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December 8, 2009

SCOTUS seems prepared (and perhaps eager) to knock down "honest services" fraud

This report from the Los Angeles Times on today's SCOTUS oral arguments concerning "honest services" fraud suggests that some white-collar prosecutions may soon have to look very different:

The Supreme Court justices gave a highly skeptical hearing today to government lawyers defending the key anti-corruption law that makes it a crime to deprive an agency or employer of their "honest services."

The justices took turns suggesting the law is too vague and open-ended and fails to spell out what is a crime. Justice Antonin Scalia called the law a "mush." It is like, he said, a law that says, "Every bad act is a crime." It gives prosecutors and judges a free hand to decide what constitutes a crime but fails to warn ordinary citizens, he said.

During two hours of argument, most of the other justices sounded the same theme. Justices Stephen G. Breyer and Chief Justice John G. Roberts Jr. suggested several times the law might be unconstitutional because it is so vague. "A citizen is supposed to be able to understand the law," Breyer said, yet it is unclear what this law brands a crime.

In recent years, prosecutors have used the law against "honest services fraud" as their favorite weapon against public corruption and, sometimes, corporate fraud. It allows them to win convictions for allegedly corrupt schemes even when they cannot prove a public official stole money or took a bribe.

But the Supreme Court justices signaled today they are inclined to either sharply scale back the law or strike it down entirely. If so, the court's decision could upset or complicate a whole series of corruption cases, including the pending prosecution of former Illinois Gov. Rod Blagojevich for allegedly attempting to sell the Senate seat vacated by President Obama.

Defending the law, Deputy Solicitor General Michael R. Dreeben said it is crucial for prosecuting officials who use their public positions to scheme for their personal benefit. It would "devastate a core area of public corruption" law if the measure were thrown out, he said. Dreeben argued the law can be used fairly and properly to go after officials who take bribes and kickbacks or who profit from an "undisclosed conflict of interest."

With an assist from SCOTUSblog, here are the transcripts for folks who want to read the action for themselves:

Transcripts of oral argument in today’s cases, Black v. United States (08-876) and Weyhrauch v. United States (08-1196), can be found here and here.

December 8, 2009 at 04:51 PM | Permalink

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