Supreme Court Watch

GWEN IFILL:

Now, to the Supreme Court. In a unanimous decision, the Justices overturned the conviction of former accounting giant Arthur Andersen in connection with the collapse of the Enron Corporation. Why the reversal? For that, we turn to, as always, NewsHour regular Jan Crawford Greenburg of the Chicago Tribune.

Welcome back, Jan. Remind us first of all what it was that Andersen was convicted of in the first place.

JAN CRAWFORD GREENBURG:

Arthur Andersen was convicted in 2002 of witness tampering. Now, this case came about the year before when Enron Corporation, the energy giant's problems began becoming public. Of course, Enron was Arthur Andersen's largest client, and relied on the firm for accounting and auditing and consulting advice.

So when Enron's problems and accounting difficulties started becoming public, Andersen's lawyers reminded the Arthur Andersen employees of the company's document policy, that they should destroy documents, drafts, and documents that weren't the final version, so the employees set about doing that, and did so from the month, about a month from when they first learned of Enron's problems up until they received a government subpoena.

GWEN IFILL:

And it was that reminder, which was the nut here, about whether they were using that reminder as a way of suppressing cooperation in an upcoming government investigation?

JAN CRAWFORD GREENBURG:

Right. Obstruction of justice is what the government charged and ultimately convicted Arthur Andersen of doing.

GWEN IFILL:

So that was a huge conviction, highly symbolic in a time when corporate scandals were all the rage and everyone was talking about them. Today, big reversal. Why?

JAN CRAWFORD GREENBURG:

The court today rejected the government's interpretation of this witness tampering law, and said that the jury instructions in the case were just — misstated the law and were wrong. And throughout this conviction it was nine to nothing. The decision was short. It came about very swiftly, and showed that the legal issues for these Justices were so clear that the case had to be reversed.

Now keep in mind that this was a conviction in 2002 that brought down this once-proud accounting company, one of the world's leading accounting companies, 28,000 employees on board. Now it has about 200. So the reversal of this conviction in many ways is just an astonishing end to this story.

GWEN IFILL:

But when you were on the program just a few months ago to talk about this case, the arguments in this case, it was fairly clear, even from the arguments, that the Justices were kind of skeptical of it. Why?

JAN CRAWFORD GREENBURG:

It was very clear in argument, and I think in this case more than any others that I've seen in covering the Supreme Court, the Justices really tipped their hand and said the government's theory in this case — Justice Scalia said during argument that the government's theory in this case was weird.

Other Justices expressed concern that companies that have these kind of document policies that tell employees to destroy documents routinely as part of their recordkeeping could also be coming under prosecution or suspicion if they were ever accused of wrongdoing in the future.

So the decision today, if you saw that argument, was not a surprise. But it was so forceful in tone. It was 11 pages long; it was written by the Chief Justice. It came about less than a month after that argument that its message was quite emphatic that the government's interpretation here just went too far.

GWEN IFILL:

Was it just that the government, that they over informed or under informed these jurors, and that the wording was vague? Or was it about the basic argument here, which was that they had been — that Arthur Andersen was up to no good in trying to get these documents shredded?

JAN CRAWFORD GREENBURG:

No, the government — this case turned on the instructions that the jury received. And the government said that the jury shouldn't have to decide whether Arthur Andersen knowingly was violating the law, whether or not it knew about an official proceeding that was coming down the pike.

And so the jury — and the jury had a very hard time coming to a verdict in this case. The jury's instructions were just too broad. That was at the heart of the court's ruling today, that the jury should have been required to find that Arthur Andersen's lawyers, when they reminded the employees of the document policy, knowingly were trying to persuade them to violate the law, that they had knowledge that what they were doing was wrong.

Of course, Arthur Andersen had long argued that they were doing nothing wrong, that they were just reminding these employees to follow these standard document policies, that they stopped destroying any documents the second that they got a subpoena that notified them an official proceeding was under way. So they have long argued they didn't violate the law.

GWEN IFILL:

Was this the only, as far as you know, the only Enron-related case that's gotten to the Supreme Court so far?

JAN CRAWFORD GREENBURG:

Certainly, yes, of this scope. And Arthur Andersen now, as I said, has 200 employees, mainly just working through legal issues, civil lawsuits. But the decision today puts the spotlight back on the Justice Department.

The Justice Department today came under some harsh criticism from business groups, civil defense, criminal defense lawyers, who said it overreached. The Justice Department now must decide whether it will try to retry Arthur Andersen using different jury instructions.

GWEN IFILL:

So what do they have to take into account, based on what the court told them today in their decision, to retry this?

JAN CRAWFORD GREENBURG:

An assistant attorney general in a statement today said they will carefully examine this decision and look at what actually is required the way that the court has said they have to read the law.

One thing they're going to have to show if they do retry Arthur Andersen is that these lawyers knowingly were doing something wrong. Many people I spoke with today said that would be very difficult to do, and they pointed back to the original trial in 2002, in which the government had a hard time getting a jury to convict without that additional element, without that knowledge of wrongdoing.

It took the jury ten days to convict Arthur Andersen. They were deadlocked. A judge had to order them back to the table to resume their deliberations, so it could be very difficult to get a conviction with even different jury instructions.

GWEN IFILL:

Jan Crawford Greenburg, as always, thank you very much.

JAN CRAWFORD GREENBURG:

You're welcome.