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Justices Overturn Andersen Conviction

Richter said prosecutors continue to examine the decision and will "determine whether to retry the case."

But legal analysts said that is unlikely, given the constitutional prohibition against double jeopardy and the tougher standard of proof required by yesterday's decision.

"It would be 10 times harder with a jury instruction that you must show evil intent," said Paul Kamenar, senior executive counsel for the conservative Washington Legal Foundation, which supported Andersen in the case.

One possible beneficiary of the decision is former investment banker Frank P. Quattrone, who was convicted last year on similar charges of ordering document destruction to thwart investigations in 2000.

It may also affect the conviction of David B. Duncan, the Andersen partner who pleaded guilty to a single count of obstructing justice in April 2002, under the government's interpretation of the law, then testified against his former firm. Duncan is a likely witness in upcoming Enron criminal trials, and he will not be sentenced until his government cooperation has ended.

Andersen was in charge of auditing the books at Enron, the high-flying Houston energy conglomerate whose financial meltdown in fall 2001 wiped out the savings of thousands of employees and other small investors -- and politically damaged the Bush administration, with which Enron Chairman Kenneth L. Lay had been close.

As Enron's collapse became public, Nancy Temple, a lawyer for Andersen, sent an e-mail on Oct. 19, 2001, reminding employees of the company's policy of routine document shredding. Two tons of documents were destroyed until the SEC formally notified Andersen on Nov. 9, 2001, that it was under investigation.

In prosecuting Andersen, the government argued that the shredding was done to prevent the SEC from finding out about such matters as Andersen's role in helping Enron puff up the reported returns of "off balance sheet" activities by units known as "Raptors."

Thus, the government argued, the firm violated a federal law that made it a crime to "corruptly persuade" anyone to cover up evidence. At oral argument in the Supreme Court, a Justice Department lawyer likened Andersen to a felon wiping his fingerprints at a crime scene.

But in his opinion yesterday, Rehnquist suggested that the company was more akin to "a mother who suggests to her son that he invoke his right against compelled self-incrimination."

It "is not inherently malign" to persuade someone to withhold documents from the government, but that is what the government asserted with respect to Andersen's conduct, Rehnquist wrote.

The case is Arthur Andersen LLP v. United States , No. 04-368.

Staff writer Carrie Johnson contributed to this report.


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