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by Devvy Kidd

March 22, 2002

The Arthur Anderson firm accused of shredding key documents in the Enron scandal has done the unthinkable: They have told the feds that they will not stand by like sheep going to the slaughter and accept plea bargains.

This piece is not to excuse any alleged behavior by any employees at any level who are employed by Arthur Andersen. They are presumed innocent until proven guilty by a jury of their peers. In no way do I condone shredding of corporate documents to cover up possible crimes. Like millions of Americans, my heart goes out to all the employees of Enron who have been so tragically impacted by the collapse of that industry giant.

However, I believe it critical for Americans to understand why Arthur Andersen's people have done the right thing in standing up to the federal mafia. The federal government has no jurisdiction over Enron's personnel. You see, it's a constitutional thing.

Under the U.S. Constitution, Congress has the power to make criminal only four types of conduct: treason, piracies and felonies on the high seas, counterfeiting, and offenses against the laws of nations. The alleged shredding of documents by Arthur Andersen personnel does not fall under any of these categories and therefore, the feds lack jurisdiction.

Certainly every U.S. Attorney in the U.S. will hotly proclaim differently because they have been getting away with indicting anyone and everyone in the private sector for decades, regardless of whether or not they have jurisdiction. Benito Mussolini would surely have celebrated with a bottle of Chianti to the transformation of the U.S. Congress into a modern day version of the Fascisti.

However, much to the dismay of Mr. Ashcroft's Department of Justice, we are finally seeing a challenge to this gross abuse of power by the feds. Justice must be served, but it must also be served according to the supreme law of the land or we may as well pack it up and adjust our chains to a comfortable level.

How should the matter be investigated under a free enterprise system in a sovereign Republic? A complaint should have been brought to the State Attorney or Attorney General for the State of Texas where the alleged crime took place. These offices would then review available evidence. Should the determination be made that there is enough evidence to go forward, the next step would be to convene a grand jury. The grand jury would then consider the facts and evidence, and either issue indictments or decline to indict.

When an alleged corporate crime takes place inside a state, it is a matter for that state's judicial system to address. This is the constitutional remedy and it is in practice every day of the week in all 50 states of the Union. Additionally, stockholders and employees of the targeted company or corporation can seek remedy in the courts. These are indeed difficult situations for those so terribly affected by such failures, but it is the right way to proceed.

In the instance of Arthur Andersen, it is only because Enron is so politically connected that both political parties in Congress knee jerked and began shrieking "foul play," each hoping to uncover political dirt on the other. Had this been ABC Accounting Service in Elkhart, Indiana, the matter would have been handled as described above at the state level where it belongs.

The legal team for Arthur Andersen should be commended for standing up to the federal machine. This also includes their insistence that their clients be afforded Sixth Amendment protection in their right to have a speedy trial. Remember, the Sixth Amendment states "In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed;...."

As I noted above, Congress has the power to make criminal only four types of conduct: treason, piracies and felonies on the high seas, counterfeiting, and offenses against the laws of nations. Clearly shredding of documents by a private sector accounting firm in no way falls under these categories, and therefore, it is a matter for the individual state's judicial system.

Such a stand taken by Arthur Andersen's legal team indicates that there are still those in the legal community who read and understand the U.S. Constitution.

2002 - Devvy Kidd - All Rights Reserved

Devvy Kidd is an Advisory Board Member for The Wallace Institute. She is the founder and Director of POWER (Project on Winning Economic Reform). Her web site is: