The Washington Post leads with the details of an executive order, signed by president Bush earlier this year, directing the CIA to expand covert operations to topple Iraqi President Saddam Hussein. The New York Times and Los Angeles Times lead with the verdict in the Arthur Andersen obstruction of justice trial, where jurors in their 10th day of deliberations, handed down a guilty verdict. A few hours afterward, the guilty accounting firm informed the SEC that they would cease auditing public companies by the end of August, a move, writes the NYT, “effectively ending the life of the 89-year-old firm.”
Judging by the day’s papers, jurors in the Andersen case were very open in granting reporters post-trial analysis of what happened during deliberations. According to an article inside the NYT, jurors were initially split down the middle in their opinions on whether Andersen obstructed the SEC’s investigation of Enron with intent. This changed when evidence was reviewed and reread. Once that happened, jurors found their smoking gun—not the much-hyped shredded Enron documents, but rather a change that Andersen lawyer Nancy Temple made to an internal memorandum written by David B. Duncan, Andersen’s lead partner in the Enron account. This document recounted Duncan’s conversations with Enron’s chief accounting officer about whether certain Enron losses should be reported as “nonrecurring,” and whether this could potentially be used by the SEC as potential evidence of “misleading” investors. Temple removed the latter discussion from the memorandum, evidence the jury saw, as proving intent.
Andersen’s sentencing will come on October 11th, and it could be fined up to $500,000. The papers seem more interested, however, in figuring out what this means to Andersen as a firm, the upcoming Enron case, and more broadly, the future prosecution of U.S. corporations. Despite the apparent resignation of the firm signaled by its announcement that it will stop auditing the some 1,600 public companies it still serves, the WP quotes a defense attorney as saying the “chances of this conviction standing up are one in a million.” The NYT, in its news analysis, rules the prosecution’s victory as being far from a knockout victory, but indicates that it will serve well in future government actions against Enron and others.
The WP fronts the Andersen ruling and runs with a look at how President Bush directed the CIA to act earlier this year in regards to Saddam Hussein, something first reported by USA Today in its lead on February 28th. The executive order gives the CIA expanded authority to fund Iraqi opposition groups in and outside Iraq, directs enhanced intelligence about the country, and most importantly grants possible use of CIA and U.S. Special Forces, allowed, according to the WP, to kill Hussein “if they were acting in self defense.” The move is “preparatory,” says one unnamed source.
The NYT and the WP both off-lead stories about al-Qaida’s post-Afghanistan strategy, which includes terrorist actions directed from dispersed operatives. The WP fingers three men, citizens of Saudi Arabia and arrested in Morocco, as being a major source of information to American authorities investigating al-Qaida links. The men say that a top Osama Bin Laden lieutenant in December, claiming direction from Bin Laden himself, huddled his men together one last time in Afghanistan and gave out last orders to disperse to areas where they had previously operated for future attacks against “American and Jewish interests” from these points. The NYT mentions the Moroccan connection only in passing but comes up with the same news, saying that at least seven al-Qaida operatives “possess the managerial skill and authority to carry out attacks” from wherever they are.
Meanwhile, hundreds of al-Qaida operatives, the LAT says in a front page story, are hiding in Pakistan, where the country has “replaced Afghanistan as a command-and-control center for at least some of the battered remnants of Osama bin Laden’s terrorist army.”
The WP stuffs news that Pakistani police are now investigating the possibility that the massive blast outside the U.S. embassy in Karachi was not triggered by a suicide bomber, but rather by remote control. Investigators, who have traced the bomb-carrying Toyota Corolla to a driving school in the neighborhood, now suspect that the bomb was placed in the car without the knowledge of the automobile’s occupants, which included that day several female driving pupils.
All the papers go inside with the somewhat unexpected results of the Czech Republic’s national elections. Instead of voting in Vaclav Klaus, leader of the center-right Civic Democratic Party and the leader in most polls conducted up until the election, the Czech citizens elected to keep in power the center-left Social Democrats, whose new leader, Vladimir Spidla, has promised to guide his country into the European Union. Unexpectedly, the Communist Party garnered nearly one fifth of the votes.
Holidays typically bring out the peculiar in newspapers, as editors and reporters on the City Desk strain to find original ways to cover these “special” days. Today’s Father’s Day is no exception. Contributing to the holiday canon is a LAT report on the “Father’s Day gift” a 73-year-old grandmother gave her son—his daughter’s bat mitzvah—which the girl only agreed to receive when the grandmother agreed to have one herself. Topping this is a WP story in which author Peter Carlson contributes a nearly 2,700-word salute to big bellies. He begins the story: “This Father’s Day, let us praise Dad by celebrating that ever-expanding, much-maligned monument to the good life that he always carries close to his heart—his paunch, his shelf, his spare tire, his front porch, his Buddha, his bay window, his beer gut, his potbelly.”