For many people, accounting firm Arthur Andersen conjures up images of the fall of Enron. The memories are particularly painful for Andersen...

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HOUSTON — For many people, accounting firm Arthur Andersen conjures up images of the fall of Enron.

The memories are particularly painful for Andersen employees who were laid off when the firm cratered amid the Enron scandal. So this week, when Andersen is expected to appeal its 2002 obstruction-of-justice conviction to the U.S. Supreme Court, they’re showing little enthusiasm.

“When I first heard they were appealing it, I thought they were crazy and it was a waste of time and money,” Randy Paschke said. “It’s not going to bring the firm back.”

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Paschke, a 32-year veteran of Andersen’s Detroit office, now heads the accounting department of Wayne State University’s business school.

Andersen’s U.S. operations barely exist, with fewer than 200 Chicago-based employees who largely handle lawsuits. Most of its 28,000 workers moved on to other accounting firms, while others, like Paschke, switched careers.

Partners lost their capital — investments in the firm of $1 million or more — and may only get a fraction back after Andersen settles and litigates lawsuits.

Yesterday, Andersen settled a lawsuit with WorldCom investors who claimed the auditors failed to protect them from the communications company’s $11 billion accounting fraud.

It’s not clear where Andersen will get the money for a settlement. It likely has funds left from liquidating assets or in its reserves for insurance losses, said industry expert Mark Cheffers, CEO of market-research firm Audit Analytics.

Andersen went to trial in May 2002 with little more than a shattered reputation to save. It was accused of destroying Enron records just as the government began investigating Enron’s finances. Its defense argued company policy required the destruction of client-sensitive draft documents.

In its appeal, Andersen claims a federal judge’s jury instructions were too vague. The 5th U.S. Circuit Court of Appeals upheld the conviction, calling the firm a member of Enron’s “supporting cast.” Now, it’s up to the Supreme Court to decide.

“It might allow for a little bit of a positive sense of closure for some people, but it can’t replace jobs,” said Jonathan Goldsmith, a former Andersen associate who runs a Web site for former Andersen workers. Recent posts include a reminder about a reunion next month for former Andersen workers in Atlanta.

James Hecker, a former Andersen partner in Houston who never touched an Enron audit, said he was turned away by firm after firm for a year and a half after Andersen became a felon.

“Andersen and Enron, you want to talk about the gift that keeps on giving?” said Hecker, now a financial planner in Houston. “It just never goes away.”

David Duncan, Andersen’s former top Enron auditor, remains the only Andersen staffer charged with a crime. He pleaded guilty three years ago to obstruction and testified in the firm’s trial, but remains free as he cooperates with prosecutors.

Barry Flynn, one of his attorneys, said Duncan likely will testify in January’s fraud and conspiracy trial of Enron founder Kenneth Lay, former CEO Jeffrey Skilling and former top accountant Richard Causey, further delaying his sentencing.

“He’s just hanging in there,” Flynn said. “There are people just like him whose lives have been put on hold.”

Richard Corgel, a former Andersen partner who joined the firm’s internal investigation of document shredding, said he believes the government overreached in its pursuit of Andersen. Corgel joined Navigant Consulting in the latter half of 2002 and helps corporate boards with internal investigations.

“We had a lot of very fine people who were affected by this, emotionally, financially, even to the extent of still being chased in some way … , ” Corgel said. “It just seemed very unfair as it related to our [employees], the overwhelming majority of whom never had anything to do with the allegations.”

Other top Andersen executives also moved on. Joseph Berardino, the Andersen CEO who resigned in March 2002, works at a private equity firm in New York. Nancy Temple, the former staff counsel who e-mailed the Houston office to remind auditors of the firm’s document destruction and retention policy, practices law in Chicago.

Hecker had a harder time than many of his former colleagues, although he was never suspected of wrongdoing.

He was twice a prosecution witness, first during Andersen’s trial, and again in the 2003 fraud and conspiracy trial of Jamie Olis, a finance executive for Dynegy, whose books Hecker audited.

The Olis trial was unrelated to Enron, though Olis was convicted of helping push a similar deal to boost cash flow while hiding the illegal details from Hecker.

The Dynegy overhang hurt Hecker. He spent more than a year searching for a job, even getting turned away by his former Andersen friends who had been hired by other firms.

“I didn’t get to the interview phase with hardly anybody. Maybe it was the baggage,” he said.

Some firms called Hecker after the Dynegy case ended, but by then he had joined the company that handled his personal financial planning for years. He enjoys the work and has no regrets.

“Do I sit up at night and think about this? No, it’s over, it’s history,” Hecker said. “But there are still people with no taint, who never had to testify, who are also incredibly bitter.”