Arthur Andersen LLP served as Enron Corporation’s auditor.

Arthur Andersen LLP served as Enron Corporation’s auditor.

Arthur Andersen LLP served as Enron Corporation's auditor. In Fall 2001, as Enron faced a series of accounting scandals, Arthur Andersen formed an “Enron Crisis Response Team.” During October, on several occasions, Arthur Andersen emphasized to its employees that its documentation and retention policy should be followed. In late October. the Enron Crisis Response Team received specific instructions to comply with the firm's documentation and retention policy. These instructions caused team members to shred Enron-related documents. This shredding involved thousands of documents and continued for days. Even on October 30. when the SEC opened a formal investigation and asked Enron for accounting documents, the shredding at Arthur Andersen did not stop. On November 8, the SEC served both Enron and Arthur Andersen with subpoenas for accounting records. Finally, the next day, Arthur Andersen officials stopped the document-shredding process. In March 2002. Arthur Andersen was indicted for “knowingly, intentionally; and corruptly persuading- its employees to destroy documents to obstruct a criminal investigation. A the end of the trial, the judge instructed the jury that Arthur Andersen could be found guilty if the jury found the tams intended to “subvert, undermine, or impede” a governmental investigation. The jury deliberated for ten days before finding Arthur Andersen guilty The 5th Circuit of Appeals affirmed the conviction and Arthur Andersen was granted this review by the Supreme Court to
determine the degree of conscious wrongdoing needed to support a comics: On. REHNQUIST. C.J.: …Chapter 73 of Title IS of the United States Code provides criminal sanctions for those who obstruct justice. Sections 1512(bl(2NAI and (ft). part of the witness tampering provisions. provide IA relevant Pau: %Mona knowingly uses intimidation or physical face. threatens. cc corruptly persuades another per son. or attempts ',do so. or engages in misleading condor, toward another person. with intent to . . eau= or induce any «non to … withhold tn. unions, cc withhold a record. document. or other ohion, keen an 0,110.11   , mutilate- or conceal an object with intent to impair the ohicces integrity or availability for use in an official proceeding … stall he fined under this tick Of imprisoned not more than ten years. or both. In this case. our attention is focused on what it means to “knowingly … corruptly persuade” another person “with intent to … cause` that person to “withhold` documents from. or “alter” documents for use in, an “official proceeding.” We have traditionally exercised restraint in assessing the reach of a federal criminal statute, both out of deference to the prerogatives of Congress and out of concern that a fair warning should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed. Such restraint is particularly appropriate here, where the %I underlying the conviction—”persuasion”— is by itself innocuous. Indeed. “persuading` a person *with intent to … cause” that person to “withhold' testimony a documents from a Government proceeding or Government official is not inherently malign. Consider. for instance, a mother who suggests to her son that he invoke his right against compelled self-incrimination. or a wife who persuades her husband not to disclose marital confidences. Nor is it necessarily corrupt for an attorney to 'persuade” a client 'with intent to … cause” that client to 'withhold” documents from the Government. In Upjohn Co. r. United States, 101 S. Ct. 677 119816 for example. we held that Upjohn was justified in withholding documents that were covered by the attorney-client privilege from the Internal Revenue Service ORS). No one would suggest that an attorney who “persuaded` Upjohn to take that step acted wrongfully. even though he surely intended that his client keep those documents out of the IRS' hands. Document retention policies. which are created in part to keep certain information from getting into the hands of others, including the Government. are common in business. It is, of course, not wrongful for a manager to instruct his employees to comply with a valid  retention policy under ordinary circumstances. Acknowledging this point. the parties have largely focused their attention on the word “corruptly” as the key to what may or may not lawfully be done in the situation presented here. Section 1512(b) punishes not just “corruptly persuading” another. but “knowingly … corruptly persuading” another. The Government suggests that “knowingly” does not modify “corruptly persuades.” but that is not how the statute most naturally reads. It provides the mess rea “knowingly”—and then a list of acts—”uses intimidation or physical force. threatens, or corruptly persuades.” We have recognized with regard to similar statutory language that the wens yea at least applies to the acts that immediately follow, if not to other elements down the statutory chain…. The parties have not pointed us to another interpretation of “knowingly … corruptly” to guide us here. In any event, the natural meaning of these terms provides a clear answer. “Knowledge' and knowingly' are normally associated with awareness, understanding. or conscious-ness. “Corrupt” and “corruptly” are normally associated with wrongful. immoral, depraved. or evil. Joining these meanings together here makes sense both linguistically and in the statutory scheme. Only persons conscious of wrong-doing can be said to “knowingly … corruptly persuade.” And limiting criminality to persuaders conscious of their wrongdoing sensibly allows § 15121b) to reach only those with the level of culpability … we usually require in order to impose criminal liability.  limits   need not beexplored here because the jury instructions at issue simply 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 that its conduct was lawful, you may find )petitioner) guilty.* The instructions also diluted the meaning of “corruptly` so that it covered innocent conduct. The parties vigorously disputed how the jury would be instructed on “corruptly.” The District Court based its instruction on the definition of that term found in the Fifth Circuit Pattern Jury Instruction…. This pattern instruction defined “corruptly' as “knowingly and dis-honestly, with the specific intent to subvert or undermine the integrity` ' of a proceeding. The Government, how-ever. insisted on excluding 'dishonestly” and adding the term “impede` to the phrase “subvert or under mine.`The District Court agreed over petitioner's objecoons . and the pry was told to convict if it found petitioner intended to “subvert undermine, or impede' governmental fact-finding by suggesting to its employees that they enforce the document retention policy. These changes were significant. No longer was any type of “dishonesty” necessary to a finding of guilt, and it was enough for petitioner to have simply “impeded” the Government's factfinding ability. As the Government conceded at oral argument, “impede” has broader connotations than “subvert” or even “under-mine,” and many of these connotations do not incorporate any “corruptness” at all. The dictionary defines “impede” as “to interfere with or get in the way of the progress of” or “hold up” or “detract from.” By definition, anyone who innocently persuades another to withhold information from the Government gets in the way of the progress of the Government. With regard to such innocent conduct, the “corruptly” instructions did no limiting work whatsoever. The instructions also were infirm for another reason. They led the jury to believe that it did not have to find any nexus between the “persuasion” to destroy documents and any particular proceeding. In resisting
any type of nexus element, the Government relics heavily on § 1512(01 II. which states that an official proceeding “need not be pending or about to be instituted at the time of the offense.” It is, how-ever, one thing to say that a proceeding “need not be pending or about to be instituted at the time of the offense,” and quite another to say a proceeding need not even be foreseen. A “knowingly … corrupt persauder” cannot be someone who persuades others to shred documents under a document retention policy when he does not have in contemplation any particular official proceeding in which those documents might be material…. For these reasons, the jury instructions here were flawed in important respects. The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
Reversed and remanded.
Case Question
1. With respect to the intent of Arthur Andersen, what was the trial judge's instruction to the jury?
2. What are the conclusions of the trial court, court of appeals, and Supreme Court?
3. Why is the concept of conscious wrongdoing important to the Supreme Court?
 

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