Friday, September 4, 2015.

< Checking in on oil prices | Main | Reflection of a Mickey Mouse league >

January 21, 2006

Profiting from criminalizing business

weissman12.jpgAndrew Weissmann, the former head of the Enron Task Force who stepped down last year at the conclusion of the Task Force's disastrous Enron Broadband trial, is joining the New York office of law firm Jenner & Block where he will specialize on internal corporate compliance and investigations, including representation before the Justice Department, the Securities and Exchange Commission, and state and local authorities. Peter Lattman -- whose WSJ Law Blog has quickly become one of my daily reads --comments on Weissmann's hiring in the context of the New York legal scene here.

Meanwhile, as a result of Weissmann's dubious prosecutions while leading the Task Force, four Merrill Lynch executives have unjustly had their careers destroyed and their personal freedom lost, and thousands of employees around the country lost their jobs as an American accounting icon was improperly prosecuted out of business.

That's not the typical resumé that one would think would land a partnership at a prestigious law firm.

Posted by Tom at January 21, 2006 6:23 AM |



Seems to me your analysis is both superficial and incorrect. It all has to do with judgment and integrity, the most important reasons for hiring a lawyer.

To explain, let me talk briefly about an HEC program this week featuring Lee Scott, President and CEO of Wal-Marts.

Scott was talking about a rule that Wal-Mart's has against an employee accepting anything of value from a supplier. No lunchs, no dinners, nothing. If an employee goes to a supplier's place of business and is offered a can of diet coke, the employee must pay for such.

Scott says the reason why is that plain simple rules are easy to explain and enforce and that with lots of employees one needs simple plain, easily enforced rules.

Fast forward to AA. It had no plain simple rules on document "retention" and whatever rules they had they weren't following them. The !!!! hits the fan and they start telling each other to shredd and shredding.

Regardless of the legality of such, that AA was operating in such a mode was very very bad management. AA had bad management because it had bad rules. AA had bad management because it wasn't following whatever rules it had. AA had bad management because once the !!!! hit the fan, it didn't have management with the integrity and judgment to say, "can't follow the rule now, because it will look so bad will we likely we indicted."

In sum, what happened to AA was deserved because of the numerous management mistakes. The loss was entirely caused by bad management, which even has a duty to anticipate that you can do something so outrageous that you will get yourself indicted, even if you might prevail in the case itself.

You have to play the game well inside the lines.

Now, lets consider Weissman as a hire. Presumably, his pitch will be, hire me and I will help your company avoid the mistakes made by AA. I doubt he will say, "I'll come in late and help you shredd." I suspect he will say, once upon a time you could have safely done such, but their are risks here now that counsel a different course.

What you don't understand TK is that old saw that the job of the lawyer is to say, "No."


Posted by: Moe Levine at January 21, 2006 8:33 AM

Interesting you should make that last observation.

A former partner of mine, who I trained as a lawyer and who was appointed to a bankruptcy judgeship last year, paid me one of the highest compliments that I have ever received during his speech at his investiture ceremony:

"And to Tom Kirkendall, I want to thank him for teaching me the importance of being able to tell a good client 'No'."

Weissmann used a sledgehammer on Andersen when a scalpel was called for. He handled Andersen if it were a part of the mob when a far more nuanced and sensitive approach was appropriate.

In the Andersen case, the government cost thousands of its citizens jobs and ended an enterprise that had made a valuable contribution to American society. And the reason for this was Andersen's questionable judgment in the exercise of its document retention policy in the Enron case?

Andersen may have used bad judgment in implementing its document production policy. But Weissmann and the Justice Department's judgment in putting Andersen out of business made Andersen's judgment look pristine in comparison.

Posted by: Tom K at January 21, 2006 8:49 AM

Post a comment

Thanks for signing in, . Now you can comment. (sign out)

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Remember me?

© 2003 - 2015. Tom Kirkendall. All Rights Reserved.