HOUSTON – The judge in accounting firm Andersen's criminal obstruction of justice trial made a crucial ruling Friday that could help a deadlocked jury reach a guilty verdict.
U.S. District Judge Melinda Harmon ruled the 12 members of the jury need not agree that the same Andersen employee acted corruptly in order to find the entire partnership guilty. The panel is now in the ninth day of deliberations, and their second since announcing a deadlock on Wednesday.
Assistant U.S. Attorney Andrew Weissmann, the lead prosecutor in the case, said of the ruling: "We're very gratified."
The defense said Harmon's ruling could end the deadlock among jurors. "They have just been give a way out," said Rusty Hardin, the lead attorney for Andersen.
Harmon's answer to the jury is crucial because she instructed the jury at the beginning of deliberations that it must return a verdict of guilty if they find an agent or agents of Andersen acted knowingly and with corrupt intent.
"If each of us believes that one Andersen agent acted knowingly and with a corrupt intent, is it for all of us to believe it was the same agent," the jury asked Harmon early Thursday. "Can one believe it was agent A, can one believe it was agent B, and one believe it agent C?"
Harmon's answer almost parroted the exact language the government preferred.
"The answer to your first question is 'no,' the answer to your second question is 'yes,"' Harmon said her answer would read.
The jury offered its question soon after it resumed deliberations as ordered by Harmon. The judge accepted briefs from both sides and reviewed a number of cases before ruling, but said she found that not one of them was directly on point.
"This is a case of first impression, which is terrifying to a district judge," Harmon said, referring to the fact her ruling would set precedent and be open to appellate review. Harmon said the fact that Andersen was a partnership and therefore had many agents.
The defense had argued that the very fact the jury could not agree on who acted illegally was enough "reasonable doubt" to acquit the firm.
On Friday, the jury sent out another note asking to rehear the testimony of a U.S. Securities and Exchange official, Thomas Newkirk, who testified about how the securities regulator operates. Prosecutors and defense attorneys had yet to agree on which part of the lengthy testimony would be read to the jurors.
Earlier in the day, the court reporter re-tread the testimony of David Duncan, Andersen's former lead auditor for Enron Corp. The Houston energy trader was Andersen's second-biggest client and filed the largest-ever U.S. bankruptcy Dec. 2 amid questions about murky accounting around its off-balance sheet partnerships.
The segment of testimony focused on Duncan's discussions with former Enron chief accounting officer Richard Causey in the days leading up to the Houston energy trader's disastrous third-quarter earnings release. Duncan pleaded guilty to obstruction of justice April 9 and testified for the government in exchange for the recommendation of a lighter sentence.
The four pieces of testimony and evidence the jurors asked for gave some inkling of who they may believe committed a crime. Their requests involved Andersen lawyer Nancy Temple, Duncan and senior partner Michael Odom.
Those are three Andersen employees the government has termed "corrupt persuaders," or those they allege caused others at the firm to break the law.
Andersen, which is based in Chicago, admitted destroying thousands of Enron audit records in the two weeks starting Oct. 23, as the SEC began its investigation. Andersen's lawyers have argued the firm destroyed extraneous documents under its normal record-keeping policy and, in fact, retained many important ones.