[Mb-civic] US court overturns Arthur Andersen conviction

[Michael Butler]

US court overturns Arthur Andersen conviction
>By Patti Waldmeir in Washington
>Published: May 31 2005 15:55 | Last updated: May 31 2005 17:53
>>

The US Supreme Court on Tuesday overturned the Enron-related conviction of
Arthur Andersen, the former accounting giant, dealing a blow to the US
government's aggressive corporate fraud crackdown.

In a ruling that was immediately welcomed by the US business community and
white collar defendant groups, the court said Andersen's conviction - in the
biggest corporate trial of the post-Enron period - was based on faulty jury
instructions.

Andersen was convicted in 2002 on a charge of witness tampering, after
Andersen officials urged employees to comply with the firm's document
retention policy, which led to the shredding of some documents connected to
the firm's audits of Enron.

The instructions indicated that the jury "need not find any consciousness of
wrongdoing in order to convict," Chief Justice William Rehnquist wrote for a
unanimous court, adding that it was "striking how little culpability the
instructions required".

The ruling stressed that withholding information from the government was not
itself a crime. "Under ordinary circumstances, it is not wrongful for a
manager to instruct his employees to comply with a valid document retention
policy, even though the policy, in part, is created to keep certain
information from others, including the government," he wrote.

The decision comes too late to help Andersen, which now has only 200
employees, mostly lawyers and administrators.

But Stephanie Martz of the white collar crime project of the National
Association of Criminal Defence Laywers said it could help other white
collar defendants: "The point this opinion makes is that is perfectly legal
under the adversarial system to withhold information under many
circumstances."

Robin Conrad of the US Chamber of Commerce said the case highlighted the
consequences of overly aggressive fraud prosecutions "This is an instance
where the collateral damage of over-aggressive enforcement takes its toll on
the average citizen," she said, noting that thousands of people lost their
jobs after Andersen's conviction.

The ruling does not preclude the possibility of a new trial. The US justice
department said on Tuesday that it would "carefully examine today's decision
and determine whether to re-try the case".

"We remain convinced that even the most powerful corporations have the
responsibility of adhering to the rule of law," acting assistant attorney
general John Richter said.

A ruling against Andersen could have had enormous consequences for
businesses, which regularly discard files both for practical reasons and to
avoid litigation.

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