544 U.S. 696, 125 S. Ct. 2129, 161 L. Ed. 2d 1008 (2005)
Enron Corporation switched its business from operation of natural gas pipelines to an energy conglomerate during the 1990s.1 This move was accompanied by aggressive accounting practices and rapid growth.2 Beginning in 2000, Enron’s financial performance began to suffer, and as 2001 wore on it worsened.3
On August 14, 2001, Jeffrey Skilling, Enron’s Chief Executive Officer, unexpectedly resigned.4 Within days, Sherron Watkins, a senior accountant at Enron, warned Kenneth Lay, Enron’s newly reappointed CEO, that Enron could implode in a wave of accounting scandals.5 She likewise informed David Duncan and Michael Odom of the looming problems.6
On August 28, an article in the Wall Street Journal suggested improprieties at Enron, and the SEC opened an informal investigation.7 By early September, petitioner had formed an Enron crisis-response team, which included Nancy Temple, an in-house counsel.8 On October 8, petitioner retained outside counsel to represent it in any litigation that might arise from the Enron matter.9
On October 10, Odom spoke at a general training meeting attended by 89 employees, including 10 from the Enron engagement team.10 Odom urged everyone to comply with the firm’s document retention policy.11 He added that if it is destroyed in the course of the normal policy and litigation is filed the next day, that is great because the firm has followed its own policy.12
Temple entered the Enron matter into her computer on October 12, designating the Type of Potential Claim as Professional Practice Government Regulatory Investigation.13 Temple also emailed Odom, suggesting that he remind the engagement team of the documentation and retention policy.14
On October 16, Enron announced its third quarter results disclosing a $1.01 billion charge to earnings.15 The following day, the SEC notified Enron by letter that it had opened an investigation in August and requested information and documents.16 On October 19, Enron forwarded a copy of that letter to petitioner.17 On the same day, Temple sent an e-mail to a member of petitioner’s internal team of accounting experts and attached a copy of the document policy.18
On October 20, the Enron crisis-response team held a conference call, during which Temple instructed everyone to make sure to follow the document policy.19 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.20 After the call, 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.21 Another meeting for all team members followed, during which Duncan distributed the policy and told everyone to comply.22 These and other smaller meetings were followed by substantial destruction of paper and electronic documents.23
On October 30, the SEC opened a formal investigation and sent Enron a letter that requested accounting documents.24 Throughout this time period, the document destruction continued despite reservations by some of petitioner’s managers.25 On November 8, Enron announced that it would issue a comprehensive restatement of its earnings and assets.26 Also on November 8, the SEC served Enron and petitioner with subpoenas for records.27 On November 9, Duncan’s secretary sent an e-mail that stated Per Dave No more shredding. We have been officially served for our documents.28
In March 2002, petitioner was indicted in the Southern District of Texas on one count of violating sections 1512(b)(2)(A) and (B).29 The indictment alleged that between October 10 and November 9, 2001, petitioner did knowingly, intentionally and corruptly persuade other persons, to wit petitioner’s employees, with intent to cause them to withhold documents from, and alter documents for use in, official proceedings, namely regulatory and criminal proceedings and investigations.30 A jury trial followed.31 When the case went to the jury, that body deliberated for seven days and then declared that it was deadlocked.32 The District Court delivered an Allen charge, and after three more days of deliberation, the jury returned a guilty verdict.33 The District Court denied petitioner’s motion for a judgment of acquittal.34
The Court of Appeals for the Fifth Circuit affirmed.35 Because of a split of authority regarding the meaning of section 1512(b), the Supreme Court granted certiorari.36
Whether the jury instructions properly conveyed the elements of a conviction under 18 U.S.C. § 1512(b) for knowingly corruptly persuading another person?37
Section 1512(b) requires that the defendant knowingly corruptly persuade another person with intent to cause that person to withhold or alter documents for use in an official proceeding.38 This means the defendant must be conscious of wrongdoing, as only persons conscious of wrongdoing can be said to knowingly corruptly persuade.39 The term corruptly is associated with wrongful, immoral, depraved, or evil conduct.40
No. The jury instructions failed to convey the requisite consciousness of wrongdoing.41
The instructions told the jury that even if the petitioner honestly and sincerely believed that its conduct was lawful, it could still find the petitioner guilty.42 They also diluted the meaning of corruptly so that it covered innocent conduct by allowing conviction if the petitioner intended to subvert, undermine, or impede governmental factfinding.43
Applying this rule to the established facts, Arthur Andersen instructed its employees to destroy documents pursuant to its document retention policy after Enron's financial difficulties became public and the SEC opened an informal investigation.44 The facts show that the engagement team head David Duncan distributed the policy and directed compliance, leading to substantial destruction of documents.45 However, the instructions did not require the jury to find that Andersen was conscious of any wrongdoing in following the policy, which is a common business practice.46
Whether a conviction under 18 U.S.C. § 1512(b) requires that the defendant contemplated a particular official proceeding when persuading others to destroy documents?49
A conviction under 18 U.S.C. § 1512(b) requires a nexus between the persuasion to destroy documents and a particular official proceeding that the defendant has in contemplation.50 A knowingly corrupt persuader cannot be someone who acts without foreseeing any particular official proceeding in which the documents might be material.
Yes. The statute requires that the defendant have in contemplation a particular official proceeding in which the documents might be material.51
The instructions led the jury to believe that it did not have to find any nexus between the persuasion and any particular proceeding.52 In the established facts, the persuasion occurred between October 10 and November 9, 2001, after the SEC had opened an informal investigation on August 28 and before the formal investigation on October 30 and subpoenas on November 8, but the instructions did not require finding that Andersen contemplated a particular proceeding.53
Applying the rule to the established facts shows that the SEC investigation was underway. Enron had forwarded the SEC letter to Andersen. The jury was not instructed to determine whether Andersen acted with knowledge that its actions were likely to affect a specific official proceeding.54
Because the jury instructions failed to require the necessary nexus, they were infirm and the conviction cannot stand.55