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Tuesday May 31st, 2005

U. S. Supreme Court overturns Arthur Andersen conviction…Former Yukos head Mikhail Khodorkovsky receives nine year prison sentence in Moscow… A spokesman for the Arthur Andersen accounting firm says the former Big Five company feels vindicated by a U. S. Supreme Court decision today. The high court has unanimously overturned the conviction of the Arthur Andersen […]

U. S. Supreme Court overturns Arthur Andersen conviction…Former Yukos head Mikhail Khodorkovsky receives nine year prison sentence in Moscow…

A spokesman for the Arthur Andersen accounting firm says the former Big Five company feels vindicated by a U. S. Supreme Court decision today. The high court has unanimously overturned the conviction of the Arthur Andersen firm, saying the instructions to the federal jury in Houston were too vague. Andersen attorney Rusty Hardin heard the news while in Taipei, Taiwan.

Rusty Hardin audio 1

Hardin says emotions about Enron were running high when the trial was conducted.

Rusty Hardin audio 2

Arthur Andersen was found guilty in 2002 of destroying documents related to Enron. But, the high court says jury instructions in the Houston trial were too vague and broad for jurors to correctly determine whether Andersen obstructed justice.

Rusty Hardin audio 3

After Enron collapsed, Arthur Andersen put into practice a policy calling for destroying unneeded documents. This came as the Securities and Exchange Commission began looking into Enron’s books. During the trial, prosecutors called the practice “an unprecedented campaign of document destruction.” An Andersen spokesman says the accounting firm is pleased the ruling acknowledges the injustice that has been done to Arthur Andersen.” And he adds the decision represents an important step in removing ”an unjustified cloud over the professionalism and integrity of the people of Arthur Andersen.” Disappointed federal prosecutors say they’re weighing whether to retry the obstruction of justice case against Enron’s former accounting firm.

The U. S. Supreme Court’s decision to overturn the conviction of nearly defunct Arthur Andersen brought elation for some. However, the ruling provided little comfort to many people who lost their jobs when the accounting firm crumbled. Jonathan Goldsmith, a former consultant at Andersen’s Chicago headquarters, said it’s just too little, too late.” The 28,000 who worked for the firm’s U. S. arm knew Andersen’s appeal wouldn’t resurrect the business. Andersen had already lost clients, workers and its reputation when the firm went to trial in 2002 on charges of destroying Enron-related documents to thwart investigators probing the energy company.

The head of the Corporate Compliance Center at the South Texas College of Law, Paul McGreal, says prosecutors will have to take a different approach if they decide to re-try the case.

Paul McGreal audio 1

McGreal says the decision is important to people other than those who worked for Arthur Andersen.

Paul McGreal audio 2

McGreal says the Supreme Court reversal won’t revive Arthur Andersen, but it clarifies an area of law that is applicable beyond the accounting firm itself.

There’s a verdict in the most closely-watched trial in Russia since the fall of the Soviet Union. A Russian oil tycoon known for opposing President Vladimir Putin has been convicted of charges that include fraud and tax evasion. Mikhail Khodorkovsky has been sentenced to nine years in prison. Taking into account time served, that means seven-and-a-half more years. Khodorkovsky used to run the Yukos Oil Company and was once thought to be Russia’s richest man. His supporters say the Kremlin wants him in prison for political reasons. The U. S. Commerce Secretary told business representatives in Moscow that the case makes foreign investors “leery.”

Verizon and SBC are betting consumers will shun cable TV companies and buy television service from phone companies. But first, the telcos must win over state legislators. They lost a round in Texas over the weekend when a bill stalled in the legislature that would have allowed them to get a statewide television franchise. The law now requires companies to obtain franchises from each municipality individually. The defeat makes an aggressive push from the regional Bells for new federal telecom regulation more likely. For Verizon, that would mean gaining licenses in 10,000 municipalities. And it can take six to 18 months to get a license for TV service in just one city.

El Paso Corporation has sold its Lakeside Technology Center to Digital Realty Trust in a $140 million deal. The Chicago-based Lakeside Technology Center houses a data center, telecommunications network carriers and information technology service providers.

After 37 years of operations, the Tower of the Americas restaurant in San Antonio has closed its doors, marking the end of a contract that Frontier Enterprises had with the city to operate. Landry’s Restaurants will begin operating the restaurant late next year. The Towers of the Americas opened as part of HemisFair ’68. It will be closed for more than a year and undergo $9 million in renovations.

The state has filed suit against a Dallas-based mail-order prescription drug service, alleging it asked senior citizens to commit fraud. Texas Attorney General Greg Abbott says Senior RX Support asked senior customers to lie to drug companies about their incomes. An official with the mail-order prescription drug service denies state allegations the company preyed on senior citizens–and asked them to commit fraud. Income-qualifying seniors can obtain discount prescription drugs under drug company programs. Abbott says Senior RX Support offered to fill out application forms for senior citizens in return for a fee–then told them to report only their social security income. Abbott says clients were charged a $20 enrollment fee, plus $60 per year per prescription. Abbott says the company “duped seniors into paying for a service that was already available for free–then made matters worse by asking them to lie about their income to obtain discounted drug prices.”

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