Wednesday, June 01, 2005

The Andersen Decision...

On Tuesday, the Supreme Court handed down its decision in Arthur Andersen v. United States, with Chief Justice Rehnquist writing for a unanimous Court overtuning the conviction of the former auditing giant.

The Court held that the jury instructions failed to properly describe the elements of a "corrupt persuasion" charge. The court held that the jury instruction extended the criminal statute beyond its intention, allowing non-culpable (non-knowing) individuals to be guilty of crime; the instruction did not convey the required awareness of wrong-doing.

This result was expected, the State's case hinged on being able to convict with no proof of awareness of specific criminal activity. The Court noted, "it is striking how little culpability the instructions required."

See Kevin Russell's (at SCOTUSblog) recap here where he states that, "Accepting the Government’s position, the district court instructed the jury that Arthur Anderson could be convicted under this provision even it “honestly and sincerely believed that its conduct was lawful” and without proof of any nexus between the document destruction and any particular official proceeding."

For more comment and analysis of the decision see the following:
Tom Kirkendall's comments at Houston's Clear Thinkers - here and here.
NY Times - Reversal of Andersen Conviction Not a Declaration of Innocence
Wa Post - Justices Overturn Andersen Conviction
TalkLeft's comments - here
Wall St. Journal - Arthur Andersen's 'Victory'

So, how much of a win is this, how much exoneration? I guess it depends on who you talk to. The Chicago Tribune (AA was headquartered in Chicago) has this piece entitled Andersen alumni see ruling as vindication. The Houston Chronicle has a piece this morning about how former Andersen employees feel about the decision entitled Ruling stirs emotions. From the Chronicle:

Not every former Andersen employee, however, sees the Supreme Court decision as vindication. "I think management had the intent to obstruct justice, to hide things," said David Germain, a former Andersen consultant in Houston. "The employees suffered for the outcome, however. I don't see this as a victory."
And not everyone is sure the ruling means those working with Enron are exonerated of all wrongdoing.
"I'm not saying they were squeaky clean," Brentlinger said. "But the government shouldn't have brought down the whole firm for the mistakes of a few, which now it's not even clear truly were mistakes."

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