The Supreme Court Asks What Enron Has to Do with January 6th—and Trump

On Monday, October 15, 2001, an executive assistant arrived for work at the Houston office of Arthur Andersen, at the time one of the Big Five accounting firms, to find that the break room was a mess. “There was food everywhere,” she later said, “like they had been there the whole weekend.” Near the remnants of meals were bags stuffed with paper strips. This was the opening scene in what became—as Bethany McLean and Peter Elkind recount in “The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron”—a bacchanalia of document shredding. Arthur Andersen executives had learned that their client Enron was likely being investigated by the Securities and Exchange Commission for what would prove to be egregious fraud. Subpoenas might arrive any day. They also knew, to varying degrees, that their own work on Enron’s books would not hold up to scrutiny. Soon, “files awaiting destruction spilled out into the hallways,” McLean and Elkind write. The pretense was that the paper obliteration was just a reflection of the accounting firm’s “document-retention policy,” and yet, in the space of about two weeks, the Houston office shredded more than it would in a year. At one point, Arthur Andersen, with its own machines at capacity, hired a mobile shredding truck from a company called Shred-It. Even the firm’s London office got in on the shredding.

That sorry episode was revisited, repeatedly and somewhat incongruously, before the Supreme Court on Tuesday, in oral arguments for Joseph W. Fischer v. United States. Fischer was part of the mob that assaulted the Capitol on January 6, 2021. He, like hundreds of other January 6th defendants, has been charged with, among other things, violating the Sarbanes-Oxley Act, a law that Congress passed, as Justice Elena Kagan put it on Tuesday, when “it had just gone through Enron” and had wanted to be sure that people like the Arthur Andersen accountants could be punished. However, Jack Smith, the special counsel overseeing the Justice Department’s investigations of Donald Trump, has used the same law for two of the four charges against the former President in the indictment that he brought in Washington, D.C. (Next week, the Court will also hear Trump’s argument that he is immune to those charges; he is facing three other criminal cases, too, and denies all wrongdoing.) Fischer argued that the prosecutors overreached by using Sarbanes-Oxley this way. Unfortunately for Smith, judging from the questions, a majority of the Justices seem to agree.

Prosecuting Arthur Andersen for shredding the Enron documents had been surprisingly tricky. Owing to the way that the law was written then, it was a crime to corruptly direct someone to shred evidence in an investigation, but not to do the shredding oneself. This was, as Elizabeth Prelogar, the Solicitor General, who argued the government’s case, said on Tuesday, “a glaring loophole,” which Sarbanes-Oxley closed. Section 1512(c)(1) of that law penalizes anyone who corruptly “alters, destroys, mutilates, or conceals a record, document, or other object” so as to prevent it from being used in an “official proceeding”—such as the investigation of Enron—or attempts to do so. The following section, 1512(c)(2), refers to anyone who “otherwise obstructs, influences, or impedes any official proceeding.”

Fischer, who pleaded not guilty, contends that the “otherwise” clause only covers other ways of interfering with evidence. (Jeffrey Green, Fischer’s lawyer, suggested that it might, for example, cover new “Information Age” methods for storing and manipulating documents.) Although the definition of documents and records has become more elastic in recent years, this is pretty much how the statute was used before January 6th. The Department of Justice, though, contends that, thanks to the “otherwise,” it can encompass almost anything and everything a person might do to obstruct an official proceeding.

Justice Ketanji Brown Jackson seemed skeptical of the prosecutors’ position. “It was in the wake of Enron, there was document destruction, and, you know, there was nothing as far as I can tell in the enactment history as it was recorded that suggests that Congress was thinking about obstruction more generally,” she said. “They had this particular problem.” Prelogar countered by saying that “the broader lesson Congress took away from Enron” was that “things will slip through the cracks”—in other words, that it’s handy for the government to have a catchall law. Justices Kagan and Sonia Sotomayor, judging from their questions, had a similar view, but Chief Justice John Roberts decidedly did not. Roberts pointed to a unanimous Court decision last week (it involved Wonder Bread) as an example of how, under the Court’s doctrines concerning interpretation, the words in the first section, about documents and records, would “control and define” the “otherwise” clause. And Prelogar’s answer didn’t quite satisfy Jackson, who said that she was still “struggling with leaping from what’s happening in (1)”—destroying evidence—to “all of obstruction in any form.”

One reason for Jackson’s struggle may be that the maximum penalty under the “otherwise” subsection is twenty years in prison—which seems high if it was really meant to cover a smorgasbord of ill-defined acts. Justice Neil Gorsuch, when asking Prelogar about “the breadth of this statute,” posed a number of hypotheticals—“Would a sit-in that disrupts a trial or access to a federal courthouse qualify?”—and a scenario that wasn’t really a hypothetical at all. “Would pulling a fire alarm before a vote qualify for twenty years in federal prison?” Gorsuch said. This was, as everyone present surely knew, a reference to a misguided move by Representative Jamaal Bowman, of New York, last September, as Republicans were rushing to push through a spending bill. The fact that he has not been charged with disrupting an official proceeding has been cited by critics of the January 6th prosecutions as an example of D.O.J. hypocrisy. (Bowman pleaded guilty to a misdemeanor and was censured by the House.)

Prelogar initially tried to dodge the question by saying that she wasn’t sure if, in those scenarios, prosecutors would be able to meet the other legal requirements, such as proving corrupt intent. (There was a separate argument about what “corrupt” might mean.) She also emphasized the violence of January 6th and the fact that, despite the seriousness of what happened that day, most sentences so far had been a fraction of those twenty years. But, when Justice Amy Coney Barrett pressed Prelogar on whether she was saying that “there has to be some sort of violence,” Prelogar said she was not. Barrett, in a further round of questions, asked about a scenario in which the Capitol had never been breached on January 6th, but the Stop the Steal rally outside nevertheless led to some sort of security alert and delay of the proceedings. Prelogar acknowledged that, under the government’s theory, if intent could be proved, that “probably would be chargeable.”

Prelogar’s answer distills why, Trump notwithstanding, the government’s position in this case is unsettling. Its reading of the statute is sweeping. Green, Fischer’s lawyer, stressed in his rebuttal that Prelogar had said that 1512(c)(2) “would cover peaceful protests.” One needn’t be Neil Gorsuch to imagine its use, and misuse, in contexts well beyond January 6th, especially if the Court endorsed that broad reading. Sit-ins and peaceful disruptions of official proceedings are basic tools of dissent, after all. And Prelogar’s insistence that the government has exercised discretion in its use of the statute only seemed to cause the more conservative Justices, particularly Justice Samuel Alito, to stew about selective prosecution. “For all the protests that have occurred in this Court, the Justice Department has not charged any serious offenses,” Alito said. He also brought up the Gaza-related protest stopping traffic on the Golden Gate Bridge. What if such protesters were keeping someone from getting to an official proceeding? (Prelogar said that, among other things, they would have to have “a specific proceeding in mind.”)

But, even if the Court limits the reach of the law, Joseph Fischer might not be in the clear. Donald Trump wouldn’t be, either. Barrett asked Green if the government could still “take a shot” at prosecuting his client under the theory that he was indeed interfering with documents and evidence—by trying to keep the certificates of various states’ electoral votes off of Vice-President Mike Pence’s desk. (“That’s closer,” Green conceded.) Similarly, Jackson asked Prelogar if the government would “necessarily lose” if the Court interpreted the law narrowly. (She, too, mentioned the electoral certificates.) Prelogar’s answer was that the government would certainly still try to win.

Justice Brett Kavanaugh mentioned that Fischer was charged with half a dozen other offenses, which didn’t have the same legal hurdles, and asked, “Why aren’t those six counts good enough?” (Prelogar said that they didn’t reflect his full “culpability.”) Trump, of course, has scores of felony charges pending against him across his four criminal cases. (The first seven jurors in his first trial, in New York, were chosen the same day Fischer was argued.) But it appears that, for two of those charges, the Court will at least require prosecutors to draw a clearer line connecting the accountants’ trash-bag-filled break room in Houston to the ransacked Capitol Rotunda. For that matter, despite the loophole, Arthur Andersen paid a price; its complicity in Enron’s fraud destroyed the company. Accounting’s Big Five is now the Big Four. ♦

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : The New Yorker – https://www.newyorker.com/news/daily-comment/the-supreme-court-asks-what-enron-has-to-do-with-january-6th-and-trump