The hole keeps getting deeper and deeper for Arthur Andersen. It has now been revealed that Sherron Watkins (the Enron whistleblower) warned them about the company’s accounting shenanigans five months ago, and the firm considered dropping Enron as a client in February, 2001.

Microsoft has released an “internal memo” written by Bill Gates that urges employees to make security and privacy their top priority. My personal feeling on this is that a leopard can’t change its spots, at least not quickly.

Newsweek has the best overview of the Enron collapse yet.

Palm OS 5 has been announced. Unfortunately, hacks will no longer work. However, it will be multithreaded and multitasking, which is useful to people who want to run Web servers on their handhelds.

Here’s another Enron recusal, this one by a judge overseeing shareholder lawsuits.

The Red Herring: Carlyle’s Way. Yet another overview of the Carlyle Group, one of the best examples of crony capitalism going. The formula is simple, hire lots of former politicians with heavy duty pull, buy struggling businesses in industries with strong government ties, have your hired guns use their access to get new government contracts for those businesses, sell the suddenly refurbished businesses. The article even offers an example of the Carlyle Group’s approach:

United Defense makes the controversial Crusader, a 42-ton, self-propelled howitzer that moves and operates much like a tank and can lob ten 155-mm shells per minute as far as 40 kilometers. The Crusader has been in the sights of Pentagon budget cutters since the Clinton administration, which argued that it was a relic of the cold war era–too heavy and slow for today’s warfare. Even the Pentagon had recommended the program be discontinued. But remarkably, the $11 billion contract for the Crusader is still alive, thanks largely to the Carlyle Group.

Here’s the full text of Sherron Watkins’ letter to Ken Lay. If you have an understanding of business jargon and practices, it’s a fascinating read. Anyone can understand these two paragraphs:

<

blockquote> I am incredibly nervous that we will implode in a wave of accounting scandals. My eight years of Enron work history will be worth nothing on my r

The Economist has a story about the fallout for public accounting firms from the Enron collapse.

Jacob Weisberg in Slate: <a href=http://slate.msn.com/?id=2060788″>Enron as Whitewater. Weisberg makes the obvious case that when it comes to charges of wrongdoing by Bush administration officials, there’s no there there, at least not yet. Are the close ties between the Bush administration and the fraudmasters at Enron unseemly? Obviously. But they weren’t seen as such until Enron was exposed as a big stock market scam. At this point, the proper course of action in the Enron scandal is to seek facts without handing down accusations. Once the facts are known, there’s a really good chance that we’ll confirm what I already suspect, which is that nobody in the Bush administration broke the law, and that the laws and regulations that were bought and paid for by Enron created the climate where Enron could get away with the corporate equivalent of murder. The Democrats should be clamoring for those laws to change, and pointing out that the Republicans aren’t going to be the ones who change them.

Salon Premium’s Anthony York has an article on Enron’s role in creating the California energy crisis, and lobbying the Bush administration not to provide relief for California.