Andersen convicted in Enron audit case

? A jury on Saturday convicted Arthur Andersen of obstruction of justice, dealing the battered accounting firm a potentially fatal blow and giving a first victory to prosecutors investigating the sudden collapse of energy-trader Enron.

The conviction could put Andersen, which has already lost more than a third of its public clients, out of business, though an Andersen lawyer promised a legal fight to keep the company alive. Government lawyers hailed the verdict as a major step toward unraveling the Enron scandal.

In interviews after the verdict, jurors said they based their decision on evidence that an Andersen in-house lawyer sought to doctor a memo about the Enron case.

Four jurors downplayed the government’s claims that Andersen’s destruction of tons of paper and thousands of computer files was an attempt to thwart federal regulators investigating Enron.

“All this business about telling people to shred documents was largely superficial and largely circumstantial,” jury foreman Oscar Criner said.

Prosecutor Andrew Weissmann said the case boiled down to a simple principle: “When you expect the police, you don’t destroy evidence.”

The verdict, reached after 72 hours of deliberations over 10 days, is expected to bolster the federal investigation into what led to Enron’s collapse late last year.

“It sends a strong message that we are going to get to the bottom of the Enron debacle and those people responsible will be prosecuted,” said Leslie Caldwell, head of the criminal division of the Justice Department’s San Francisco office and leader of its national Enron Task Force.