Posted 11:28 AM by Robert

The Madness Of The Enron Dance II

A larger sense of Kurt Eichenwald's (and the Times') seriously unbalanced state of mind on Enron matters can be found in these passages from his article:

After yesterday's Supreme Court reversal of Arthur Andersen's conviction for obstruction of justice in the Enron case, there were rumblings among former Andersen partners and some legal analysts that this was the proof that the accounting firm should never have been indicted, much less found guilty. ...[T]he reversal makes a retrial legally feasible, though unlikely ... [T]he Supreme Court is essentially arguing, there is no way the appellate courts could know if the Andersen jury cleared the analytical hurdles necessary to conclude that the firm was guilty. None of that, legal experts said, means that the Supreme Court ruling has cleared Arthur Andersen or demonstrated anything about whether it should have been indicted.

But for all that, the latest development in Andersen's case is obviously strong evidence of innocence. Why would the government have insisted on obtaining obviously rancid jury instructions thereby exposing the conviction to the obvious huge risk of the reversal that has now occurred to the prosecutors' huge embarrassment? Isn't it obvious that the prosecutors probably did that because they were very much concerned that they could not have obtained the conviction if the jury instructions had been correct? And isn't it equally obvious that a prosecutor should not indict a defendant which had not intended to engage in wrongdoing? The Justice Department should not be spending resources indicting defendants who had not intended to engage in wrongdoing, in this case or almost ever. The class of crimes not including a factor of "wrongful intent" (or something amounting to wrongful intent) worthy of indictment is tiny.

What about his assertion that "the Supreme Court ruling has [not] cleared Arthur Andersen or demonstrated anything about whether it should have been indicted?" Literally, what Mr. Eichenwald writes is technically correct. But it is also tendentious and highly misleading. For example, consider the fact that is also and equally true that the Supreme Court ruling has not cleared Mr. Eichenwald or demonstrated anything about whether he should be indicted.

And, if there is a re-trial of Andersen and the firm is acquitted, it will literally and equally be true that the "not guilty" verdict will not "clear" Arthur Andersen or demonstrate anything about whether it should have been indicted. A "not guilty" verdict simply means that the government was not able to demonstrate guilt beyond a reasonable doubt in the eyes of that jury. Such a result doesn't "clear" the defendant - consider O.J. Simpson - or demonstrate anything about whether the defendant should have been indicted.

What is utterly missing from Mr. Eichenwald's considerations is the essential element of the presumption of innocence. It is the presumption of innocence that "clears" Mr. Eichenwald of every crime of which he has not been duly convicted - and it is that same presumption of innocence that clears Andersen of every crime of which it has not been convicted, including every single crime for which it was indicted in this case. In this country we don't properly ask a defendant for the proof that the [defendant] should never have been indicted, much less found guilty. We rely on the presumption of innocence for that kind of thing. And we do that because hundreds of years of experience have demonstrated to every non-hysterical mind that it is by far the best course of action, even though a criminal trial almost never "clears" the defendant.

The Supreme Court is "essentially arguing?" No, the Supreme Court is not "essentially arguing" anything. The Supreme Court held as a matter of law that the Andersen jury instructions did not comply with existing law.

And what the heck is to be made of Mr. Eichenwald's unexplained crack that "the reversal makes a retrial legally feasible, though unlikely." Isn't this an important case? Doesn't it stand for a principle much bigger than its narrow facts? Of course it is important, of course the Justice Department, the SEC and corporate regulators generally have a lot at stake, and of course this case stands for principles much bigger than its narrow facts.

The real reason that "retrial [is] legally feasible, though unlikely" is that if the jury instructions are fixed for a retrial then Andersen's conviction is legally feasible, though unlikely.