise open the close relationship between the accountancy giant and New Labour, which developed after Andersen was effectively blacklisted from government contracts during the Eighties following its work as auditor to collapsed carmaker De Lorean.
Andersen supplied key staff and researchers to develop Labour's fiscal policies while in Opposition. Patricia Hewitt, now Trade and Industry Secretary, was the firm's director of research prior to Labour's election victory in 1997. Since then Andersen has worked on some of the Government's highest profile private finance initiative projects and provided audit services for the doomed Millennium Dome.
The threat of an investigation into the relationship between Labour and Andersen comes as dark clouds gather around the 'Big Five' practice.
Last Friday, the US government confirmed it would review all its contracts with the firm. A senior Andersen auditor refused to answer questions at a Congressional hearing about the shredding of key Enron documents last Thursday.
The firm denies wrong-doing over its work with the collapsed energy company.
Taylor said: 'In view of the Enron scandal, Labour needs to spell out its links with Andersen. Labour needs to come clean. Clearly the House of Commons Select committee on Public Administration will have to consider looking into this.'