Tag: honest services

What is Bribery in a Post-Skilling World?

January 18th, 2011

The Paul Minor case (see here) may flesh out some of the questions left unresolved by the Court ruling inSkilling. Across the country we are seeing cases being reexamined to determine whether the conduct, indictment, jury instructions, and trial focused on "bribery or kickbacks" – the one permissible activity for "honest services" in the fraud statute – 18 USC 1346. In this regard, in the Paul Minor case we see several interesting issues – 1) Does the Mississippi bribery law meet the Skilling Court's test of "a uniform national standard,"; and 2) How should a court factor in that the prosecution used "concealment" and "self-dealing" in the indictment and closing argument as opposed to terms that would represent bribery. The high powered lineup to present these issues are: Ted Olson and David Debold of Gibson, Dunn & Crutcher.

Motion to Vacate Convictions –Download Motion to Vacate

Memo in Support of Motion to Vacate Convictions-Download Motion to Vacate – Memo

Government Response – Download 46738335-US-Response-to-Paul-Minor-s-lastest-motion-to-dismiss-010711

(esp)
Ryan Denied Skilling Relief and Bail

December 21st, 2010
A US District Court for the Northern District of Illinois- Eastern Division, denied former Illinois Governor George H. Ryan Sr.'s request of Skilling relief and "bail pending the ultimate resolution of this motion." In a 59 page order here, the court held:
- The Skilling decision "announces a new substantive rule of criminal law" allowing the "re-set[ting] the clock for filing [ ] post-conviction" relief.
- Ryan's "conduct for which he was convicted – steering contracts, leases, and other governmental benefits in exchange for private gain – was well-recognized before his conviction as conduct that falls into the 'solid core' of honest services fraud."
- Claiming improper jury instructions, the court finds "that the Bloom instruction, the conflict-of-interest instruction, and the state law instructions should not have been given" but then holds the error as harmless.
- Page 42 et seq. of the opinion has a wonderful footnote (# 14) and text that reviews relevant post-McNally and Skilling holdings.
- The court rejects any spillover effect of Ryan being prejudiced "by the admission of evidence that would not have been admissible in a post-Skilling honest services fraud prosecution."
But the saddest part of this decision is that the court fails to grant bail to Ryan pending the resolution of this motion despite acknowledging "the sad news that his wife of more than fifty years is suffering from a terminal illness." This is particularly troubling as the court notes that Ryan "poses no risk of recidivism nor danger, were he to be released." Sometimes the law is very cold to humanity and this is sad.

(esp)
Can You Convict for Honest Services When You Haven’t Charged Honest Services?

December 17th, 2010

According to the 8th Circuit Court in the case of United States v. Redzic, the answer to this question is "yes." The defendant was convicted of mail fraud, wire fraud, bribery, and conspiracy. The mail fraud and wire fraud charges were premised upon sections 1341 and 1343, not 1346. The defendant notes on appeal that he had been indicted, that the government's argument at trial, and that the jury instructions at trial all pertained to a defrauding of property under 1341 and 1343. The problem was that the property in this case happened to be licenses and as previously held in the Cleveland case, regulatory licenses are not property for purposes of mail fraud. So the government's response is – well then let's call this honest services. But there appears to be one problem in doing that - they failed to charge the case this way.

The 8th Circuit holds "[w]hile we believe it would have been preferable in Redzic's case for the indictment to have included the term 'honest services,' its omission was not fatal."

To put this all in context – this opinion is a post-Skilling remand. And yes, the 5th Cicuit held in United States v. Griffin, 324 F.3d 330 (2003):

There is no doubt that the district court erred by instructing the jury that a scheme to defraud includes "a scheme to deprive another of the intangible right to honest services" because the indictment did not contain a reference to 18 U.S.C. § 1346 or its language. And, that error was obvious. Furthermore, we can not permit the district court to second guess "what was in the mind[ ] of the grand jury at the time [it] returned the indictment." Russell,369 U.S. at 770, 82 S.Ct. 1038. To do so would violate the Appellants' Fifth Amendment right to indictment by a grand jury and undermine the public's faith in the integrity of our judicial proceedings.

I wonder what Justice Scalia will think about the 8th Circuit's decision in Redzic?

(esp) (with a hat tip to Dane Ball)
Kevin Ring Convicted Yet DOJ Wants More in an Honest Services Statute

November 15th, 2010

According to a DOJ Press Release, "a federal jury in Washington convicted Kevin A. Ring, a former lobbyist who worked with Jack A. Abramoff, on five counts related to a scheme to corrupt public officials by providing a stream of things of value." The Press Release states that:

"The jury found Ring guilty on one count of conspiring to corrupt congressional and executive branch officials by providing things of value to them and their staff in order to induce or reward those who took official actions benefitting Ring and his clients. In addition, Ring was convicted of one count of paying a gratuity to a public official and three counts of honest services wire fraud for engaging in a scheme to deprive U.S. citizens of their right to the honest services of certain public officials. The jury acquitted Ring on three counts of honest services fraud. A previous federal jury failed to reach a verdict in the case and the court declared a mistrial."

Interestingly, this verdict comes on the heels of a response by Assistant AG Lanny Breuer to a question by Senator Patrick Leahy, where Breuer claims that there is a need to revise the honest services statute post Skilling. The Court's decision in the Skilling case had limited honest services to "bribery and kickbacks." Breuer's first answer to a question posed to him tells of two cases where honest services premised on self-dealing was charged – but in both instances he says that it was in addition to bribery charges. If bribery was present in these two cases, then why should Congress revise the mail fraud statute? DOJ fails to present a specific need for this legislation.

Breuer then proceeds to state that "without a legislative fix, it will be more difficult and, in some instances, impossible to prosecute federal officials, as well as state and local officials for significant corrupt conduct." See letter –Download Breuer_Answers But he can provide no cases and his reasoning for not using existing statutes like section 208 is because this statute is not a predicate for a RICO charge, while mail fraud does serve this function. Is Assistant AG Breuer telling us that he can't circumvent the limits of RICO without this mail fraud fix? Is he saying that Congress should extend a statute so that he can get around congressional intent in the RICO statute? It's also, he says, because he needs honest services as a predicate for Title III wiretaps. Here again is he saying that he can't circumvent the limits of Title III wiretaps without having a loose mail fraud statute that allows DOJ to use and abuse their discretion.

With a conviction in the Ring case, it is hoped that the Senate will look closely at the rationale offered by DOJ for needing to expand the honest services provisions of the mail fraud statute. It is also hoped that DOJ will think twice about allowing the possible use of mail fraud to circumvent the existing RICO and wiretap mandates. It is a sad day when prosecutors ask for more power in a statute so that they can use it to circumvent existing laws.

(esp)
Honest Services Update

September 7th, 2010

Kim Chandler, The Birmingham News, Don Siegelman and Richard Scrushy ask court to dismiss honest services fraud charges against them; Bob Johnson (AP), Tuscaloosa News.com, Siegelman asks appeals court to dismiss charges; Margaret Cronin,Bloomberg, HealthSouth's Scrushy Loses His Bid for Early Release Pending Court Review

Edvard Pettersson, Business Week, Enron’s Skilling to Remain in Prison During Appeal, Court Rules ; Reuters, Judge denies bail for former Enron CEO Skilling-court document

Roxana Hegeman, WTOP.com, Prosecutors drop case against former Westar execs; law360,Citing Skilling, Prosecutors Drop Westar Case (Subscription required)

Victoria Pynchon, Forbes, On the Docket, Zach Scruggs Asks Court to Vacate “Earwhigging” Conviction; U.S. v. David Zachery Scruggs, Defendant's Memorandum of Authorities In Support of HIs Motion to Vacate His Conviction Pursuant to 28 USC 2255

Bill Estap, Kentucky.com, Prosecutor Moves to Set Aside Convictions in part of Clay Co. case

Peter Lattman, NYTimes, Fraud Ruling Is Reshaping Federal Cases (hat tip to Tiffany Joslyn)

Fox Chicago News, Former Gov. George Ryan Asks Court to Invalidate Conviction on Basis of 'Honest Services' Decision

Joseph P. Ganim – Supplement to Request for Certificate of Appealability - Download Supp CA 8 19 10; Second Circuit Order – Download 2d C. Order

North NewJersey.com, Sen Joseph Coniglio's bid for bail is shot down by judge

Kevin Ring case – Ken A. Ring's Revised Motion for Judgment of Acquittal - Download 07-19-2010 RING Revised MJOA (DE 155); United States Response to Defendant Ring's Revised Motion for Judgment of Acquittal –Download 07-27-2010 US Response to Def_s Revised MJOA (DE 161); Kevin A. Ring's Reply in Support of his Revised Motion for Judgment of Acquittal – Download 08-03-2010 RING Reply in Support of Revised MJOA (DE 168)

NACDL has created an Honest Services Fraud Filings Decisions Bank for its members here (password protected).

(esp)
ABA/NACDL Program: The Supreme Court Rules On Honest Services Fraud

July 9th, 2010

The ABA Criminal Justice Section White Collar Crime Committee

Public Corruption Subcommittee and

The National Association of Criminal Defense Lawyers

Invite you to join them for:

Judgment Day: The Supreme Court Rules On Honest Services Fraud

Understanding the Outcome and Its Ramifications

Presenters: Abbe David Lowell - McDermott Will & Emery; Timothy P. O'Toole – Miller & Chevalier; Ellen S. Podgor – Stetson University College of Law; Cynthia Hujar Orr – President, NACDL

Moderator – Ross H. Garber – Shipman & Goodwin LLP

This program will examine the Supreme Court’s much anticipated ruling on the federal “honest services fraud” statute, 18 U.S.C. § 1346, and the ramifications it will have on public corruption prosecution and defense. This highly experienced panel will evaluate the new state of the law and explore the ruling’s impact on pending cases.

July 14, 2010

4 p.m. – 6 p.m. EDT

American Bar Association
740 15th Street, N.W., Washington, D.C.

John Marshal Conference Room, 9^th FL

Wine and light fare will be served.

Please RSVP to snoddyr@staff.abanet.org if you plan on attending.

(esp)
Open Questions Post Skilling Related to the Honest Services Issue

June 29th, 2010
As a result of the Skilling decision see here, here, here, here, and here, many questions are left for consideration by lower courts and perhaps Congress and the Supreme Court in future cases. What are some of these questions:
- Can Congress rewrite a statute that would pass constitutional muster? (but perhaps they should think twice about doing this – see here)
- Did the Court engage in interpretation or invention?
- What cases will require reversal as a result of the holding in Skilling (e.g., Will Governor Ryan's conviction stand?)
- Are there other available statutes to prosecute conflicts of interest and self-dealing?
- When does harmless error require a reversal of a case that alleged honest services?
- The Court in footnote 37 notes the disagreement of lower courts on whether one has to violate state law, is this now an irrelevant question?
- The Court limits "bribery and kickbacks" to the "core of the pre-McNally case law. What does this include?
- Does the Rule of Lenity only apply after the Court has made its interpretive (inventive) decision?
- The Court states that its definition only covers "serious culpable conduct." Does this mean that minor frauds cannot be prosecuted under the honest services provisions?
- Does the Court really set up a "uniform national standard" for honest services, and therefore can state law not be used to determine whether it is a bribery or kickback?
- If the Court says you use pre-McNally caselaw on bribery and kickbacks, how do you interpret conflicting opinions by lower courts?
- What does bribery mean? The Court references 201 (b) and not (c), so is bribery limited?
- In footnote 46 the Court refers to state and local corruption – but what statutes get included here?
- Has the Court redefined what constitutes vagueness for purposes of statutory interpretation?
- In adopting a position expressed by a law professor in an amicus brief, is the Court saying that law professors should focus on writing amici briefs and not law review articles?
(esp)
Skilling – Commentary

June 24th, 2010

It was a Thanksgiving Day turkey carving by the Court, and they left a lot more meat on the bones then many imagined.

Will We See More Government Stretching? The Court says, "[a]s to arbitrary prosecutions, we perceive no significant risk that the honest-services statute, as we interpret it today, will be stretched out of shape." Gosh I hope they are correct. Based upon the DOJ's track record, that has not been the case. They started the ball rolling with intangible rights well before the Supreme Court knocked it out in 1987. And even when raised as an issue in these three cases, the government argued for more to be included in the statute's sphere.

Should Congress Rewrite the Statute? The Court said – ""The 'vast majority' of the honest-services cases involved offenders who, in violation of a fiduciary duty, participated in bribery or kickback schemes." - This should be a statement Congress should look at when and if the government takes up the Court's second invitation to rewrite the statute.

What happens now? We saw that after the McNally case crushed the government's intangible rights theory, many cases required interpretation to see if they deserved to be tossed, or whether they could survive the holding. In the next few weeks and months, we are likely to see a good number of these type of arguments being made.

Will DOJ learn from this? They have bribery, they have mail fraud and wire fraud with money or property, and they have section 666 for the state/local officials. The government has plenty of tools to prosecute crime. The question is whether they will be happy with what they have, or instead decide that they want to try for more.

(esp)(blogging from Lisbon, Portugal)
Interpretation or Invention – Key Aspects of the Honest Services Portion of the Skilling Opinion

June 24th, 2010

Check out the prior posts of Solomon Wisenberg here, here, and here, that include summary and links to the three decisions. Looking at Skilling specifically, here are some important items to note from the decision-

1. As discussed by Attorney Tim O'Toole in an NACDL press conference – the Court rejects the government's attempt to include a third category beyond bribery and kickbacks, that category being "undisclosed self-dealing by a public official or private employee."

2. The Court states – "The 'vast majority' of the honest-services cases involved offenders who, in violation of a fiduciary duty, participated in bribery or kickback schemes."

3. The Court states – "Reading the statute to proscribe a wider range of offensive conduct, we acknowledge, would raise the due process concerns underlying the vagueness doctrine."

4. Is it judicial legislating when the Court states in footnote 43 – "Apprised that a broader reading of §1346 could render the statute impermissibly vague, Congress, we believe, would have drawn the honest-services line, as we do now, at bribery and kickback schemes."

5.Footnote 45 – the Court tells Congress if it really wants to include "self-dealing" there needs to be a whole lot of questions examined first.

6. The Court says, "Its prohibition on bribes and kickbacks draws content not only from the pre-McNally case law, but also from federal statutes proscribing—and defining—similar crimes. See, e.g., 18 U. S. C. §§201(b), 666(a)(2); 41 U. S. C. §52(2)." John D. Cline noted in the NACDL Press Conference how the Court used section (b) of the bribery statute, but did not include (c) which is the gratuities section.

7. The Court says in footnote 46 that "[o]verlap with other federal statutes does not render s1346 superfluous." The Court then notes how section 201 only applies to federal public officials. What about section 666, a section they mentioned previously (see note above)

Concurring opinion of Scalia, Thomas and Kennedy –

1. They say – " in transforming the prohibition of honest services into a prohibition of 'bribery and kickbacks" it is wielding a power we long ago abjured: the power to define new federal crimes."

2. In speaking to the Court's allowing bribery and kickbacks to remain within the statute, the three justices state that "arriving at that conclusion requires not interpretation, but invention." They later remark – "the Court today adds to our functions the prescription of criminal law." They also state "that is a dish the Court cooked up all on its own."

(esp)(blogging from Lisbon, Portugal)
More on Honest Services and Skilling

June 24th, 2010

GUEST BLOGGER-SOLOMON L. WISENBERG

The breakdown is as follows. All nine justices agree that the judgments in the three honest services fraud cases must be vacated and remanded. The majority rules that Section 1346 honest services fraud encompasses only bribery and kickback schemes, and would be unconstitutionally vague if interpreted more broadly. The majority opinion in Skilling (and Black) is written by Justice Ginsburg, who is joined by five other justices. Justice Scalia (joined by Justices Thomas and Kennedy) concurs, but would simply hold Section 1346 unconstitutionally vague under the Due Process Clause and would not seek to salvage it through a narrowing interpretation.

The jury instructions in all of the cases allowed for conviction under the now-discredited broad view of honest services. The lower courts must decide whether the instructional errors were harmless.

Jefffrey Skilling's fair trial arguments were rejected 6-3, with Justice Sotomayor, joined by Justices Stevens and Breyer, dissenting.

Conrad Black and co-defendants properly preserved their objections to the jury charge.

All of this is based on my quick skim. More detailed analysis will come later.

Once more, here are the slip opions in Skilling, Black, and Weyhrauch.

(slw)