When the FBI Comes Calling…®
Thursday, June 13, 2002
Jury tells Andersen judge of deadlock;
Ordered to stick with deliberations
By E.A. Torriero and Robert Manor
After more than 56 hours of deliberation spanning seven consecutive days, a federal jury of nine men and three women said late Wednesday afternoon that they were deadlocked in Andersen's obstruction-of-justice trial.
"We are not able to reach a unanimous decision," the jury foreman, an applied science professor, said in a neatly handwritten note to U.S. District Judge Melinda Harmon shortly before 6 p.m.
After bringing jurors to the courtroom and telling them to try again--a standard move in federal cases through an order known as the "Allen" charge--Harmon sent them back to a hotel for the night. They are scheduled to return to the jury room at 9 a.m. Thursday to continue deliberations.
"This is an important case," Harmon told them, encouraging each of the jurors to re-evaluate their views. "The trial has been expensive in terms of time and money."
Andersen is charged with obstruction of justice after auditors shredded thousands of documents with a federal probe under way last fall into losses of more than $1 billion at its troubled client, Enron Corp.
Jurors gave no indication about how many favored guilt or acquittal. Some on the panel seemed clearly frustrated as Harmon encouraged them to keep trying for a verdict. A few sat with arms folded. Others looked down at their shoes.
Charge brings verdicts
In most federal cases, a jury reaches a decision after a judge returns them to deliberations, legal case studies have shown, said attorneys who have studied Allen charges. But each case is unique, they cautioned, and it's difficult to predict an outcome based on past statistics.
Rusty Hardin, Andersen's attorney, said the result may depend on how deeply divided the jury is.
"If the jury is split evenly, then it will likely be harder for them to come to a verdict," Hardin said. "But if most of them are leaning one way or another, they could come to a unanimous decision. We hope they do."
The Allen charge is more than 100 years old. It is named after a 14-year-old boy, Alexander Allen, who was charged in 1896 with shooting and killing an 18-year-old man who Allen said was intent on attacking him. The shooting took place on a Cherokee reservation, making it a federal matter.
When the jury was unable to reach a verdict, the judge instructed the panel to re-examine their opinions. He suggested that pro-acquittal jurors consider that pro-conviction jurors might be right, and vice versa.
The Allen charge has been given thousands of times since.
Douglas McNabb, a white-collar defense lawyer with a federal practice in Houston, said that after hearing the Allen charge, juries generally don't take long to either reach a verdict or acknowledge that their differences cannot be resolved.
"I would expect they will reach a decision or they will come back with the same result by Friday at the latest," McNabb said.
If the jury finally decides it is unable to reach a verdict, Harmon will declare a mistrial.
Prosecutors declined to comment on the case and left the court with stiff expressions. Privately, government sources said this week that the U.S. Justice Department would retry Andersen if this jury continues to deadlock.
Before the trial began, legal observers viewed the case as a slam-dunk for the government because it had a star witness: lead Andersen auditor David Duncan, who pleaded guilty in April to a single count of obstruction of justice.
But as the case unfolded--Duncan's weak-hearted testimony may have failed to sway some jurors--the government's prosecution appeared more tenuous. Even a mistrial would be a victory for Andersen, some legal observers say.
"Clearly the defense would be the winner because this was a very tough case from the beginning," McNabb said.
Looking for moral victory
Before the trial, Andersen executives would have been thrilled at the notion of a mistrial. Last-minute negotiations to avoid trial stalled, and Andersen came into court a clear underdog. The firm faces fines of up to $500,000 and could lose its license to practice.
But as the case unfolded, their spirits soared and they became more convinced that the government's evidence was weak.
"I just hope now that the jury comes back with an acquittal," said C.E. Andrews, Andersen's top partner.
Andersen executives claim the government's indictment drove a stake through the firm, which already was hemorrhaging from bad press and government investigations into faulty accounting with Enron and two other high-profile accounts, Sunbeam Corp. and Waste Management Inc.
Little remains but to salvage the firm's good name. Andersen is down to less than 10,000 employees from 28,000 in recent months and is being sold off piece by piece. Still, its partners want at least the moral victory.
"Arthur Andersen wasn't guilty from the very beginning," Hardin said as he strode from the courthouse Wednesday. "I just want to hear those jurors say that."