While the U.S. Supreme Court’s June 28 decision in Fischer v. United States rejected a broad application of certain Enron-era obstruction of justice laws, it reaffirmed the original corporate responsibility focus of those laws. In so doing, the decision reminds corporate executives of the perilous scope of the obstruction laws and the trap they present for records management in the context of a government investigation.

Fischer involved the unlikely juxtaposition of a specific provision of the Sarbanes-Oxley Act (“Sarbanes”) and the January 6, 2021 breach of the U.S. Capitol that delayed the certification of the results of the presidential election. Corporate governance observers could thus be excused for failing to initially recognize the case’s compliance-related significance.

Section 1512(c) of Sarbanes provides criminal penalties for anyone who corruptly:

(1) alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding; or

(2) otherwise [emphasis added] obstructs, influences, or impedes any official proceeding, or attempts to do so.

Prior to the enactment of Sarbanes, the federal obstruction of justice laws imposed criminal liability on anyone “who knowingly uses intimidation or physical force, threatens, or corruptly persuades another person” to, among others acts, shred documents. As the Fischer Court noted, Section 1512(c) was subsequently enacted to fill a gap in those existing laws:the failure to impose criminal liability on an individual who personally destroys documents (e.g. the Enron/Arthur Andersen circumstances).

Fischer, the petitioner in the case, had been charged in part with violating Section 1512(c)(2) (obstructing an official proceeding) for allegedly forcing his way into the Capitol and assaulting members of the Capitol Police. In his defense, he argued that Section 1512(c) relates only to acts that affect the integrity or availability of evidence [emphasis added] in an official congressional proceeding. While the district court agreed with Fischer’s argument, the D.C. Circuitreversed on the basis that Section 1512(c)(2) is a catchall provision that reaches beyond the specific examples in subsection (c)(1).

Thus, the question before the Supreme Court was whether Section 1512(c) is limited to actions pertaining to evidence[emphasis added] for official proceedings or could be extended to include physical actions such as those for which Fischer was charged. Focusing in large part on historical interpretation of “otherwise” clauses, the Court ruled in favor of Fischer, writing that Section 1512(c) requires “that the defendant impaired the availability or integrity for use in an official proceeding of records, documents, objects, or other things used in an official proceeding, or attempted to do so.”

Thus, on the one hand, the Fischer decision represents a setback for the enforcement of federal obstruction of justice laws to the extent that it prohibits use of Section 1512(c)(2) to challenge obstructive actions that are not related to documents or other tangibles intended for use in official proceedings.

But on the other hand, Fischer represents a strong endorsement of the basic purposes of Section 1512 in general, and the “Sarbanes amendment” of Section (c) in particular. First, the Court recognized the basic legislative intent of Section 1512(c) (i.e. “fill the gap”), and second, it clarified that the “otherwise” nature of Section 1512(c)(2) makes it a crime to impair the availability or integrity of records, documents, or objects used in an official proceeding in ways other than[emphasis added] those specified in Section 1512(c)(1); e.g. by creating false evidence, impairing witness testimony, or tampering with intangible information.

And that’s a problem for corporate executives. For Section 1512(c)-type obstruction at its essence is not a political crime but an evidentiary crime, historically exemplified in document shredding. In this sense, evidentiary obstruction should always be a major corporate compliance concern. Given their Sarbanes roots, the obstruction laws are focused on individuals, whether in business or politics, who play fast and loose with records and documents while they, or their company, are under government scrutiny.

A modern concern lies in the fact that the vast majority of company records are now electronically created and stored. The days of backroom boxed-document shredding are long gone. Advances in technology provide the ability to tap a few keys to make records vanish or change them permanently. Systems and software programs can be deployed. In this era, the ways in which records can be “disappeared” or selectively changed are endless. And the pressure to do just that is increased with the government’s current focus on individual accountability for corporate fraud.

That is where the broader corporate responsibility relevance of Fischer comes into play. When read closely, rather than relieving worry, it should intensify businesses’ awareness of the obstruction of justice laws and the type of conduct that they prohibit. And it is a reminder that, while corporate fraud defendants may be able to overcome the government’s main allegations of wrongdoing, they can still be tripped up by their efforts to obstruct the investigation of that wrongdoing, whether through lies, records destruction, creating false evidence, witness intimidation, or other efforts (subtle or otherwise) to conceal evidence.

That’s why an indirect message from the Fischer decision is the continuing importance of “tone at the top;” the need for senior executives to set high standards for corporate responsibility and effective compliance. It’s also about the need for a culture that supports leadership efforts to weed out from the organization those who view deviousness as a virtue, deception as a skill, rectitude as weakness, and “I’ll never get caught” as an acceptable strategy.

Government investigators and prosecutors are likely to double down and sharpen their focus on federal obstruction with the roadmap the Supreme Court has provided in Fischer. One can hope that the events of January 6, 2021 will never be repeated, but corporate wrongdoing will remain on the government dashboard indefinitely. Companies should count on more scrutiny, not less. As former President Nixon is famously said to have observed, “[It’s not the crime], it’s the cover-up that hurts. If you cover-up, you’re going to get caught.”

This post comes of us from Michael W. Peregrine and Ashley C. Hoff at the law firm of McDermott, Will & Emery LLP.