Arthur Andersen had no government regulation power.
The point was not a game without referees. The point was not having the referees and players be the same people or organizations.
For example, the government that regulates the auto industry now has a piece of the action of certain automobile companies, and the urge to "tilt the field" is going to become irresistible. This is already beginning to have repercussions. The whole Toyota thing smells a bit in my opinion.
And it's far from the only field where industries and their regulators have been getting too cozy for anyone's good. Corruption is inherent wherever governments have too much control of how things are done, and too much of a stake in the business they control.