Monday, June 20, 2005

Re: All the Supreme Court Justices, Whether Liberal Or Conservative, Have Promoted Gross Dishonesty

June 20, 2005

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Re: All the Supreme Court Justices, Whether Liberal Or Conservative, Have Promoted Gross Dishonesty.
From: Dean Lawrence R. Velvel
VelvelOnNationalAffairs.com

Dear Colleagues:

About a month ago, in response to a blog, Professor Anthony D’Amato of the Northwestern University Law School sent me a question. It amounted, I thought, to asking what I would do if I were king, or God. Subsequent email correspondence with Tony indicates that my interpretation of his question may have been too broad, but, as they say, it was what it was. So, thinking of the question in the broadest terms, I recently included the following answer in an email to Tony:

"I haven’t forgotten your question, but rather have been ruminating on it. In all honesty the sweep of the question is too broad for my poor mind. The more I think on it, the more I come up with only a very simple response. Because I think dishonesty and its twin, secrecy for the purpose of hiding bad stuff, are the fundamental problems we face (major stories seem to stem from these twin reverse-icons every day), I would require an honest and open world. That would, I think, avoid and/or enable us to solve a lot of problems. Also, it would be highly desirable for people to care a little more about others, instead of themselves alone."

There it is: simple and short. Many would say simpleminded and (therefore thankfully) short.

"Upon further rumination" (to borrow in a way from NFL referees), I would probably add one other point to the answer given Tony. It also seems to me to be important that Americans learn at long last -- and in direct contradiction to the Southern mentality that has controlled the country since 1876 -- that war usually does not solve problems, but instead leads only to more problems, such problems sometimes being bigger, longer and deadlier wars. Does anyone who knows history deny this?

But the point I wish to pursue further here is the one about honesty. It shall be combined with the question of the federal courts, particularly the Supreme Court.

The federal courts have been much in the news lately, particularly because conservatives want to ravage them for not being conservative enough. Right wing appointments, impeachment of any judges who are to the left of Genghis Khan, Senate filibusters over nominees, appointment of religious zealots, and so on have been daily fare. Now, I don’t want to intrude upon or spoil this orgy by suggesting that who gets appointed makes little difference because in the long run, and with the exception of the truly historical -- and anomalous and therefore misleading -- period of 1954-1968, courts are almost always conservative. Nor would it be true that who gets appointed will make no difference. For there is conservatism and then there is conservatism -- read right wing wackoism (including Thomasian and Scalian conservatism?). Another 20 or 40 wacko district and appellate appointments like those who have been confirmed in the past few days, or a few Supreme Court appointments like that, could conceivably lead to a constitutional crisis as citizens rebel in some way against right wing insanity imposed by and from the federal bench (acting in a sort of ideologically-far-broader-reprise of the right wing Federalist judges who savaged defendants under the Alien and Sedition Acts at the turn of the nineteenth century). It may be that today gutless Democrats savage Howard Dean for once again saying what is largely true, as Democrats and the press savaged him in his campaign so that he could not win the nomination, and it may also be that gutless Democrats do this while ignoring comments by Garrison Keillor in his new book that make Governor Dean look like Mr. Milquetoast. But this gutlessness is likely to triumph for only so long, is already fraying, and, if and when right wing Bushian judges impose more religion (and less medical research), less abortion, and more Patriot Actism on everyone in the country regardless of how strongly victims disagree with them, the general liberal gutlessness could end in some form of serious eruption. This is not impossible. It has happened before.

So one would go only so far in claiming that who is appointed to the federal bench makes no difference. At some point it can and likely would make a difference. But, on the other hand, one also does not wish to lose sight of the fact that quite often it does seem to make no difference who is on the bench. Put more bluntly in an area this writer cares about very much, gross dishonesty will too often not be punished by the paragons of our federal courts, regardless of who sits on those bodies.

Take the recent Arthur Andersen decision as prime example number one. That is the case in which the Supreme Court overturned the conviction of a morally and legally corrupt accounting firm which had tried to obstruct justice by wholesale destruction of evidence relating to the Enron scandal. The Supreme Court’s decision was unanimous -- whether justices are liberals or conservatives was irrelevant. They all voted to get this corrupt accounting firm off the hook in circumstances which fairly screamed fraud and obstruction of justice.

As can be known by any sensate reader, Arthur Anderson was a company that had morphed from a paragon of the accountant’s art to a firm whose leaders caused it to care about nothing but money. It was deeply involved not just in the Enron scandal, but also in the Waste Management and Sunbeam scandals. When these debacles occurred, Anderson’s new motivating ethic was spread before the world for weeks and months on end in the print and electronic media. Every reader of reasonable newspapers was aware of what a morally and legally crooked outfit it had become. Its new ethic was also described in a book by Barbara Ley Toffler. Toffler had joined it for a few years as a partner after, among other things, teaching at the Harvard Business School and consulting to Fortune 500 corporations. In joining Arthur Anderson she had been motivated by its prior longstanding reputation for "hard work, competence and a steady hand" (p.7), and by admiration for a supposedly still extant ethic summed up by the fact that the "single maxim, ‘Think straight, talk straight,’ was the touchstone of the Firm," whose partners, following the precepts of its Chicago founder, "would say with pride" that it "was a place where integrity mattered more than fees," "where it was better to do the right thing than the easy thing." (Pp. 12-13.) Expecting to have joined a firm founded to be, and long regarded as, a paragon of honor, Toffler instead found a firm that had changed drastically, a firm where making ever more money was the only guideline:

"It had become a place where the mad scramble for fees trumped good judgment."

* * * * *

". . . during the 1990s, something changed. In my years working at Arthur Andersen, I came to believe that the white-shoed accounting firm known for its legions of trained, loyal, honest professionals — a place that once had the respect, envy, and admiration of everyone in Corporate America — had lost its way. The accountants and the consultants forgot what it meant to be accountable."

* * * * *

". . . I also experienced . . . an organization consumed by never-ending financial and political pressures. I worked with people so in thrall to the great bull market of the 1990s and the power and wealth of their corporate benefactors that they completely forgot that the true purpose of their job was to protect the investing public. I watched as Arthur Andersen came down from its lofty perch to wrestle in the mud in search of more fees, more power, more political clout, more everything." (Pp.6, 7, 7-8.)

Even if one had not read the newspapers or watched television, and had never read or even heard of Toffler’s book, the corruption practiced by Arthur Andersen in the Enron matter is evident in the Supreme Court’s own opinion reversing the conviction. The very first sentence of the opinion -- the very first sentence -- says this: "As Enron Corporation’s financial difficulties became public in 2001, petitioner Arthur Andersen LLP, Enron’s auditor, instructed its employees to destroy documents pursuant to its document retention policy." (Emphasis added.) The opinion subsequently makes several further statements showing that Andersen acted corruptly in the Enron case -- showing that Andersen destroyed documents with knowledge that this could cover up accounting and business scandals and thereby thwart investigations of and litigation over these scandals. Thus the opinion, written by Rehnquist, says:

• "Within days" of the "unexpecte[d]" resignation on August 14, 2001 of Enron’s CEO, Jeff Skilling, "Sherron Watkins, a senior accountant at Enron, warned Kenneth Lay, Enron’s newly [re]appointed CEO, that Enron could ‘implode in a wave of accounting scandals.’ [Citation omitted.] She likewise informed [David] Duncan" -- the head of Andersen’s "‘engagement team for Enron" - - as well as "Michael Odom, one of [Andersen’s] partners who had supervisory responsibility over Duncan, of the looming problems." (Emphasis added.)

• "On August 28th, an article in the Wall Street Journal suggested improprieties at Enron, and the SEC opened an informal investigation. By early September, [Andersen] had formed an Enron "crisis-response" team which included Nancy Temple, an in-house counsel." (Emphasis added.)

• On October 9th "Temple discussed Enron with other in-house counsel. Her notes from the meeting reflect that ‘some SEC investigation’ is ‘highly probable.’"

• "On October 10, Odom spoke at a general training meeting attended by 89 employees, including 10 from the Enron engagement team. Odom urged everyone to comply with the firm’s document retention policy. He added: ‘[I]f it’s destroyed in the course of [the] normal policy and litigation is filed the next day, that’s great . . . . [W]e’ve followed our own policy, and whatever there was that might have been of interest to somebody is gone and irretrievable.’" (Emphasis added.) (Footnote omitted.)

• "On October 12, Temple entered the Enron matter into her computer, designating the ‘Type of Potential Claim’ as ‘Professional Practice—Government/Regulatory Inv[estigation].’ [Citation omitted.] Temple also e-mailed Odom, suggesting that he ‘remin[d] the engagement team of our documentation and retention policy.’"

• "On October 16, Enron announced" "a $1.01 billion charge to earnings. The following day the SEC notified Enron by letter that it had opened an investigation in August and requested certain information and documents. On October 19, Enron forwarded a copy of that letter to [Andersen] (footnote omitted)". (Footnote omitted.)

• On October 19th, "Temple also sent an e-mail to a member of [Andersen’s] internal team of accounting experts and attached a copy of the document policy. On October 20, the Enron "crisis-response" team held a conference call, during which Temple instructed everyone to [m]ake sure to follow the [document] policy.’"(Emphasis added)

• "On October 23, Enron CEO Lay declined to answer questions during a call with analysts because of ‘potential lawsuits, as well as the SEC inquiry.’"

• "After the call" on which Lay refused to answer questions, "Duncan met with other Andersen partners on the Enron engagement team and told them that they should ensure team members were complying with the document policy. Another meeting for all team members followed, during which Duncan distributed the policy and told everyone to comply. These, and other smaller meetings, were followed by substantial destruction of paper and electronic documents." (Emphasis added.)

• "On October 26, one of [Andersen’s] senior partners circulated a New York Times article discussing the SEC’s response to Enron. His e-mail commented that the problems are just beginning and we will be in the cross hairs. The marketplace is going to keep the pressure on this and is going to force the SEC to be tough.’ [Citation omitted.] On October 30, the SEC opened a formal investigation and sent Enron a letter that requested accounting documents."

• "Throughout this time period, the document destruction continued," regardless of the reservation of some Andersen managers.

• "[O]n November 8, the SEC served Enron and [Andersen] with subpoenas for records."

• "Enron filed for bankruptcy less than a month later. Duncan was fired and later pleaded guilty to witness tampering."

So, while the Supreme Court -- liberals and conservatives alike -- unanimously let Arthur Andersen off the hook in an opinion written by William Rehnquist, the facts stated in the Court’s own opinion make it clear as a bell that Andersen destroyed documents because it feared investigations and litigation over its accounting misconduct and wanted to do what it could to thwart those investigations and lawsuits by destroying evidence in order to make it unavailable.

Nor is it just in the opinion that one sees this. The idea was also manifested in the oral argument in the Supreme Court. As every lawyer must know, deeply-misnamed so-called "document retention programs," the kind of program that Andersen officials kept reminding people to adhere to -- reminders that were then "followed by substantial destruction of paper and electronic documents" -- are not in truth instituted or implemented for the purpose of retaining documents. Quite the contrary, even though they are euphemistically and misleadingly called document retention programs, they are actually initiated and followed to get rid of documents, to destroy them, not to retain them, and the purpose of getting rid of documents, of destroying them, is to ensure that there is no written evidence of culpability lying around which can be used against a culprit company by private plaintiffs or by law enforcement agencies. The Justices knew this. Thus Scalia made the following statement to Andersen’s lawyer at the oral argument:
"Ms. Mahoney, we -- you know, we all know that what are euphemistically termed 'record-retention programs' are, in fact, record-destruction programs, and that one of the purposes of the destruction is to eliminate from the files information that private individuals can use for lawsuits and that Government investigators can use for investigations." (Emphasis added.)

Of course Scalia, like most of the legal profession I would judge, sees nothing illegal or wrong with such dishonesty, with such destruction of evidence for the purpose of thwarting justice. Thus his very next sentence was: "And there has been nothing unlawful about having such a program, even if one of your purposes is not to leave lying around in the file stuff that can be used against you by either the government or a private individual."

So the facts in the Court’s opinion made clear that what had occurred was a major effort to obstruct justice by destroying evidence, and the Justices knew very well (as every lawyer must) that the purpose of installing and implementing a so-called document retention program is to insure that documents are not retained lest they be found and used by plaintiffs or government. Yet the Justices’ bias against the Government’s case was so pronounced -- I use the word "bias" deliberately -- that even at the oral argument experienced observers could tell the Government was going to lose. Thus, for example, in an article to which her newspaper attached the headline Justices Dubious of U.S. Case in Andersen, the highly regarded Linda Greenhouse of The New York Times wrote after the oral argument that the problem the government had faced in the trial court "looked easy compared with the one confronting it in the Supreme Court on Wednesday morning as the Justices heard Arthur Andersen’s appeal. The Justices were so clearly sympathetic to Andersen, with Justice Antonin Scalia at one point describing the government’s theory of the case as ‘weird,’ that the only question by the end of the argument appeared to be how quickly the court would produce an opinion overturning the firm’s conviction." (Emphasis added.) The answer to that lone question was "only 34 days" (the opinion came down on May 31st), which is about as fast as it gets in the Supreme Court.

How did the Supreme Court -- that supposed paragon of justice which isn’t, and which hasn’t been except for the brief interlude 1954-1968 -- justify (rapidly) letting this criminally immoral and guilty accounting firm off the hook? It did this by using a technique that it and other federal courts often employ. It did it by ignoring what had actually happened in the case and by instead treating the case as if it were based on facts worlds removed from what the actual facts were. And it did it by making abstract and technical legal arguments about words that only a formalistic lawyer could love. I shall go over the Court’s techniques -- to me, dishonest techniques -- relatively lightly, especially its mere verbal "analysis" of wording, in order to avoid boring non lawyers to death and boring most lawyers too.

What the Court fundamentally did is that it used verbal legerdemain to interpret the wording of the pertinent statute and the trial court’s instructions to the jury in a way that made it appear that the jury did not know that Andersen had to be aware it was doing something wrong, that Andersen had to be aware that it was not acting innocently. But on the facts of the case, there could be no doubt, none at all, that Andersen knew very well that its acts would obstruct justice by destroying evidence that could otherwise be used in fully expected investigations and litigations. There could be no doubt that to thwart justice by destroying evidence was indeed the precise purpose of Andersen’s actions. In fact, even the Supreme Court did not claim, while letting Andersen off the hook, that Andersen’s actions could remotely be thought innocent. No, the Court let Andersen off the hook even though the Court itself could not with a straight face claim Andersen was innocent, and the jury could hardly have failed to be aware that destruction of evidence for the very purpose of thwarting investigations and litigations had occurred.

Since not even the nine Justices -- conservatives and liberals alike -- who let Andersen off the hook could say it was an innocent, Rehnquist’s opinion instead tried to justify the Court’s ruling by saying that in other cases, other people might be innocent, since persuading a person to "‘withhold testimony or documents from a government proceeding or government official is not inherently malign.’" (Emphasis added.) To protect the rights of such other persons in other cases, the Court, said Rehnquist, had to be "restrain[ed]" in this case. Rehnquist gave examples of such innocent other persons in other cases. "Consider," he said, "a mother who suggests to her son that he invoke his right against compelled self incrimination." Of course, the privilege against self incrimination is a constitutional right, but there is no constitutional right to shred documents -- an obvious difference that somehow escaped our country’s Chief Justice.

Or consider, he said, "a wife who persuades her husband not to disclose marital confidences." But the marital privilege is affirmatively declared for good reasons by statutes or common law, whereas there is no such declaration that people should destroy evidence in order to thwart justice, another obvious distinction that somehow escaped our nation’s Chief Justice. Or consider the lawyer’s friend -- the attorney-client privilege, which is the lawyer’s answer to the plumber’s helper. Attorneys, said Rehnquist, advise clients not to disclose to the Internal Revenue Service documents that are protected by the attorney-client privilege, but "[n]o one would suggest" that lawyers who do this have acted wrongfully. But once again the obvious seems to have eluded Rehnquist. However malevolent some few benighted souls like this writer may think the attorney-client privilege often to be, there nonetheless is an attorney-client right not to disclose privileged documents to the IRS. Is there therefore a right to destroy unprivileged documentary evidence in order to obstruct justice? Not that I know of. And by the way, would Rehnquist say that nobody would claim a lawyer had acted improperly if he urged a client not to give the IRS documents that could not reasonably be thought privileged, and that therefore must under the law be turned over to the IRS? And what if the lawyer, in imitation of what people at Arthur Andersen did, and in order to obstruct justice, told the client to destroy unprivileged documents that had to be turned over to the IRS? Would the lawyer still have done nothing wrong?

All of this simple stuff, as I say, eluded the nation’s Chief Justice, who appeared interested only in finding reasons, however poor, to let Andersen off the hook for its dishonesty, and who was aided in this promotion of dishonesty by eight other judges, conservatives and liberals alike, who did not even see fit to write statements pointing out that obvious nonsense in Rehnquist’s opinion was obvious nonsense.

Now, it should go without saying that the verbal legerdemain and the specious arguments of Rehnquist’s opinion did not have to occur. There was nothing foreordained about them. As someone who taught constitutional law for twelve years (a long time ago) and who afterwards has intermittently read Supreme Court and court of appeals decisions, I cannot tell you how many dozens or scores of times, perhaps hundreds of times, I have read opinions that do something very different in circumstances closely analogous to ones claimed by Rehnquist to exist in the Andersen case. For example, many is the time that courts will say, to put it in the vernacular, "Well, what happened in the trial court wasn’t perfect. But the evidence was so strong that this lack of perfection constitutes [what lawyers and judges call] harmless error." Or courts will say, "Well, maybe the instructions weren’t perfect, but in the main they were okay and the jury must therefore have fundamentally understood what was required, and the evidence considered by the jury plainly met the requirements." But here the Court -- all nine judges -- chose a different path, chose the path of verbal legerdemain and thoughtless analogy. Why?

Well, I suppose one will not know "why" with near absolute certainty unless and until judges’ papers are both opened in the distant future (20 or 50 years from now) and disclose the underlying reasons for letting Andersen off. But though certainty is not currently possible, a pretty good informed guess is possible, a guess that is very likely to ultimately prove right is possible. And that guess is this: the Court knuckled under to the conservative reaction of business and its minions that has now set in against strong enforcement of principles of honesty that are intended to prevent another debacle of the Enron/Tyco/WorldCom/Global Crossing/Arthur Andersen mode, and that inhere in significant part in the Sarbanes-Oxley act.

You see, business and its minions, like Wall Street lawyers, big accounting firms, and certain federal legislators, and the media mouthpieces who serve business, like editorialists of The Wall Street Journal, have been counterattacking against Sarbanes- Oxley and other efforts to clean up the frauds and other misconduct that have occurred. So we regularly read that business will have too much trouble fully complying with Sarbanes/Oxley, that the SEC is acting too strongly, that Eliot Spitzer has gone way overboard, that corporations will become too timid to make progress, that companies will be destroyed and innocent people will be put out of work as occurred when Andersen collapsed after being indicted, that lawyers will be unable to do their jobs. There is, of course, no evidence of financial and economic debacles occurring because of honesty, whereas we know that, as has occurred many times in history, such debacles have occurred because of dishonesty. But never mind -- we are assured that strong enforcement of principles of honesty will lead to horrors. This, of course, is habitually the argument of the dishonest, of the unethical, of those who want to walk close to the line.

And this counter-revolution against honesty not only appears all around us, but was carried to the Supreme Court in amicus briefs filed by organizations of accountants and lawyers and by the U.S. Chamber of Commerce. (Amicus briefs are so-called friend-of-the-court briefs that in reality are usually friend-of-those-who-are-filing-them briefs.) A group of New York defense lawyers thus told the Supreme Court that strong enforcement of the pertinent statute "would threaten to impede the client’s ability to receive objective and unfettered advice" from his attorneys. A national association of criminal defense lawyers told the Court that upholding Andersen’s conviction would "plac[e] lawyers at risk of investigation, prosecution and imprisonment for doing their jobs," because "[w]hen a lawyer represents a client in connection with a potential government investigation, one of the lawyer’s goals" may be, "within the bounds of ethics and the law," to prevent the government from developing evidence against the client." (Emphasis added.) This same group, quoting a leading legal ethicist, also chimed in with "‘Don’t put it in writing’ is advice lawyers give every day." The U.S. Chamber of Commerce, and a litigating mouthpiece called The Washington Legal Foundation, said that strong enforcement would cause executives to risk prosecution for "compliance with a lawful [according to the amicus brief] document retention policy or the advice of counsel" "[i]f . . . the executive has any basis to believe that a formal government investigation may be commenced at some point in the future." The Chamber also warned the Court that while "Sadly, it is too late to spare Andersen and all its employees" since Andersen was out of business, nevertheless "reversal of the conviction will protect future targets of [so-called] excessive prosecutorial zeal." (And after the Court’s decision was handed down, the General Counsel of the Chamber, more or less thanking God for the decision, said that "The feeling is, ‘There but for the grace of God go I’ . . . . That memo [an incriminating memo by Sherron Watkins] is the kind of thing lawyers do all the time." (Emphasis added.))

Although there may be no absolute certainty until Justices’ papers are opened many years from now, to me there can be no true doubt that the parade of horribles counterattack on principles of honesty launched by business and its minions in the media and even in the Court had telling, had dispositive, effect. Thus it was that, at the oral argument, Justice Kennedy told the Government’s lawyer that the government’s position would result in liability "if you destroy any document that might raise a question, say, in the IRS audit. It seems to me that is a sweeping position, which will cause problems for every major corporation or small business in this country. I just -- I just don’t understand it." (Emphasis added.) When the lawyer replied that Kennedy was wrong because the government’s position would not cover routine use of a document retention program to get rid of masses of space-occupying paper not needed for any ongoing business reason, but that what was at issue here was a very non routine use of a "document destruction policy as a pretext and a cover to clean up and purge files when a government investigation was anticipated and it was perceived that these materials would be relevant," Kennedy didn’t want to hear it.

As ever, or as almost ever, the repeated propaganda which the wealthy can afford had effect.

The Court’s decision itself is also likely to have an effect. (This is true even though a recent Congressional statute closed one loophole in the existing law under which Andersen was prosecuted.) One cannot imagine that the effect of a decision reversing Andersen’s conviction could possibly be to make business more honest in its so-called document retention programs. The only real question, I would think, is the full extent to which it may make business less honest, e.g., by encouraging it to continuously destroy documents not because this is really necessary or desirable for business purposes, but rather to get rid of possibly incriminating documents that could later be used by government or plaintiffs, while falsely making it look as if the destruction was done not for this purpose but only as part of a regularly followed, everyday practice of disposing of documents. This type of deliberately misleading conduct seems to me a real possibility because of the Court’s opinion, including its statements that destruction is not necessarily corrupt, and because an underlying motif if you will of the opinion is that the Court can be persuaded, by regular and strident claims of possible disaster, not to allow punishment of even the most heinous misconduct by business, accountants and lawyers.

One last matter. Although the Andersen case was decided only a few weeks ago, it may already be having an influence. Consider the newly disclosed KPMG matter.

On June 16th The Wall Street Journal carried a major story saying that the government was considering indicting another large accounting firm, KPMG, for promoting illegal tax shelters and then obstructing justice by making misstatements to IRS investigators and concealing evidence about its actions. This matter arose because in the 1990s and early 2000s, major accounting and law firms, among others, were secretly selling, for huge sums of money, extraordinarily complicated, fraudulent tax shelters. These abusive secret shelters enabled people whose incomes were scores or hundreds of millions of dollars per year, or who were worth hundreds of millions or billions of dollars, to avoid paying taxes -- while the rest of us deluded schnooks of little or moderate income paid through the nose. The IRS did not know about the shelters, did not understand them when it finally learned of them, did not have the manpower to deal with them, and for a long time did nothing about them. But finally, after these things finally came to public attention, and there were newspaper exposes and Congressional investigations, the IRS began taking action. As a result of a long investigation, KPMG is now threatened with a possible indictment for promoting the abusive illegal shelters and then obstructing justice by making misleading statements to IRS investigators and concealing evidence.

Now, there are lots of good reasons to indict KPMG. Its shelters were abusive and illegal. It was involved in other accounting misconduct besides the shelters. It has in the past adopted very tough, very aggressive -- and, it would seem, wholly unwarranted and even nasty -- litigation tactics regarding its various forms of misconduct. It also misled IRS investigators and concealed documents, as said. For a period it stood by guilty personnel who were responsible for the shelters. It falsely claimed -- shades of one of Rehnquist’s analogues -- that certain documents were protected by the attorney-client privilege.

Yet, the government may choose not to indict KPMG. There are various reasons. As occurred with Arthur Andersen, KPMG might collapse and go out of business if there were an indictment, with thousands of people losing their jobs. The case would be complex to explain to a jury. KPMG has gotten rid of lots of the people responsible for the situation. It might agree to a huge fine without an indictment. It might agree to "extraordinary oversight, sweeping changes in business practices," and perhaps, as said, "a big fine." Big business and "some congressional Republicans" are claiming prosecutors are overzealous. The day that the Wall Street Journal’s article appeared -- and, one would think, motivated by that article in an effort to stave off indictment -- it issued an apology for its conduct. In its apology it said, among other things, that it "‘takes full responsibility for the unlawful conduct by former KPMG partners,"’ had gotten rid of persons "‘responsible for wrong doing"’ and had instituted "‘reforms to ensure the highest ethical standards"’. And, not to be forgotten, as well as directly relevant to this posting, the Supreme Court’s decision in Andersen shows that the government can lose even when there has been heinous misconduct. Also, the Andersen opinion shows as well in this regard that the Court will listen to big business and, regardless of whether Justices are conservative or liberal, will go out of its way to protect big business even when it has acted with gross dishonesty. So, the Andersen case, along with many other factors, is bound to have some influence here -- or at least is bound to be a subject of consideration here -+-- on the question of whether to indict another accounting firm which did grievous wrong and then, for a long period, tried to cover up its bad actions by further misconduct.*

*This posting represents the personal views of Lawrence R. Velvel. If you wish to respond to this email/blog, please email your response to me at velvel@mslaw.edu. Your response may be posted on the blog if you have no objection; please tell me if you do object.

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