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It may be too late to help Arthur Andersen itself, but the crippled accounting firm appeared Wednesday to have won key support on the Supreme Court for its challenge to the law that led to its post-Enron collapse. Several justices seemed unsympathetic to the Justice Department’s argument that Andersen violated a federal witness-tampering statute when one of its lawyers reminded employees about its document retention policy in October 2001, just before the spreading Enron scandal enveloped Andersen, Enron’s accounting firm. The law makes it a crime to “corruptly persuade” others to destroy documents to make them unavailable for an official proceeding. The government’s interpretation of the law, advanced in the case Arthur Andersen v. United States, has corporate legal departments concerned that routine advice and standard policies about document retention will be criminalized. The prosecution of Andersen led to its virtual demise: The firm shrank from 28,000 employees to several hundred. The company was fined $500,000. The U.S. Court of Appeals for the 5th Circuit upheld the verdict and the jury instruction about the meaning of the law, setting the stage for high court review. No Andersen officials were ever prosecuted for violating securities laws. Andersen’s lawyer Maureen Mahoney, head of Latham & Watkins’ appellate and constitutional practice, hammered the point that under long-standing Court precedent, the actual destruction of documents without knowledge of a pending proceeding is legal. But under the government’s definition of “corruptly persuade,” she said, telling someone else to destroy the same documents would be a crime. Responding to a hypothetical about an individual shredding documents in advance of a tax audit, offered by Justice Anthony Kennedy, Mahoney said, “If he did it himself, it’s not a crime, but if he tells his wife to do it, he goes to jail for 10 years.” Since document policies by nature result in some papers being destroyed and made unavailable, virtually all are “fatally doomed” under the government’s theory, Mahoney said. She noted that even agents of the Federal Bureau of Investigation routinely throw out their interview notes, even though defendants “would love to have them.” Mahoney faced relatively light questioning, but her arguments framed the heavier barrage aimed at Deputy Solicitor General Michael Dreeben. Under repeated questioning from Justices Sandra Day O’Connor and Antonin Scalia, Dreeben acknowledged that the document shredding that followed the Andersen reminder was not itself illegal. “The doing of it is OK,” Scalia said, referring to the document destruction, even though the reminder was a crime. “That is weird.” Kennedy said that the government’s interpretation was a “sweeping” policy that would “cause trouble for every company.” O’Connor too fretted about the impact on small businesses and on lawyers who advise companies. “How is a person supposed to know what do to? How is a lawyer supposed to know?” she asked. Dreeben said it was clear that the witness tampering law is violated when someone suggests destroying documents at a time when there is a “reasonable possibility of an investigation.” In the case of the Andersen firm, Dreeben said that at the time the reminder was sent out, it was obvious that an investigation by the Securities and Exchange Commission was “coming down the pike.” He added sarcastically that the reason the reminder was sent out “wasn’t because the company was suddenly preoccupied with neatness.” Dreeben compared Andersen’s actions to “wiping down the fingerprints” at a crime scene before the police arrived. Kennedy seemed unconvinced, suggesting that other companies might have done the same thing. “No other company would do this,” Dreeben replied sharply.

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