Supreme Court Hears Andersen Appeal

In an attempt to clear its ruined name, Arthur Andersen LLP made its plea to the Supreme Court Wednesday for a reversal of the firm's 2002 conviction for obstruction of justice in the Enron Corp. case.

The formerly venerable accounting firm, destroyed after it was found guilty for its role in the December 2001 implosion of the now infamous energy company -- Andersen's largest client -- argued that its conviction should be reversed because of improper jury instructions.

"A reversal of the lower court rulings would be tremendously significant for the ongoing business of Arthur Andersen and to the tens of thousands of former employees and partners of the firm, as well as for businesses and individuals across the country affected by the important legal issues under consideration," Andersen spokesman Patrick Dorton said in a statement issued Wednesday after the hearing.

At issue is whether the firm committed witness tampering when an Andersen attorney reminded employees of the company's document retention policy, leading to the shredding of two tons of Enron-related documents as it faced a possible Securities and Exchange Commission investigation.

After Andersen's conviction by a Houston jury, a federal appeals court upheld the decision and ruled in favor of the government.

Andersen has had help in its efforts to overturn the conviction from organizations such as the U.S. Chamber of Commerce and the National Association of Criminal Defense Lawyers, which both filed amicus briefs in the case.

"If the decision in this case is not reversed ... businesses of all types and sizes 'will be forced to act at their peril in making what had been routine business decisions, such as those related to document retention policies,'" the statement continued, quoting one of those briefs.

"We continue to believe strongly that the criminal prosecution of a firm of 28,000 people was unjustified and the ensuing collapse of Arthur Andersen was an undeserved tragedy -- for its employees, clients and the business community at large," the firm said.

The Justice Department, meanwhile, defended its prosecution of the firm. Deputy solicitor general Michael Dreeben told the court that the firm's document shredding was the corporate equivalent of "wiping down the crime scene before the police get there," the Associated Press reported.

A decision is reportedly expected before the court recesses for the summer in late June.

Earlier this week, Andersen agreed to pay $65 million to settle a class-action lawsuit brought by WorldCom Inc. investors, who alleged that the audit firm failed to protect them by not uncovering the $11 billion fraud at the telecommunications company. The firm also agreed to pay investors 20 percent of any remaining capital that it intends to distribute to its partners, and to pay the difference between the $65 million and any larger settlement in any other lawsuit it may settle in the future.