Wednesday, June 01, 2005

Legal?: yet to be decided, but no question on shamefulness

The Supreme Court made a ruling in Andersen's favor on a pure legal question: The court held that the trial judge's instructions to the jury failed to require the necessary proof that Andersen knew its actions were wrong. As the law is written, the judges had no choice but to rule the way they did.

However, there is a larger issue that this blog deals with; the shame that society should direct at individuals that fail to take the opportunity to do the right thing. Pork barrel spendindg is just one example of this. So was the 'wink-wink, see no evil here' suggestion for the destruction of documents by Andersen lawyer Nancy Temple (picture) (see October 12, 2001 entry in Timeline of the Enron scandal).

Ms. Temple's Congressional testimony is very telling of her moral character. Reading it begs the question: if she had a fiduciary responsibility to her client and "there was a possibility of litigation" why does she not start directing her efforts to start gathering as much information as possible to determine the extent of culpability or exoneration; preserving rather than destroying information?

Ms. Temple's actions may yet be determined illegal by a future jury. Nevertheless, they were not moral. At a minimum she should be scorned and disbared (See recommendation #7 from this Senate testimony to the Judiciary Committee by Prof. Susan P. Koniak in which the most important question is posed; "...where were the lawyers?")

The salient excerpt from Ms. Temple's Congressional testimony follows:


Ms. DeGette: Now, at that time, Arthur Andersen had not been served with a subpoena as of October 12. Correct?

Ms. Temple: Correct.

Ms. DeGette: And there is some sense, I think everybody here will agree, that there was probably some concern about pending litigation as of that time. Right?

Ms. Temple: To the best of my recollection, I don’t recall

Ms. DeGette: Well, you knew that there were probably – that there was a sense there might be lawsuits; I mean, really, didn’t you?

Ms. Temple: I don’t recall that being a focus of discussion or –

Ms. DeGette: I don’t want to talk about a focus of discussion. I mean, you’re a Harvard-trained lawyer. You’re a litigator. You’re an SEC expert, all of the things we’ve been talking to. You knew there might be a risk of litigation didn’t you?

Ms. Temple: I knew there was a possibility of litigation –

Ms. DeGette: Thank you.

Ms. Temple: [continuing] but we did not discuss it.

The Supreme Court's ruling itself notes the following:
...On October 8, petitioner retained outside counsel to represent it in any litigation that might arise from the Enron matter. The next day, Temple discussed Enron with other in-house counsel. Her notes from that meeting reflect that "some SEC investigation" is "highly probable."

This specific reference in the decision that Ms. Temple knew about a probable investigation (on Oct. 8) before she sent out the email (on Oct. 12) is a gift to the prosecution. Is it possible that all that is needed at this point is to have a re-trial with accurate jury instructions that point to this evidence?


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