Posted 10:49 PM by Robert

Convicting Andersen By Calculus?

A front page story in the Wall Street Journal [link requires paid subscription] details how the government's criminal case against Andersen for "obstruction of justice" has changed, in the Journal's words, from a "slam dunk" to a "Hail Mary."

The Journal story notes:

"[I]t's far from clear that the prosecutors have cleared the legal hurdles necessary to convince a jury. According to the 15 pages of instructions drafted by U.S. District Judge Melinda Harmon but not yet delivered to jurors, the panel will have to answer this specific question: Did at least one "agent" of Andersen -- either a partner, officer or employee -- try to "corruptly persuade" another person to keep a document from being available 'for use in an official proceeding?'"

"For these purposes, 'corruptly' means acting with an 'improper purpose,' such as 'an intent to subvert or undermine the fact-finding ability of an official proceeding.' The proceedings at issue are the informal and formal investigations by the SEC; lawsuits by private litigants don't count. The jury needs just one person who did all those things to merit a conviction, be it a low-level clerk or a top partner. And the government doesn't have to prove the SEC had even started its proceedings or issued any subpoenas yet."

"Prosecutors have fingered four alleged 'corrupt persuaders': Mr. [David] Duncan, [the Andersen partner who has pleaded guilty and become a government witness], Andersen attorney Nancy Temple, and Houston partners Thomas Bauer and Michael Odom. ... "

"The Justice Department is hoping to secure an Andersen conviction as a building block toward indictments of former Enron executives, whose cases could prove far more complex to prosecute."

The Journal goes on to describe just how weak the cases the government has been able to present are with respect to each of these four "fingered" individuals (none of whom is actually a defendant in the trial). Since the prosecutors must prove guilt beyond a reasonable doubt, the weakness of the cases against the four individuals is striking. The evidence against Ms. Temple, for example, seems to amount to the fact that she urged people working within Andersen on the Enron matter to comply with Andersen's document retention policy - a policy which by its terms did not allow destruction of documents to impede an investigation - and the following:

"Ms. Temple discussed the situation with her boss and the firm's litigation director. Her handwritten notes of their Oct. 9 phone call say, "Highly probable some SEC inquiry." She also wrote that the firm probably could be charged with violating an order it signed that year to settle a civil-fraud suit by the SEC over its audits for Waste Management Inc."

Does that amount to proof beyond a reasonable doubt that Ms. Temple was a "corrupt persuader?" The reader is invited to evaluate that for herself - but it does not even seem close to me.

The cases against all of the "fingered" individuals are so weak that one might get the impression that the prosecutors are trying to obtain a conviction of Andersen by proving something subtly less than the law requires. Specifically, the prosecutors seems to be trying to prove beyond a reasonable doubt that one of the four fingered individuals must have been a "corrupt persuader" instead of proving that a particular fingered individual was a "corrupt persuader" beyond a reasonable doubt.

The above distinction is likely confusing to many people, but an example may make it clear. Suppose "reasonable doubt" means - solely for the sake of the example - less than 10% chance of innocence. To obtain a conviction of Andersen, the law requires that the prosecutors prove that there is less than a 10% chance that a particular fingered individual (say, Ms. Temple) was not a "corrupt persuader." Thus, if the prosecutors can show only that there is more than a 50% chance that each of the fingered individuals was a "corrupt persuader," then Andersen is supposed to be acquitted.

But if the prosecutors can show that there is at least a 50% chance that each of the fingered individuals was a "corrupt persuader," and one assumes the probabilities are independent, then the chance that at least one of the fingered individuals was a "corrupt persuader" is less than 10%. In fact, it is less than (.5) X (.5) X (.5) X (.5) = .625 = 6.25%.

"Reasonable doubt" is NOT legally defined in terms of percentages and statistics. But in many ways "reasonable doubt" and other legal standards of proof behave as if they were defined that way. For example, the now-famous memorandum of FBI Agent Rowley says: "I thought probable cause existed ("probable cause" meaning that the proposition has to be more likely than not, or if quantified, a 51% likelihood). "Probable cause" is NOT defined as a 51% likelihood - but Agent Rowley's observation is helpful and common. Similarly, "reasonable doubt" is sometimes described informally (and NOT legally) as "less than a 10% (or 5%) chance of innocence." More to the point: in a juror's mind the "reasonable doubt" standard can often act in a way similar to its statistically defined pseudo-twin (that is, "less than a 10% (or 5%) chance of innocence)."

The instructions have not yet been read to the jury. Before that happens, the Andersen attorneys had better make sure that the instructions do NOT ask the jury to decide beyond a reasonable doubt: "Did at least one 'agent' of Andersen -- either a partner, officer or employee -- try to 'corruptly persuade' another person to keep a document from being available 'for use in an official proceeding?" THAT question completely obscures the distinction described above - and opens the door to an improper conviction. Which may be exactly what the prosecutors have been reduced to relying on.