Three years after the guilty verdict that effectively destroyed the firm, the Supreme Court has overturned the conviction of Arthur Andersen for shredding documents related to its audits of energy giant Enron Corp.

In a unanimous opinion issued in late May, Supreme Court justices said that the former Big Five firm's June 2002 conviction on a single charge of obstruction was improper.

"We hold that the jury instructions failed to convey properly the elements of a 'corrup[t] persuas[ion]' conviction ... and therefore reverse," Chief Justice Rehnquist wrote.

A Houston jury had found the former Big Five firm, once the nation's largest public accounting firm, guilty for instructing employees to destroy Enron-related documents pursuant to its document retention policy in October of 2001, as a Securities and Exchange Commission investigation looked likely. A Court of Appeals for the Fifth Circuit later upheld.

Enron filed for bankruptcy in December 2001. Andersen shuttered its audit practice in August of 2002.

"The Department of Justice is disappointed in today's decision by the U.S. Supreme Court regarding jury instructions given in the case, but of course we respect the Court's decision," said acting assistant attorney general John C. Richter. "The Justice Department's decision to charge Arthur Andersen was based at the time on the determination that the substantial destruction of documents in anticipation of an investigation by the SEC violated the law. We remain convinced that even the most powerful corporations have the responsibility of adhering to the rule of law."

"We will carefully examine today's decision and determine whether to re-try the case," he concluded.

Reacting to the news, Toby Bishop, a former Andersen partner who is now president and chief executive of the Association of Certified Fraud Examiners, in Austin, said that the decision "will provide a little comfort to the vast majority of Andersen's 29,000 former U.S. personnel who lost their jobs unnecessarily."

"Unfortunately, this Pyrrhic victory won't bring back the health care coverage or pension payments to those Andersen retirees who lost everything they were owed by the firm," said Bishop, who worked for nearly 20 years at Andersen, serving as partner-in-charge of fraud research and development.

"I've always thought that, while Andersen's prosecutor had the right to indict the whole firm, he also had a moral duty not to harm tens of thousands of innocent people," he said. "I hope this lesson will be learned so that corporate fraud can be prosecuted vigorously without causing undue suffering to innocent employees."

Rehnquist said that the justices' attention in this case "focused on what it means to 'knowingly ... corruptly persuad[e]' another person 'with intent to ... cause' that person to 'withhold' documents from, or 'alter' documents for use in, an 'official proceeding.'"

He wrote, "The jury instructions at issue simply failed to convey the requisite consciousness of wrongdoing. Indeed, it is striking how little culpability the instructions required."

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