Even before Arthur Andersen LLP became embroiled in the Enron scandal,
the accounting giant had been accused of misleading investors in another
major financial failure. Due in large part to the work of Arizona Attorney
General Janet Napolitano, those investors have won a major restitution.
Victims of the largest nonprofit bankruptcy in U.S. history will receive
$217 million from Andersen -- a settlement of lawsuits filed after the
1999 collapse of the Baptist Foundation of Arizona. Napolitano's office
was one of the three plaintiffs that had filed civil suits against Andersen,
seeking relief for investors.
When the foundation flopped, it left 13,000 small investors with an estimated
$570 million to $590 million in losses. The settlement Napolitano secured
from Andersen, along with the foundation's remaining assets, will ensure
that investors get back up to 80 percent of their lost dollars.
"These investors, many of whom are elderly, trusted the misleading
financial statements audited by Andersen," said Napolitano, the state's
first woman attorney general. "This agreement will allow Baptist
Foundation victims to at least recover most of their investment."
Under Napolitano's leadership, Arizona has created a legal right for
crime victims to get unpaid time off from work to attend court proceedings
involving the crime committed against them. The victims' rights movement,
she says, encompasses New Democrat philosophies of both personal and community
responsibility.
