News and Document archive source
copyrighted material disclaimer at bottom of page

NewsMinecabal-elitew-administrationjudicial — Viewing Item


Supreme court sides with enron accounting firm { May 31 2005 }

Original Source Link: (May no longer be active)
   http://www.washingtonpost.com/wp-dyn/content/article/2005/05/31/AR2005053100521_pf.html

http://www.washingtonpost.com/wp-dyn/content/article/2005/05/31/AR2005053100521_pf.html

Court Overturns Arthur Andersen Conviction

By HOPE YEN
The Associated Press
Tuesday, May 31, 2005; 12:16 PM

WASHINGTON -- The Supreme Court on Tuesday overturned the conviction of the Arthur Andersen accounting firm for destroying Enron Corp.-related documents before the energy giant's collapse.

In a unanimous opinion, justices said the former Big Five accounting firm's June 2002 obstruction-of-justice conviction _ which virtually destroyed Andersen _ was improper. The decision said jury instructions at trial were too vague and broad for jurors to determine correctly whether Andersen obstructed justice.

"The jury instructions here were flawed in important respects," Chief Justice William H. Rehnquist wrote for the court.

The ruling is a setback for the Bush administration, which made prosecution of white-collar criminals a high priority following accounting scandals at major corporations. After Enron's 2001 collapse, the Justice Department went after Andersen first.

Acting assistant Attorney General John C. Richter said the Justice Department was disappointed with the decision and was considering whether to re-try the case with a proper jury instruction.

"The Justice Department's decision to charge Arthur Andersen was based at the time on the determination that the substantial destruction of documents in anticipation of an investigation by the Securities and Exchange Commission violated the law," he said. "We remain convinced that even the most powerful corporations have the responsibility of adhering to the rule of law."

Enron crashed in December 2001, putting more than 5,000 employees out of work, just six weeks after the energy company revealed massive losses and writedowns.

Subsequently, as the Securities and Exchange Commission began looking into Enron's convoluted finances, Andersen put in practice a policy calling for destroying unneeded documentation.

Government attorneys argued that Andersen should be held responsible for instructing its employees to "undertake an unprecedented campaign of document destruction." It said Andersen was guilty under an obstruction law that makes it a crime to "corruptly persuade" others to destroy documents.

But in his opinion, Rehnquist noted that it is not necessarily wrong for companies to instruct employees to destroy documents, even if the intent is in part to keep information from the government.

Like a mother who advises a son to invoke his right against compelled self-incrimination out of fear he might be convicted, "persuading" an employee to withhold information is not "inherently malign," Rehnquist wrote.

"The instructions also diluted the meaning of 'corruptly' so that it covered innocent conduct," Rehnquist said.

At trial, Andersen argued that employees who shredded tons of documents followed the policy and there was no intent to thwart the SEC investigation.

The probe into Andersen led to just one guilty plea, from the firm's former top Enron auditor, David Duncan. But the conviction of the Chicago firm forced it to surrender its accounting license and stop conducting public audits. Some 28,000 workers had to find other jobs, and the company was left a shell of its former self.

A ruling against Andersen could have had onerous consequences for businesses, whose discarding of files is an everyday occurrence. Experts say companies would have had to keep all files for fear that any disposal, however innocent, could subject them to potential prosecution.

According to Andersen attorneys, notes and drafts of documents were thrown away under the firm's document-retention policy in part because they were preliminary and could have been misconstrued.

Andersen's appeal was backed by the National Association of Criminal Defense Lawyers. It argued in a friend-of-the-court filing that broad characterization of "obstruction" used in the jury instructions would also unfairly punish criminal attorneys who advise their clients to withhold evidence in legal ways.

Such a broad reading could open defense lawyers and others to prosecution if they merely advise clients of their rights to assert legal privileges or review document retention policies, the criminal defense group said.

The case is Andersen v. U.S., 04-368.

___

On the Net:

The opinion in Arthur Andersen v. United States is available at:

http://wid.ap.org/documents/scotus/050531andersen.pdf

© 2005 The Associated Press


court-affirmative-action
filibuster
gonzales
roberts
After filibuster fight whitehouse readies for supreme court { May 25 2005 }
Alito memo argues for torture foreigners { November 29 2005 }
Alito rules on case helping his investment funds
Angry americans attempt seizing justice souter property { July 25 2005 }
Ashcroft in contempt of congress senator biden says { June 9 2004 }
Ashcroft retroactively classifies translator sibel edmonds case { July 5 2004 }
Ashcroft says judges threaten national security questioning bush
Attorney general refers to president bush as the client { February 7 2006 }
Bill switches claassaction lawsuits to federal courts
Bush abandons harriet miers nomination
Bush again attempts to push court candidates { December 24 2004 }
Bush attorney general calls owens rulings judicial activism { May 26 2005 }
Bush ex starr aide judgeship { June 19 2003 }
Bush pick miers cited for her religion { October 13 2005 }
Bush puts enduring imprint on nation judiciary { January 15 2006 }
Bush revives candidicies for 20 federal judgeships { February 15 2005 }
Business lobby to get behind judicial bids { January 6 2005 }
Clash over unconstitutional memo { June 9 2004 }
Committee composition dispute
Conservatives rally against gonzales as justice { July 3 2005 }
Conservatives upset over judicial pick miers { October 4 2005 }
Court pick harriet miers most discreet in adminstrative
Court pick harriet miers never has been a judge
Estrada judiciary panel { January 31 2003 }
First alito decision sides with liberals on execution
Frist ethics skeletons
Frist majority leader
Frist seeks chirstain support for judicial nominees { April 25 2005 }
Frist settlement
Frist to end filibusters { May 9 2003 }
Groups sue over erased scalia tapes { May 11 2004 }
Janice rogers brown plays blacks against each other
Journalists ordered to erase scalia speech
Judge admits voiding whistleblower lawsuit draconian { July 7 2004 }
Judge janice brown militant about property rights
Judge no bar { March 17 2001 }
Judicial block
Judicial spare
Lawmakers clash on class action suit bill { July 7 2004 }
Lott not happy with new bush pick
New nominee nicknamed scalito or little scalia { October 31 2005 }
Owens confirmation deals blow to environment { May 25 2005 }
Pickering expected to win { October 1 2003 }
Pickering judicial nomination { December 18 2002 }
Priscilla owens fought by womens rights advocates { May 25 2005 }
Priscilla owens takes enron halliburton money { May 18 2005 }
Roberts avoids specifics during senate hearing { September 15 2005 }
Roberts helped reagan fight sandinistas in nicaragua { August 25 2005 }
Scalia backs police on arrests { December 14 2004 }
Scalia says americans need more orgies { October 1 2004 }
Scalia says detainees have no rights { April 3 2006 }
Scalia says judicial activism renders constitution useless { March 14 2005 }
Scalia says trip with cheney wont effect rulings { March 19 2004 }
Scalia tape erase order raises constitution questions
Scalia thinks americans need more sex orgies { October 1 2004 }
Senate democrats block 3 more bush judicial nominees { July 23 2004 }
Senates new math may aid stalled judicial nominees { February 13 2005 }
Strange judicial vote { November 14 2002 }
Strange judicial vote2 { November 15 2002 }
Supreme court shuffle { May 18 2003 }
Supreme court sides with enron accounting firm { May 31 2005 }
Supreme court vacancy not this year { June 11 2003 }
Syrians lawsuit risks national security says US
Vacancies

Files Listed: 64



Correction/submissions

CIA FOIA Archive

National Security
Archives
Support one-state solution for Israel and Palestine Tea Party bumper stickers JFK for Dummies, The Assassination made simple