The U.S. Supreme Court issued its long-awaited opinion today in Skilling v. United States, and, in so doing attempted to clarify its view of the Honest Service Fraud (HSF) statute. While the Court certainly narrowed the reach of HSF to the realm of "bribery and kickback schemes", it emphatically stated the law was constitutional (page 9):
Interpreted to encompass only bribery and kickback schemes, [the HSF statute] is not unconstitutionally vague. A prohibition on fraudulently depriving another of one’s honest services by accepting bribes or kickbacks presents neither a fair-notice nor an arbitrary-prosecution problem.
The decision to uphold HSF as constitutional was decided on a 6-3 vote, with Chief Justice Roberts and Justices Alito, Breyer, Ginsburg, Sotomayor and Stevens forming the majority. Justice Scalia authored the dissent and was joined by Justices Kennedy and Thomas.
On the surface this seems straightforward. But what does the Supreme Court mean by "bribery and kickback schemes"? We're most interested in how the Supreme Court's ruling affects the retrial of Abramoff lieutenant Kevin Ring, so let's explore how today's ruling might affect that case.
Critics of the HSF statute have described the law as bribery-lite. Bribery is a very strict statute that is difficult to prosecute. Bribery requires the prosecution to show that a specific thing of value was exchanged for a specific official act -- a specific quid pro quo. On the other hand, HSF can be proven by showing that things of value influenced an official act.
When the SCOTUS says that HSF encompasses only "bribery and kickback schemes", did the SCOTUS intend for the standard to be the more difficult bribery statute quid pro quo? Or is the old HSF briberyesque definition which doesn't require the quid pro quo sufficient? It appears to the ACR Blog that the old HSF briberyesque definition is still the law. On page 49 of Skilling, the Supreme Court approvingly cites U.S. v. Kemp (2007). Kemp finds the following jury instruction to accurately describe HSF law (page 37):
[W]here there is a stream of benefits given by a person to favor a public official, ... it need not be shown that any specific benefit was given in exchange for a specific official act. If you find beyond a reasonable doubt that a person gave an official a stream of benefits in implicit exchange for one or more official acts, you may conclude that a bribery has occurred. [Ellipsis in original]
When it comes to the "stream of benefits" or "retainer" theory of HSF, SCOTUS seems to have decided in Skilling to leave the key provision of the old HSF law intact. Of course we do not have a J.D. degree, but it is the opinion of the ACR Blog that Skilling provides no relief for Mr. Ring or many of the other defendants who have pled guilty to HSF charges in the Abramoff scandal. We are sure, however, that Mr. Ring's defense team at Miller Chevalier will zealously present the opposing viewpoint before U.S. District Judge Ellen S. Huvelle, and we look forward to reading the defense's briefs.
An unlikely Abramoff apologist seems to have missed these crucial details. Of course, this individual has consistently predicted that the SCOTUS would strike down HSF in its entirety. The right-of-center Washington Times provides a more balanced perspective, as they included this insightful commentary:
But after the court's ruling, New York lawyer Terrence Oved said the decision will not have any effect on the cases emanating from lobbyist Jack Abramoff's conviction and cooperation, as those cases involved bribes and kickbacks. Similarly, he said, the Blagojevich trial is unlikely to be affected as his case also involves bribery and the jury will be able to receive instructions that take the decision into account. The judge in the case had previously said the Skilling decision was unlikely to help Mr. Blagojevich.
Some readers were predicting - hoping? - that HSF would be declared unconstitutional, but today's 6-3 ruling leaves the most essential provisions of the law intact. Yes indeed, Scalia dissents!
8 comments:
ACR,
Once again your zealousness blurs your vision of what happened. HSF was gutted... we are not back to bribery-lite... we are back to pre-McNally bribery. From Professerbainbridge.com:
Today, a divided SCOTUS took a hatchet to the honest services statute, using Skilling's case as the vehicle. The opinion held that the statute was not unconstitutionally vague on its face. Instead, as limited to the core set of cases that the pre-McNally case law had criminalized and which Congress intended to restore by passing the statute. Accordingly, the statute properly could be applied to fraudulent schemes to deprive another of honest services through bribes or kickbacks supplied by a third party who had not been deceived.
Because reading the statute to proscribe a wider range of offensive conduct would raise vagueness concerns, however, the Court held that §1346 criminalizes only the bribe-and-kickback core of the pre-McNally case law. Because the prosecutors charged Skilling with conspiring to defraud Enron’s shareholders by misrepresenting the company’s fiscal health to his own profit, but never alleged that he solicited or accepted side payments from a third party in exchange for making these misrepresentations, his undisclosed self-dealing and conflict of interest could not constitutionally be prosecuted as honest services fraud.
full text here:
http://www.professorbainbridge.com/professorbainbridgecom/2010/06/honest-services-fraud-scotus-decision.html
from the SCOTUS blog...
“Honest services” law pared down
Three cases, three rulings; Opinions recapped
Lyle Denniston | Thursday, June 24th, 2010 3:46 pm
Analysis
For nearly a quarter of a century, federal prosecutors pursuing corruption cases — involving public officials and those in private life — have had a broadly worded criminal law available, and they have used it both creatively and expansively. On Thursday, the Supreme Court, while refusing to strike down the law under the Constitution, pared it down to what the majority called its “solid core”: the law may be used only to prosecute bribery or kickbacks. The Court suggested that Congress may want to try to expand the law’s reach, but warned the lawmakers to approach that prospect with constitutional hesitation.
makes sense... if there is a naked quid pro quo, it's pretty hard to argue that a crime hasn't occured. However, if you're an ambitious prosecutor seeking to make your fortune on HSF, you're going to need more than smoke to bring a case. This is a good thing.
Anon (June 25, 2010 2:45 AM):
Anon (June 25, 2010 4:11 AM):
You're one of those that I described as being "hopeful" that HSF would be found unconstitutional. Now that the law hasn't been overturned, you're trying to argue that the SCOTUS decision has de facto overturned it.
The purpose of this post is to demonstrate that (1) Predictions about HSF's demise due to being unconstitutional were premature and (2) That defenses based on Skilling aren't so clear cut. We will have more litigation to define the contours of HSF's prosecutable "bribery and kickback schemes".
Can you at least admit that you were wrong about #1 right now?
~ACR
Court Ruling May Undo ‘Team Abramoff’ Guilty Pleas
June 25, 2010, 6 a.m.
By Jennifer Yachnin
Roll Call Staff
Several former Capitol Hill aides caught in the influence-peddling scandal centered on ex-lobbyist Jack Abramoff could see their guilty pleas undone after the Supreme Court narrowed the scope of a pubic corruption statute Thursday.
The Supreme Court ruled that a federal statute known as the “honest services” law only applies in cases involving bribery or kickback schemes.
Federal prosecutors had previously employed the statute — which makes it a crime to “deprive another of the intangible right of honest services” — in a broad range of public corruption and corporate fraud cases, in part because it provided more legal flexibility than the rigid requirements of charges such as bribery.
In particular, prosecutors obtained numerous plea deals in connection with the Abramoff investigation in which individuals agreed to charges of conspiracy to commit honest services fraud.
But the Supreme Court’s ruling may gut some of those agreements, because the individuals have pleaded guilty to a conspiracy to carry out a crime that no longer exists, several legal experts said.
“They may get a ‘get out of jail free’ card if they wanted to,” said Loyola Law School of Los Angeles“I don’t think the judge will accept the plea to something [the court] determined is no longer a crime,” said Ed MacMahon, attorney for Mark Zachares, a former House Transportation and Infrastructure Committee aide who pleaded guilty in 2007 to one count of conspiracy to commit honest services fraud.
MacMahon said, however, that he and his client had not made a decision Thursday and would continue to consider all available options.
“There’s no evidence Mr. Zachares ever took a kickback or a bribe,” MacMahon said.
Drew Hutcheson, an attorney for Ann Copland, a former aide to Sen. Thad Cochran (R-Miss.) who pleaded guilty in 2009 to one count of conspiracy to commit honest services fraud, said he would also consider the new ruling. “I’ve been looking forward to seeing what the Supreme Court had to say on the subject of the vagueness of the honest services fraud statute, and I’ll look forward to reading their opinion,” Hutcheson said Thursday.
professor Laurie Levenson.
Defense attorney Stan Brand, a former House general counsel, said the ruling would also likely lead to appeals from individuals already convicted under the former law.
“I think there are a lot of people in federal institutions who are going to be filing motions,” Brand said, but he added that the Supreme Court decision will not lead to a reversal in every instance: “Each case is going to be different because it depends what they pled to, what they are convicted of.”
In the meantime, legal experts said the court’s decision would likely prompt federal prosecutors to largely abandon the honest services statute, although several said prosecutors had already been avoiding such charges pending the outcome of the Supreme Court challenges.
The Washington Post reported this morning that Scalia dissented because he thought the entire thing was unconstitutional and HSF shouldn't be narrowed, it should be eliminated. When that's the dissent... it smells like a law gutted to me.
"Justice Antonin Scalia, who has been the court's chief critic of the law, approved of the outcome of the cases but said he would have gone further, and declared it so vague as to violate the Constitution's due-process clause.
He said the majority's "pose of judicial humility" in trying to preserve the statute by turning it into a prohibition of bribes and kickbacks is really just "wielding a power we long ago abjured: the power to define new federal crimes." He was joined by Justices Anthony M. Kennedy and Clarence Thomas."
ACR
I am the one you say was predicting that HSF would be totally invalidated. I admit that RBG was able to coble together a majority who was reticent to directly declare an act of congress so far out there it's blatantly unconstitutional. But this is more of an institutional dynamic than an acknowledgment that HSF was ever legitimate. The fact is RBG basically said, if another crime (which already exists and is clearly deliniated) was committed, then ok, HSF can stay on the field. I think Scalia's disdain for BS and genuflecting to the legislative branch is more responsible.
is it true that team abramoff could get their pleas dismissed because of this ruling? I am concerned because the DOJ may have gone for the low hanging fruit and the likes of Hirni and Boulanger are going to get off scot free because of their prosecutors inexperience and lack of foresight...
from today's Washington Post
Supreme Court was right on 'honest services' law
Saturday, June 26, 2010; A14
"SUPREME COURT Weakens Law Used to Convict Corporate Criminals." "Court sides with ex-Enron CEO."
There would be cause for concern about the Supreme Court's ruling Thursday if you read only the headlines. The Supreme Court did, indeed, strike down an expansive reading of an anti-corruption law and in the process handed significant victories to former Enron executive Jeffrey Skilling, former newspaper baron Conrad Black and onetime Alaska lawmaker Bruce Weyhrauch. But it was right to do so.
The law in question makes it a crime to "deprive another of the intangible right of honest services." All nine justices concluded that the honest-services law was so broad and so vague that it could capture all manner of behavior, including what many reasonable people would not consider criminal. During oral arguments in December, Justice Stephen G. Breyer joked that a government employee reading the racing form during work hours could be put away for violating the law.
That possibility came to an end Thursday with a majority opinion written by Justice Ruth Bader Ginsburg that concluded that only bribery or kickbacks could be prosecuted under the statute. The majority, which included Chief Justice John G. Roberts Jr. and Justice Samuel A. Alito Jr., stopped short of striking down the law in its entirety after concluding that Congress's handiwork should be "construed rather than invalidated" and finding that legislative history and a long line of court precedent indicated that the law was intended to capture bribery and kickbacks. Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas would have struck down the law altogether.
Critics worry that the ruling will encourage questionable and illicit behavior. This fear is likely overblown. The most serious breaches of trust, including bribery and embezzlement, have long been subject to specific criminal strictures; this decision does nothing to weaken those provisions. Some conflicts of interest may now be out of reach of the law, but not every ethical lapse is or should be a federal offense. Employers and voters can still take such infractions into account.
Criminal laws should be clear and precise so that the average person understands what actions would trigger a violation. The honest-services law failed by this simple but important measure and deserved to be struck down.
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