Wednesday, November 1, 2017
In the course of a classic puff piece on Andrew Weissmann, Robert Mueller's number two man, New York Times reporter Matt Flegenheimer writes that the conviction obtained by Weissmann's Enron Task Force in the Arthur Andersen case was overturned by the U.S. Supreme Court "over a narrow issue involving jury instructions." This is profoundly misleading, as anyone even remotely familiar with the case should know. The issue was not narrow at all. The jury instructions insisted upon by the Enron prosecutors, and approved over defense objections by a pliant judge, allowed Arthur Anderson to be convicted for a crime that did not exist. The instructions achieved this result by effectively eliminating a key intent element in the definition of obstruction of justice. Here is what happened.
In Arthur Andersen, Enron Task Force prosecutors convinced Judge Melinda Harmon to alter her initial jury charge, defining the term "corruptly." Judge Harmon's charge was right out of the form book, based on the approved Fifth Circuit Pattern Criminal Jury Instruction. The Government's definition allowed conviction if the jury found that Andersen knowingly impeded governmental fact-finding in advising Enron's employees to follow Enron's document retention policy. The word "impeded" was nowhere to be found in the Pattern Instruction. The 5th Circuit Pattern's requirement that the defendant must have acted "dishonestly" was deleted by Judge Harmon and the jury was allowed to convict based on impeding alone. Thus, at the government's insistence, knowingly impeding the fact-finding function replaced knowingly and dishonestly subverting or undermining the fact-finding function. This effectively gutted the scienter element in contravention of the standard Pattern definition.
As Chief Justice Rehnquist, speaking for a unanimous Court, wrote: "The jury instructions failed to convey the requisite consciousness of wrongdoing. Indeed, it is striking how little culpability the instructions required. For example, the jury was told that, even if petitioner honestly and sincerely believed its conduct was lawful, the jury could convict."
Moreover, according to Rehnquist, "[t]hese changes [to the jury instructions] were significant. '[D]ishonest[y]' was no longer necessary to a finding of guilt, and it was enough for petitioner 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. Under the dictionary definition of 'impede,' anyone who innocently persuades another to withhold information from the Government 'get[s] in the way of the progress of' the Government. With regard to such innocent conduct, the 'corruptly' instructions did no limiting work whatsoever."
Put simply, the trial and conviction of Arthur Andersen destroyed a major public accounting firm, based on a non-existent legal theory pushed by the Enron Task Force. There was nothing narrow or technical about it.
UPDATE: See Ms. Powell's comment below. Licensed To Lie, by Ms. Powell, does go into many of the problems with the Enron Task Force. I reviewed the book for our readers when it came out. Here is that review.