SCOTUS Decision Attacks 'Honest Services' Law

The right is often so concerned with maintaining scrupulous standards of probity that during criminal proceedings involving friends and allies they vanish, fearful of getting their own spotless white togas spattered with mud. Further, too often the right ignores the seamier side of criminal law.

I am not suggesting that the proper course in such cases is to join in a chorus attacking and smearing those who’ve made the accusations, or to bespatter prosecutors as Ken Starr was. But I do suggest that they maintain a vigilant eye on the proceedings, and maintain their loyalty until the facts are fully known.

Also, that they pay more attention and offer more resistance to the growing problem of prosecutorial overreach than they have, rather than simply assuming the propriety of the proceedings.

With few joining me, I have written repeatedly of the outrageous behavior of Patrick Fitzgerald. Fitzgerald succeeded in so poisoning the jury and public opinion with his extrajudicial statements and so manipulated evidence before the trial court that he got the innocent Lewis Libby convicted. Libby was a man targeted, I believe, by opponents of the prior administration who considered him a proxy in their bureaucratic wars against Bush and Cheney.

That behavior continued in Fitzgerald’s treatment of Conrad Black and his hapless Hollinger general counsel, Mark Kipnis. Now, it continues against former Illinois Governor Blagojevich, who was removed from office on the basis of the prosecutor’s conduct before he was found guilty of anything. This is a prosecutor who, having seen the likely direction the Court was heading on the question of “honest services,” was forced to add other charges against the governor to account for the likelihood that the honest services charges would be thrown out.

What is the “honest services” provision? It’s a simple, less than 30-word addition to the federal mail fraud statute:

§ 1346. For the purposes of this chapter, the term “scheme or artifice to defraud” includes a scheme or artifice to deprive another of the intangible right of honest services.

Last week, the “honest services” arrow in the prosecution’s quiver was severely blunted by the Suprme Court when it reversed three convictions based on that law.

By a majority, the Court — in the Skilling case, which it then applied to the Black and Weyhrauch cases — held (Ginsburg) that the statute is “properly confined to include only bribery and kickback schemes.” Three justices (Scalia, Thomas, and Kennedy) dissented on the grounds that the statute was too vague to meet constitutional muster, that the law in its entirety had to be ruled unconstitutional, and that the majority restriction to bribery and kickback which appears nowhere in the language of the act was simply drafting legislation “all on its own.”

It was Justice Scalia who first sounded the alarm about the vague meaning of the 1988 “honest services” statute and the unconstitutionality of letting it stand where it could, and was, being used by ambitious prosecutors to target behavior which came under no specific criminal statute.

Last year, in Sorich v U.S., he said:

[T]his Court has long recognized the “ basic principle that a criminal statute must give fair warning of the conduct that it makes a crime.” Bouie v. City of Columbia, 378 U. S. 347, 350 (1964). There is a serious argument that §1346 is nothing more than an invitation for federal courts to develop a common-law crime of unethical conduct. But “the notion of a common-law crime is utterly anathema today,” Rogers v. Tennessee, 532 U. S. 451, 476 (2001) (SCALIA, J., dissenting), and for good reason. It is simply not fair to prosecute someone for a crime that has not been defined until the judicial decision that sends him to jail. “How can the public be expected to know what the statute means when the judges and prosecutors themselves do not know, or must make it up as they go along?” Rybicki, supra, at 160 (Jacobs, J., dissenting).

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It may be true that petitioners here, like the defendants in other “honest services” cases, have acted improperly. But “[b]ad men, like good men, are entitled to be tried and sentenced in accordance with law.” Green v. United States, 365 U. S. 301, 309 (1961) (Black, J., dissenting). In light of the conflicts among the Circuits; the longstanding confusion over the scope of the statute; and the serious due process and federalism interests affected by the ex-pansion of criminal liability that this case exemplifies, I would grant the petition for certiorari and squarely confront both the meaning and the constitutionality of §1346. Indeed, it seems to me quite irresponsible to let the current chaos prevail.

What the judge was saying is something we all should have learned in high school civics class: it is for the legislature to define criminal behavior, for the courts to interpret what those statutes mean, and for the prosecutor to enforce those laws. It turns the entire concept of fair play and the Constitution’s federalist scheme upside down when the legislation is so vague that the prosecution can say that it means whatever it chooses it to mean.

But that’s not the half of it. Typically in these cases, the prosecution charges numerous counts. They often involve detailed and complex transactions beyond the understanding of the normal jury, and add the honest services count so that the jury — convinced at the end of the ordeal that the rich and/or powerful men in the dock must be guilty of something — fix on that vague count. It ignores that political leaders and business executives must often make decisions based on the advice of the staff professionals and the facts available at the time.

The determination of what is proper and lawful may, in complex matters, often be ambiguous. Thus, it is particularly important that the criminal statutes be specific, not vague, which invites paralysis on one hand and criminal jeopardy on the other.

Mark Steyn liveblogged the Black (and Kipnis) trial where the nub of the case was the prosecution’s contention that the non-compete agreements made in Canada were in accord with the law there, and (the defense said) for tax reasons were efforts by Black to enrich himself at the expense of his shareholders. It seemed obvious to Steyn’s readers that the issues were so complex and above the heads of the jury — and the prosecution so insidiously demonizing the very wealthy defendant — that even though the jury dismissed nine of the thirteen counts against Black it seemed they thought he ought to receive some punishment. They settled on the claim that he’d deprived his stockholders of his “honest services.”

Writing after the Court’s opinion overturned Black’s conviction, Steyn said:

For a start, this would not have been a criminal case in any other advanced Western democracy. Second, the pressure the SEC and U.S. Attorney can bring to bear on almost anyone around the accused tips the scales against a fair trial (the threat of “Wells letters” to fading A-listers dependent on corporate directorships for their livelihood, etc.). Third, the combination of a jury box plus dozens of charges makes it an easy temptation for jurors to split the difference and acquit on most but convict on just enough to destroy your life.

Conrad will regain his liberty but he will never get his life back. For the rest of us, it’s worth noting that, even before the industry’s recent difficulties, very few people know how to run newspapers. Conrad did. The Chicago Sun-Times, The National Post and the Southam papers in Canada, the Telegraph Group in London, and many others are all worse without him.

Meanwhile, the man appointed to “clean up” Conrad’s company, Richard Breeden, is on course to become the world’s first corporate-governance billionaire. Funny, that.

I want to underscore this for you. The prosecutor, whose biography indicates no experience in business, decided what business practices Black and Kipnis should have applied even though the ones they used were legitimate and (they testified) common in Canada where they occurred.

The prosecutor (Fitzgerald) then had a trustee appointed who took over the management of these profitable companies. Under his oversight the Hollinger papers have been run into the ground, but the court appointed trustee received huge compensation for his work, while Kipnis and Black — who profitably managed these businesses — sit in jail.

Contemplate that.

Surely animus to the defendant and a vague sense by the jury that he’d done something wrong to warrant prosecution figured in the Weyhrauch conviction as well. Weyhrauch was one of four Republican office holders in Alaska whose activities were being scrutinized by a special investigative team. Four were convicted, including Senator Ted Stevens and Weyhrauch, and all four convictions have now been overturned or reversed. The Kafkaesque nature of the prosecution is detailed in this news account:

Federal prosecutors alleged Weyhrauch solicited legal work from the oil-field service company Veco Corp. at a time when Veco was pushing hard to win support for lower oil taxes in the state Legislature. Federal prosecutors said Weyhrauch should have disclosed his job search as a conflict of interest.

Weyhrauch’s attorneys argued that state law didn’t specifically require such disclosure and, as a result, the federal fraud statute couldn’t be used to charge him with defrauding Alaskans of his honest services.

A federal judge in Alaska agreed with Weyhrauch, but the government appealed and won in the 9th Circuit U.S. Court of Appeals. The appeals court sided with prosecutors, saying legislators had a duty to disclose such conflicts. The court reasoned that even if a state has weak ethics laws, it was no reason for its citizens to be deprived of the honest services of their public officials.

There you have it. The prosecutors didn’t like what he did. Didn’t think it ethical and therefore even though there was no Alaska law against it, they and the feckless Ninth Circuit decided to craft their own law making it a crime.

(In the meantime we await the long overdue report on the clear malfeasance of the Department of Justice team that prosecuted Ted Stevens and surely resulted in the end of his long senatorial career.)

Last December at the Volokh Conspiracy, Harvey Silverglate signaled his belief that the Court would do something about this statute (Honest Services Fraud: Your Third Felony Today?):

If you’re asking what this statute means, you’re in august company: Justice Antonin Scalia asked the very same question during oral argument in Black v. U.S. (see pg. 45 of the transcript [PDF]). All told, eight of the nine justices expressed skepticism about the “honest services” law, focusing on the vagueness that prosecutors have exploited but defendants and civil libertarians have loathed.

Most pointedly, perhaps, was Justice Stephen Breyer’s observation that almost any professional could inadvertently violate this statute. “[T]here are 150 million workers in the United States. I think possibly 140 [million] of them would flunk your test,” he told Deputy Solicitor General Michael R. Dreeben, who was attempting to posit arguable limiting principles.

Breyer’s observation goes to the heart of the phenomenon about which I’ve written in my book, Three Felonies a Day: How the Feds Target the Innocent. Because of the vague terminology increasingly used in the ever-expanding federal criminal code, combined with the erosion of intent as a requirement for conduct to be considered prosecutable, the average citizen can easily commit several felonies in any given day. (Interviewers have jostled me for what they deemed my wild overstatement, while I’ve tried to assure them that their own daily conduct probably produces three arguable felonies. Now I have one justice — and perhaps several more — on my side.)

“Honest services” fraud is an instructive example of this trend, but the federal law books are cluttered with countless others. Creative interpretations of the Computer Fraud and Abuse Act, obstruction of justice statutes, and controversial Patriot Act provisions — to name a few — have turned honest citizens into federal defendants and even convicted felons.

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[I]n the aftermath of the modern-day explosion of federal statutes and regulations covering almost every area of American life, these doctrines have not been applied with equal rigor. In a system that operates like this, more and more innocent conduct gets swept into the category of arguable crime — not by clear legislation, not by careful and honest court examination, but by assumption and acquiescence.

This dangerous trend is exacerbated by the “win at all costs” mentality of the Justice Department. Colleagues are turned into stool pigeons as prosecutors offer deals for testimony that often bears little resemblance to the truth. (As my colleague Alan Dershowitz colorfully but all-too-accurately puts it, “prosecutors can pressure witnesses not only to sing, but also to compose.”)

The Court’s rulings in these three cases are a step toward correcting the increasingly dangerous trend in federal prosecutions. Now, it’s time to trim the obstruction and conspiracy laws, institute some better oversight of prosecutors, and start reviewing other vague federal criminal statutes.