I Guess Ignorance of the Law Actually is A Defense
I have to say I was really surprised at the Supreme Court’s unanimous decision to overturn the conviction of Arthur Anderson for obstruction of justice in the Enron investigation. Anderson’s defense was that they started shredding documents because they thought there might be an upcoming SEC investigation; the announcement that there was, in fact, going to be an investigation did not come until several weeks later.
According to the NYT:
White-collar cases are not akin to – and are, in fact, often the opposite of – trials involving murder or bank robbery, where everyone usually acknowledges that a crime took place and merely debate the culpability of a particular defendant….That is because a potential fraud or obstruction of justice is only illegal if the defendant acted with the knowledge and intent to commit a crime.
According to the ever-impartial Times, “In truth, it is hard to argue with the law’s logic: no one should be locked away in prison as punishment for making a business misjudgment.”
Hard to argue? Well, oddly, that judgment was unanimously upheld by the 5th Circuit Court of Appeals, the most heavily Republican-loaded Circuit Court in the country to which Pricilla Owen was just confirmed (now with 4 Democratic appointees and 12 Republican):
The jury based their conviction on evidence that senior Andersen employees told coworkers to expect an SEC investigation. See id. at 298. Andersen argues that the correct instruction would indicate that concern about possible future proceedings is not enough, and that it did not know of the SEC investigation when the destruction took place. See id. The Fifth Circuit stated that “ignorance of the law is no defense,” and concluded that Congress would have specified if a narrower standard were to apply in obstruction of justice crimes. See id. at 299.
The Fifth Circuit unanimously affirmed the conviction, rejecting Andersen’s arguments and characterizing the firm as a member of Enron’s “supporting cast,” which fell in the wake of Enron’s collapse “[l]ike a falling giant redwood.” See id. at 284.
The WaPo speculates that with this decision, the Supreme Court is expressing concern about Sarbanes-Oxley, the 2002 law that made it easier for government to prosecute wrongful document destruction. Well, that’s great. Just great.
It’s hard to see anything good coming out of it — most legal analysts agree that although the government could retry the case, it’s unlikely given prohibitions against double jeopardy and the tougher standard of proof demanded as a result of the Supreme Court’s decision.
I’m not a lawyer, so maybe someone can explain to me how “ignorance is no defense” not being applicable to white collar crime is anything other than a selective class-based application of the law. It looks like the Enron Pack are going to skate. I guess it truly does pay to have friends in high places.