Sunday, May 26, 2002

Andersen: Judge Harmon's jury instructions  . . . taketh away . . . and giveth To make its case against the firm, the government must prove that an Andersen employee, as part of his work, intentionally and "corruptly" persuaded others to shred in order to keep the information from the Securities and Exchange Commission investigators. The judge said she will tell jurors "corruptly " means the fairly bland but legally accepted, "with an improper purpose." Andersen had hoped she'd put the bar a little higher and say something like, the Andersen employee had to use unlawful means such as bribery to get the shredders going. The judge also ruled that the SEC's preliminary investigation into Enron financial fraud is the kind of official proceeding this document destruction law targets. She'll not include a ruling Andersen wanted that could leave the question more open to juror debate. But prosecutors didn't get everything on their wish list either. As long as Andersen lawyers don't object to a prosecutorial final argument saying "the firm knew" various things, the judge has agreed to deny the prosecutors' request that jurors be told that if anyone in the firm knew something, the whole company is assumed to have known it. [Houston Chronicle] This last issue regarding the "firm's knowledge" is significant.  The government in corporate prosecutions, such as Andersen, usually tries to rely on the "collective knowledge" doctrine which says a business entity is assumed to have knowledge for criminal liability purposes of all the facts individually known by its employees.  In other words, if the crime in Andersen required (1) knowledge of a government investigation and (2) shredding documents, the collective knowledge doctrine would allow a manager in Houston to "know of the investigation" while a worker in New York shredded relevant documents (without knowledge of the investigation) -- neither individual has the necessary knowledge to be charged with a crime, but the business entity could be found guilty Needless to say, Judge Harmon's refusal on the "collective knowledge" front is an important break for Andersen. 7:39:26 PM    comment [] Why do jury instructions matter ? "Whether the jury can conclude that Andersen employees destroyed documents last fall in an attempt to hinder an investigation by the Securities and Exchange Commission is likely to depend on how the judge defines the intent that makes the act criminal." [NYTimes] Many outside observers of criminal jury trials do not understand the impact that a judge's instructions have on the jury in a case like Andersen.  The jurors have already heard a lot about shredding and deleting but whether those acts rise to the level of obsruction of justice remains to be seen.  The jury instructions will explain to the twelve jurors what they should and should not consider in reaching a verdict and what standards to apply.  These instructions will also be critical as the prosecution and defense lawyers craft their closing arguments.  The indictment is set in stone but the meaning of its terms remains to be defined  . . . stay tuned.  7:18:07 PM    comment [] Andersen Update: Prosecutors throw it up against the wall and see if it sticks . . . From the Houston Chronicle's on-going coverage of the Andersen trial: Nearly all the e-mails reviewed were documents that had been deleted and recovered, according to FBI Special Agent Paula Schanzle. She testified Andersen employees deleted 29,250 e-mails in October, and 26 trunks of paperwork were shipped off. On cross-examination, which is scheduled to continue Monday, Schanzle acknowledged she didn't review the information in many of the e-mails and the FBI was unaware when most of them were deleted. "If you can't tell us what was deleted and you can't tell us when, what are we supposed to conclude from 29,250 deleted e-mails?" asked defense attorney Rusty Hardin.  [Prosecutor's Put Finishing Touches on Andersen Case - Houston Chronicle.com] This is not an uncommon prosecution tactic.  To put facts out there that sound unsavory and to push that view on the jury, despite knowing the facts standing alone mean little.  This often happens in a case where the government seeks to put on "lifestyle" evidence about wealth etc. in a never-admitted (but usually obvious) effort to smear the defendant in the eyes of the jury.  Hardin's point is well taken.  Why does the deletion of e-mails matter unless the government can show a relationship of those e-mails to Enron.  I guess I should be mindful of this when deleting spam e-mail  . . . be careful out there!   11:00:36 AM    comment []

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