Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The U.S. Supreme Court’s decision earlier this month to review Arthur Andersen LLP’s criminal conviction for destroying internal documents relating to its audits of Enron was both surprising and welcome. It was surprising because, as the government argued in its brief in opposition to certiorari, Congress in the Sarbanes-Oxley legislation enacted a new document-destruction provision (21 U.S.C. 1519) that as a practical matter is likely to be the vehicle for future federal prosecutions of document destruction. Since Andersen was prosecuted under a pre-Sarbanes-Oxley statute (21 U.S.C. 1512), the government concluded that the issues raised by the Andersen prosecution have “little continuing practical importance.” The high court obviously disagreed. The decision to review the Andersen conviction is welcome because the federal criminal statutes that apply to destruction of corporate documents are a mess. What is worse, these statutes have been interpreted by some lower courts to permit the federal government to prosecute, and a jury to convict, for conduct that many reasonable lawyers and business people would not regard as criminal. The new Sarbanes-Oxley document destruction provision, � 1519, is so broad and vague that the prudent corporate manager today might be well advised to avoid even wistful glances at the delete key on the computer keyboard. Violating this new provision, whatever it means, carries a jaw-dropping penalty of 20 years’ imprisonment. By way of comparison, you get only 10 years for physically assaulting the president of the United States. Congress apparently regards document destruction as twice as bad as appearing at a Rose Garden ceremony with a baseball bat in hand and a malevolent glint in one’s eye. Arthur Andersen was prosecuted in 2002 (before the enactment of Sarbanes-Oxley) on a single count of violating the “omnibus clause” of � 1512, which prohibits a person from “corruptly persuading” another person with the intent of causing that person to alter or destroy a document so as to make it unavailable “for use in an official proceeding.” Andersen had hurriedly discarded voluminous documents concerning its audit of Enron, ceasing to do so only when Andersen received a subpoena from the Securities and Exchange Commission (SEC). At the time that Andersen was discarding these documents, it knew that some type of SEC investigation was likely, but there had been no official notice from the SEC to Andersen that a formal investigation was under way. The government has never charged Andersen or any of its partners with securities fraud or any other crime related to the quality of Andersen’s audits of Enron. The first question the Supreme Court faces is how to interpret the “corruptly persuading” element of this less-than-pellucid statute. The trial court instructed the jury that “corruptly” meant “having an improper purpose” to subvert the “fact-finding ability of an official proceeding.” Andersen argues that “corruptly” must be interpreted to mean conscious wrongdoing. Since � 1512 separately requires an intent to make a document unavailable for use in an official proceeding, Andersen says “corruptly” adds nothing to the statute if it is defined merely as the improper purpose of making the document unavailable. (Even the 5th U.S. Circuit Court of Appeals, in approving the district court’s instruction in the case, appears to have conceded there is a bit of “circularity” in equating “corruptly” with the improper purpose of withholding a document.) The second question for the court is how to interpret the “official proceeding” element. Section 1512 provides that the “official proceeding” need not be pending or “about to be instituted” at the time the documents are discarded. Andersen, however, sought an instruction that the “official proceeding” must be a “particular” proceeding that is at least “scheduled,” and it argues that the jury might well not have convicted if given this instruction. The government responds that the statute says nothing about a “particular” proceeding, and that “scheduled” is inconsistent with the statute’s provision that the proceeding need not be “about to be instituted.” These issues also matter to Frank Quattrone, who, like Andersen, was convicted under � 1512 (and other obstruction statutes) for advising his staff-in a single e-mail-to comply with a corporate document-retention program. (Quattrone’s appeal is pending in the 2d Circuit.) Still, why would the Supreme Court take the Andersen case when Congress has since enacted a sweeping new statute governing document destruction (� 1519), and when the government has advised the court that, in the future, it plans to prosecute these cases under the new statute rather than under � 1512? Reasonable limits would help It would be good if the answer is that the court is interested in setting reasonable limits on prosecutions for document destruction. No doubt there are instances of hard-core criminal intent involving destruction of documents that have been sought in a government investigation. Other cases, however, in particular those where a large organization is following a document-retention plan, are far less clear-cut in terms of criminal intent. The court should rule that document destruction can be criminal only where traditional mens rea is shown beyond a reasonable doubt. James Dabney Miller is a partner in the Washington office of King & Spalding.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.