A big test for a big weapon: Honest services fraud
Cliff Groh |
Dec 09, 2009
The federal investigation into Alaska public corruption has already helped elect Sarah Palin Governor, produced legislation that has brought the 49th state's coffers $4 billion in extra oil tax revenues, led directly to the end of the 40-year U.S. Senate career of Ted Stevens, and generated controversy about the way federal prosecutors provide evidence to criminal defendants. Now the "POLAR PEN" probe may help lead to a major change -- or even the elimination -- of a significant weapon the federal government uses to fight public corruption. This morning [12/8] the U.S. Supreme Court heard oral arguments on the case of ex-State Rep. Bruce Weyhrauch (R.-Juneau). The former legislator solicited a job with the oilfield-services company VECO and then allegedly took official actions -- including changing his vote on an oil-tax matter VECO cared greatly about -- without disclosing his interest to the legislature. A grand jury indicted Weyhrauch in 2007 for "honest services fraud" as well as other crimes, but his trial was derailed when the District Court judge ruled that the prosecution could not introduce evidence of Weyhrauch's failure to disclose his employment negotiations with VECO because no state law required a legislator to make such a disclosure. (At this point I need to make my own disclosure: I have known Bruce Weyhrauch for almost 30 years and worked with him during the period I had probably the most fun ever on a job; although, I have never discussed this case with him.) Weyhrauch's is one of three cases the Supreme Court has taken this year that concern the federal statute that makes it illegal to use the mails or other interstate communications systems for a scheme to defraud, including a scheme to "deprive another of the intangible right to honest services." Although brief and seemingly even modest, that law packs a powerful punch. The "honest services fraud" statute is a main -- maybe the main -- law the federal government uses to charge people with crimes related to public corruption. Other prominent public corruption cases involving this law include prosecutions of convicted überlobbyist Jack Abramoff and former Illinois Gov. Rod Blagojevich, who still awaits trial. The Justice Department has also employed the statute to go after a number of big-name corporate defendants, as shown by the Supreme Court's decisions to hear the appeals of convicted media mogul Conrad Black and former Enron CEO Jeffrey Skilling. Black's oral argument was also this morning -- just before Weyhrauch's -- and Skilling's will occur next spring. Along with being important, this law is also highly controversial. Prosecutors and government watchdog organizations argue that the law is needed because it's hard to prove that a public official took a specific official action as a quid pro quo for a specific bribe, and that without this law it would be difficult to eradicate the cozy culture of favors and gift-giving between public officials and lobbyists. The Washington Post reported before the oral argument that the Citizens for Responsibility and Ethics in Washington (CREW) said the law is an "indispensable prosecutorial tool for fighting public corruption." (The newspaper also noted that CREW asserted that the feds need to be active in bringing public corruption cases against state and local officials because "state prosecutors may be reluctant to bring charges against their political allies or supporters.") Critics, on the other hand, contend that the law is vague and over-broad -- that is, it's hard for anybody to know what is illegal. One of the most vocal critics of the statute is Supreme Court Justice Antonin Scalia, who has written that the provision "invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators and corporate CEO's who engage in any manner of unappealing or ethically questionable conduct." Justice Scalia wrote last year that the law was so loose that it could be interpreted to "cover a salaried employee's phoning in sick to go to a ballgame." Judging from the transcript of the oral argument in the Weyhrauch case and early reports on the oral argument on Black's case, it appears that the Court is sympathetic to the critics.
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