Toppled conviction won’t help retirees, former Andersen partner says

This week’s decision by the U.S. Supreme Court to overturn the conviction of Arthur Andersen serves as a painful reminder of how many people were hurt when the firm’s Valley office disintegrated in 2002, one former partner said.

"The unfortunate thing is for those retired employees and partners whose retirement was taken away from them, and for those individuals who had a hard time finding appropriate new career opportunities," said Dean Bakke, a tax partner with Deloitte Tax LLP and a former partner in Andersen’s tax practice. "That’s the unfortunate thing of the way this was handled by the U.S. Department of Justice."

Andersen was convicted in June 2002 of destroying Enron Corp.-related documents before the energy giant’s collapse. But in a unanimous opinion, the Supreme Court justices said Andersen’s obstruction-of-justice conviction was improper. The decision said jury instructions at trial were too vague and broad for jurors to determine correctly whether Andersen obstructed justice.

The conviction of the Chicago-based firm forced it to surrender its accounting license and stop conducting public audits, leaving it virtually defunct.

"I think most people have moved on to new things in their lives," Bakke said. "When something like this happens you just need to move forward. But unfortunately there are some people who aren’t in a position to really do that."

Many former Andersen associates in the Valley either couldn’t be reached for comment or preferred not to comment on the Supreme Court decision.

The Supreme Court’s decision isn’t going to mean much to the future of Andersen, which "for all practical purposes is nonexistent," said Dr. Jim Boatsman, KPMG professor and director of the School of Accountancy in the W.P. Carey School of Business at Arizona State University.

The decision means Andersen could be retried, but that’s unlikely to happen, he said.

"It partially redeems the name just for the sake of setting the record straight," Boatsman said.

"The Supreme Court didn’t say that the firm is OK, it just said hey, the trial wasn’t proper. That doesn’t say you’re exonerated of all charges. It just says the guilty verdict is overturned."

This decision doesn’t do anything to help former Andersen employees who lost their jobs and had anything to do with any of the alleged crimes, Boatsman said.

"There were a lot of more senior people who lost a lot of their retirement and wealth in this, and I don’t see this changing that," he said.

"It makes you feel good, but other than that, it doesn’t do much for you. Your honor is kind of redeemed a little, but it’s not like you’re going to have your old job back, or your retirement."

Looking back, the prosecution and conviction of Andersen sent a signal to everyone in the accounting industry that "this could happen to you," Boatsman said.

"Whether the value of that signal was worth all the personal cost to individuals who committed no crime is another matter," he said. "Who knows."