Tuesday, May 31, 2005

Supreme Court Reverses Arthur Andersen Conviction

The Supreme Court unanimously reversed the conviction of the CPA firm, Arthur Anderson, on charges related to the Enron scandal. Andersen was convicted of obstruction of justice for destroying documents related to its audits of Enron and to what Anderson's personnel knew of the accounting fraud. The grounds for reversal concerned the jury instructions. The critical part of the jury instructions concerned the definition of "corruptly persuades":
To "persuade" is to engage in any non-coercive attempt to induce another person to engage in certain conduct. The word "corruptly" means having an improper purpose. An improper purpose, for this case, is an intent to subvert, undermine, or impede the fact-finding ability of an official proceeding.

The Supreme Court found that the trial court erred by excluding "dishonestly" and adding "impede" in the instrustions.

These changes,” wrote the chief justice, “were significant. “[D]ishonest[y]” was no longer necessary to a finding of guilt, and it was enough for [Andersen] to have simply “impede[d]” the Government’s factfinding ability. “Impede” has broader connotations than “subvert” or even “undermine,” and many of these connotations do not incorporate any “corrupt[ness]” at all.

All organizations with record retention policies can breathe a little easier after the Court's ruling today.

I heard one news report that included the fact that the reversal of the conviction does not mean that Andersen is innocent. It is strange that this thought does not seem to make into news reports of reversals of convictions of individuals who commit murder.


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