Having advised its Enron team to comply with its document “retention” policy in the face of Government and other investigation, Arthur Andersen was convicted of obstruction of justice, under 18 U.S.C. 1512(b)(2), which makes it unlawful to knowingly use intimidation or physical force, threaten, or corruptly persuade another person withhold testimony, or withhold a record, document, or other object, from an official proceeding, or to alter, destroy, mutilate, or conceal an object with intent to impair the object’s integrity or availability for use in an official proceeding. The Court held that the jury instructions – which advised the jury to convict if it found petitioner intended to “subvert, undermine, or impede” governmental factfinding by suggesting to its employees that they enforce the document retention policy, and further instructed that “even if defendant honestly and sincerely believed that its conduct was lawful, you may find defendant guilty” – did not sufficiently compel the scienter requirement that such conduct be “knowingly” or that such persuasion be done “corruptly”. While this holding may be warranted, there is dicta in the Court’s decision which will undoubtedly be cited by corporations and others to justify spoliation, and/or seeking to avoid responsibility for same. Curiously, Chief Justice Rehnquist, writing for the Court, appears to analogize Arthur Andersen’s intentional destruction even after the SEC opened a formal investigation and requested accounting documents with a mother’ suggestion that her son invoke his Fifth Amendment rights against self-incrimination. “‘Document retention policies,’ which are created in part to keep certain information from getting into the hands of others, including the Government” the Court wrote, “are common in business…. It is, of course, not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances.” Arthur Andersen LLP v. United States, No. 04-368, 2005 U.S. LEXIS 4348 (May 31, 2005).
0 Comments