Legal News

If Honest-Services Law is Struck, Will an ?Earthquake? Ensue?

By Ashby Jones

The days of the honest services fraud law — for years a go-to statute for federal prosecutors — appear likely to be numbered.

The Supreme Court on Tuesday expressed deep skepticism about the law, suggesting it was too vague to be constitutional. Click here for Jess Bravin’s story in the WSJ; here for the NYT story; here for the take from the NYT’s Adam Liptak; here for the WaPo story; here for the LAT story. Click here here and here for previous LB posts on honest-services.

The court’s questioning came as it heard appeals by former publishing magnate Conrad Black and a former Alaska state legislator. Both were charged with violating the federal law that prohibits schemes to “deprive another of the intangible right of honest services.”

Justices across the court’s ideological spectrum seemed in agreement that the concept of honest-services fraud was so broad as to sweep almost any white lie or self-serving act into the purview of prosecutors.

The case teed up for the justices on Tuesday involved two defendants, Conrad Black and Bruce Weyhrauch. Black was convicted of arranging a questionable series of transactions that funneled millions of dollars out of newspaper publisher Hollinger International and his other companies into his pocket.

Weyhrauch, a former Alaska lawmaker, was implicated in the investigation that also snared former U.S. Sen. Ted Stevens (R., Alaska). Prosecutors allege that Weyhrauch voted for bills and took other steps to advance the legislative agenda of oil-services provider Veco Corp. while privately seeking promises of legal work from the company when his term ended.

At oral arguments on Tuesday, the justices’ questions suggested they didn’t think the honest-services law was drafted so that that the line between criminal conduct and lawful activity is adequately clear.

In one example, Justice Stephen Breyer imagined an employee distracting his supervisor with small talk “so the boss will leave the room so that the worker can continue to read the Racing Form.”

“Explain it to me how your test does not make this statute potentially criminalizing 100 million workers in the United States,” Justice Breyer continued.

According to Liptak, the justices allowed Conrad Black’s lawyer, Miguel Estrada, “to speak for long stretches, which is unusual, and the tone of the argument was more brainstorming session than oral advocacy, with several justices and Estrada trying to identify the smartest way to fix the law.”

In the first of the two hour-long arguments, writes Liptak, Estrada was asked only about 25 questions; his adversary, Deputy Solicitor General Michael R. Dreeben, was asked more than 60.

And if the law is struck down in full? Expect defendants convicted under the law to rush the courthouse door. Striking down the honest-services crime would trigger “an earthquake within the criminal justice community,” said David Seide, a former federal prosecutor now with Curtis Mallet-Prevost Colt & Mosle LLP in Washington. Defendants convicted under the statute “will be able to say their convictions need to be reversed,” he said.

Full post as published by Law Blog - WSJ.com on December 09, 2009 (boomark / email).