Once, after a particularly rough football game between my high school and our archrival, I spotted our coach glumly sauntering into the locker room.
I thought his manner was out of sorts for a coach who had just handed a major-league ass-kicking to our most hated opponent. When I inquired as to why he looked like he had just received a pink slip, he told me that our all-county quarterback had broken a bone in his throwing hand and that our star linebacker had shredded his knee trying to stop a sweep.
He said it was nothing more than a Pyrrhic victory, regardless of the opponent.
I nodded in agreement, clueless as to what the term meant. When I looked it up that evening, I learned that it referred to King Pyrrhus of Epirus, who, despite defeating the Romans at Asculum in 279 B.C., lost his best officers and many of his troops. He was then supposed to have said, "Another such victory and we are lost."
I'll wager that many former employees of Arthur Andersen have a similar feeling as my forlorn coach. Unfortunately, it took the nation's highest court to overturn the three-year-old obstruction of justice conviction for the firm's part in shredding Enron audit documents, which basically served as a death sentence for the 90-year-old firm.
The high court ruled that the trial judge's instructions to the jury failed to require the necessary proof that Andersen knew its actions were wrong.
Nevertheless, despite the visceral vindication, the ruling may replace King Pyrrhus as the 21st century definition of a Pyrrhic win in any dictionary.
The firm, which once had 28,000 employees and was known as the gold standard among auditors, operates on a skeletal staff of roughly 200, who, according to reports, deal with myriad administrative chores and any remaining lawsuits lodged against the firm. It will never be able to resurrect itself as a viable auditing entity, nor can it recover the losses inflicted upon the company or recoup the millions in partner investments that were obliterated.
The trial lasted some 10 days in a Houston courtroom and nearly resulted in a hung jury, save for instructions by Judge Melinda Harmon that the Supreme Court now labels as faulty and set too low to warrant a verdict of that magnitude.
The implosion of a once-revered auditing firm from the actions of an infamous few seems as grossly unfair now, even after the high court ruling, as it did the day the guilty verdict was announced. For instance, how many of Andersen's nearly 30,000 employees ever saw or took part in preparing the workpapers for the Enron audit?
I'm not a legal expert on white-collar crime, but the reversal by the high court does beg the question of future cases involving accounting and corporate malfeasance.
Would or could the ruling make it tougher for prosecutors to pursue future obstruction of justice cases, or in applications for violations of Sarbanes-Oxley, which promised to mete out tough punishment for the deliberate destruction of documents? I don't know, but I'm sure there are nearly 30,000 of you who could surely render an opinion.
