TERENCE SMITH: Corporate document shredding: Standard operating procedure or a felony? Throw in Arthur Andersen and Enron, and it's a case for the Supreme Court. Here to walk us through today's arguments is NewsHour regular Jan Crawford Greenburg, Supreme Court reporter for the Chicago Tribune.
Jan, welcome. We all know that Arthur Andersen over the last few years has been decimated by this case. What is left of the company to either sue or defend?
JAN CRAWFORD GREENBURG: Well, of course, back in the day Arthur Andersen was one of the largest, most respected accounting firms in the world. It had more than 28,000 employees. Today it's down to about 200 employees, who largely are defending litigation and lawsuits. So the company really is in ruins.
TERENCE SMITH: Tell us about the case, what it involves.
JAN CRAWFORD GREENBURG: Well, this is Arthur Andersen's attempt to have the Supreme Court throw out its criminal conviction for witness tampering. This case came about back in 2001, when Enron's problems -- and Enron was Andersen's largest client -- when Enron's problems started becoming public.
At that time, Andersen's lawyers advised employees that they should follow the company's document retention policies, which called for them to destroy drafts and handwritten notes and memos and retain the final official versions. So Andersen began really stepping up some of the shredding efforts, the government contends.
But at that point there was no formal official government investigation under way. And when Andersen got a subpoena later, some weeks later, requesting records from the Securities and Exchange Commission, requesting records that related to Enron, it stopped its shredding.
But to the government, the damage had been done, a crime had been committed. The government stepped in and indicted Andersen for witness tampering because its lawyers had reminded the employees that they could destroy those documents, and the jury convicted Arthur Andersen of that federal crime.
TERENCE SMITH: All right. Now, today, they get to the Supreme Court. What was Andersen's defense?
JAN CRAWFORD GREENBURG: Andersen's lawyer, Marie Mahoney, very forcefully argued that the company had done nothing wrong, that the company lawyers had committed no crime when they advised the employees that they could follow this document retention policy.
Now, the law issue, and Andersen was convicted for corruptly persuading these employees to destroy documents that might be of use in a subsequent investigation. The lawyer for Andersen said this company didn't corruptly persuade; it just reminded the employees of this policy. And "corruptly persuade" means bribing or inducing them to violate the law. They weren't violating law; they were following a lawful company policy.
And furthermore, there was no official investigation underway. So the employees, by shredding the documents, did nothing wrong either because under obstruction of justice statutes, under federal law, it's not a crime for an employee to destroy a document if there's no official investigation underway. So bottom line, Andersen didn't commit a crime.
TERENCE SMITH: And the government's response today and their accusation?
JAN CRAWFORD GREENBURG: The government, Michael Dreaven, and the solicitor general's office, Justice Department, argued again very forcefully -- it was a terrific argument, very well-argued on both sides-- that Andersen had clearly violated this law.
That they weren't destroying documents just out of concern for neatness, and that they were trying to cover up wrongdoing, and that they knew that an official investigation was headed down the pike, and so in the government's view, that was enough to bring Andersen into court and to have them convicted under this federal witness-tampering statute.
TERENCE SMITH: And the Justices, did they indicate their thinking in any way?
JAN CRAWFORD GREENBURG: This was a very lively, very intense argument. The Justices peppered these attorneys with very tough questions, and they were, through their questions, quite sympathetic to Arthur Andersen's argument. Justice Scalia at one point said he thought the government's interpretation of this law was "weird."
Justice Kennedy expressed concern that this conviction, the conviction of Arthur Andersen, could have far-reaching consequences for countless corporations and small businesses that have similar policies about the retention and destruction of documents.
Justices O'Connor and Breyer and Souter - and, you know, we're covering the ideological spectrum here from left to moderate to right -- also expressed serious concerns about Andersen's conviction, offering different reasons for why they were troubled by the government's prosecution of Andersen's conviction in this case. So it was a fascinating argument, last argument of the term, and so well argued, it was a great way to wrap the term up.
TERENCE SMITH: But you still have, and very briefly, some important decisions to come down?
JAN CRAWFORD GREENBURG: We do. As I said, today is the last day of arguments, and now the court will finish writing all these controversial and interesting cases that we've talked about throughout this term.
Of course, we have the Ten Commandments case and whether or not the government can display the Ten Commandments on public property. We've got other cases involving property rights, the Internet, file sharing on the Internet, government taking of someone's real estate and land. All very controversial cases, and we'll have opinions by the end of June.
TERENCE SMITH: Okay, that's great, Jan. Thank you very much.
JAN CRAWFORD GREENBURG: You're welcome.
June 18, 2013
