Andersen guilty in obstruction of justice trial

 

A federal jury today found accounting firm Andersen guilty of obstructing justice in an investigation of its client, Enron Corp., making the once-venerated auditor's demise almost certain. The 12-member jury, which heard nearly five weeks of testimony before US District Judge Melinda Harmon, found Andersen criminally intended to keep Enron audit records away from a US Securities and Exchange Commission inquiry.

A key ruling yesterday by the judge appeared to break a logjam that had kept the jury from reaching a verdict for more than a week. In a ruling welcomed by the prosecution, Judge Harmon ruled the 12 members of the jury need not agree that the same Andersen employee illegally persuaded others to shred Enron records in order to find the entire partnership guilty.

The panel returned its verdict on the tenth day of deliberations. The jury on the seventh day told the judge they were deadlocked and she read them a standard instruction, called the "dynamite" charge, that was designed to break the deadlock.

The verdict means Andersen can no longer audit publicly traded companies, and could now face fines of up to twice the amount of economic harm the judge determines its actions caused.

Although no one will go to jail, Andersen still faces a mountain of lawsuits and possible civil punishment. Few expect the partnership to survive in any real form.