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Friday, June 25, 2010

Confusion Reigns in Wake of Supreme Court Rulings on Honest-Services Fraud

The United States Supreme Court yesterday issued three rulings that limited the scope of the federal honest-services fraud statute. The rulings are of particular interest here at Legal Schnauzer because the statute in question was at the center of the Don Siegelman (Alabama) and Paul Minor (Mississippi) prosecutions, which we have covered extensively.

Defense attorneys had argued that the honest-services statute is hopelessly vague, allowing prosecutors to criminalize standard political behavior. Yesterday's Supreme Court rulings clearly limit use of the statutes to situations involving bribes or kickbacks. But those who were hoping for clarity from the Supreme Court almost certainly were disappointed.

The waters surrounding honest-services fraud remain muddy, so much that it remains unclear what, if any, impact yesterday's rulings will have on the Siegelman and Minor cases.

Thursday's rulings revolved around former Enron official Jeffrey Skilling, former newspaper magnate Conrad Black, and former Alaska legislator Bruce Weyhrauch. So what actually happened? Here is how David Savage of The Los Angeles Times describes it:

In ruling on "honest-services fraud," the justices said Skilling and Black were wrongly convicted on that charge. All nine justices agreed that such fraud was too vague to constitute a crime unless a bribe or kickback was involved. But both men were convicted on other charges, and the Supreme Court sent their cases back to lower courts for further proceedings.

What about the third case? Savage writes:

In a case from Alaska involving a former state legislator, Bruce Weyhrauch was charged with fraud for having contacted a firm about a possible job for after he left the Legislature. He did not get the job, but he voted on a bill that was favorable to the firm. A federal appeals court ruled he could be convicted of a crime based on this undisclosed conflict of interest. However, the Supreme Court reversed that decision Thursday in a third of the three rulings limiting the scope of honest-services fraud.

Where does that leave supporters of the defendants in the Siegelman and Minor cases? Confused mostly. A headline in today's Birmingham News states: "Ruling Could Help Siegelman Appeal." That, unfortunately, is misleading.

Reporter Mary Orndorff quotes a Siegelman lawyer as saying Thursday's rulings do not address the statute in the campaign-contribution context, so that might enhance the chances of the high court hearing Siegelman's appeal.

That might be the case. But honest-services fraud no longer is a factor in Siegelman's case--at least for him personally. As we reported back in December, the U.S. 11th Circuit Court of Appeals already has overturned the honest-services fraud convictions against Siegelman, so that no longer is a direct issue in his case. The counts that were upheld against Siegelman involved mainly bribery.

To make matters even more murky, however, the honest-services convictions against Richard Scrushy, Siegelman's codefendant, were upheld. So the statute does remain a factor in the broad Siegelman case. Here is how we described it earlier:

The U.S. 11th Circuit Court of Appeals overturned the honest-services fraud convictions against Siegelman, so that no longer is an issue in his case. His appeal to the U.S. Supreme Court involves bribery and obstruction of justice.

The 11th Circuit upheld the honest-services fraud convictions against Scrushy, so the cases currently before the U.S. Supreme Court could have an impact on his appeal.

Yesterday's SCOTUS rulings could have a more direct impact on the Paul Minor case. That's because the U.S. Fifth Circuit Court of Appeals ruling in that case was exactly the opposite of what happened on the Siegelman appeal in the 11th Circuit--it threw out the bribery convictions but left the honest-services fraud convictions in place.

Former U.S. Solicitor General Ted Olson is handling the Minor appeal for the U.S. Supreme Court, and here is his statement in the wake of yesterday's rulings:

The decisions today in the Skilling and Black cases reflect the Court's well-founded concerns about the vague and overbroad language of the honest services statute. I am pleased that the Court took this opportunity to narrow the scope of the virtually limitless statutory language. Mr. Minor's case will afford the Court another opportunity to impose meaningful limits on the honest services statute and to ensure that the statute is not used to punish political speech fully protected by the First Amendment.

An Associated Press report states that the high court is expected to announce on Monday whether it will hear appeals from Siegelman and Scrushy. It's unclear when an announcement might be made regarding the Minor appeal.

This much is clear: As we have shown in numerous posts, the defendants in both the Siegelman and Minor cases were wrongly convicted, and it's not a close call. At the district-court level, the cases never should have gone to juries. At the circuit-court level, the convictions should have been overturned completely.

In other words, the U.S. Supreme Court should not be fooling with the Siegelman and Minor cases. All defendants should have been free months ago. The real issue in the Siegelman and Minor cases is not the vagueness of the honest-services law, but the corruptness of the federal prosecutors and judges who handled the cases.

That's the real elephant in the room in these cases--and the U.S. Supreme Court probably wants no part in addressing that. It should be addressed by Congress and the U.S. Justice Department. Until that happens, justice will not be fully served.

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