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Supreme Court to take up corruption law

By Robert Barnes
Washington Post Staff Writer
Monday, December 7, 2009; A03

The Supreme Court this week will consider whether to apply the brakes to what critics have called a vague and limitless law that has proved essential to federal prosecutors going after corrupt politicians and greedy corporate executives.

The court has taken the unusual step of accepting three cases that raise challenges to a federal anti-fraud provision that has been key to the prosecutions of former lobbyist Jack Abramoff, former Illinois governor George Ryan (R) and executives involved in the collapse of Enron. The government is counting on using the provision to try to convict another former Illinois governor, Rod Blagojevich (D), of trying to auction off the U.S. Senate seat formerly held by President Obama.

At issue is the law's language that it is illegal for public or private employees to "deprive another of the intangible right of honest services." The flexible standard has been part of the law for more than 20 years, but lately it has been subject to a slew of contradictory lower-court rulings and criticism, not the least of which has come from Justice Antonin Scalia.

Last term, in dissenting from his colleagues' decision not to review the law, Scalia said the provision "invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators and corporate C.E.O.'s who engage in any manner of unappealing or ethically questionable conduct."

He said the assertion that "officeholders and employees owe a duty to act only in the best interests of their constituents and employers" was so loose it could be construed to "cover a salaried employee's phoning in sick to go to a ballgame."

Apparently, the court took Scalia's alert to heart, accepting appeals for two high-profile convictions in the corporate world and the case of an obscure Alaska lawmaker.

Conrad M. Black, the former newspaper tycoon now serving prison time, tells the court that he should have been convicted only if the government proved that the unusual pay arrangement at the heart of his case caused economic harm to the company he once headed, Hollinger International, the publisher of the Chicago Sun-Times and other newspapers.

Former Alaska state representative Bruce Weyhrauch (R) says he should not have been prosecuted because no state law required him to disclose his private communications with an oil services firm. Weyhrauch was seeking legal work with the firm at the same time the company was lobbying him on a proposed tax bill.

And former Enron chief executive Jeffrey K. Skilling said the government needed to prove he was trying to line his own pockets with the fraudulent accounting scheme that brought down the giant company. He said he was simply trying to save Enron.

The cases of Black and Weyhrauch will be heard Tuesday; Skilling's will be scheduled for 2010. If the court decides them all together, it would be unlikely that there would be a ruling until near the end of the court's term in June.

Black's attorney, Miguel Estrada, is asking the court to declare the provision unconstitutionally vague.

The language "effectively licenses prosecutors to target anything that offends their ethical sensibilities, especially when the defendant is likely to generate career-building headlines," he wrote on Black's behalf. And far from looting the company, Estrada told the court, Black's leadership made it enormously profitable.

But government watchdog groups such as the Citizens for Responsibility and Ethics in Washington said the law is an "indispensable prosecutorial tool for fighting public corruption," and that a muscular federal role is important because "state prosecutors may be reluctant to bring charges against their political allies or supporters."

The honest-services language was enacted by Congress in 1988, after a Supreme Court decision that limited the mail fraud statute, saying it "does not refer to the intangible right of the citizenry to good government." The ruling said if Congress intended otherwise, "it must speak more clearly than it has."

Some experts say the court took three cases about the law as a way to try to avoid declaring it unconstitutional. The cases raise issues that have divided the lower courts, such as whether a state law must be violated before a valid prosecution, or whether economic harm to a company is necessary in the corporate world.

"It looks like they're trying to bring some clarity to the landscape," said Eric Sussman, a private white-collar crime specialist in Chicago who was the lead prosecutor in the Black case. "The court does need to clarify this area of law."

While Congress's wording may have been expansive, he said, its intent should not be hard to understand for politicians or corporate executives: "You expect them to be acting only in the interests of the company or the public, not putting money in their pockets at the same time."

The Skilling and Black prosecutions, he said, "are actual examples of alleged criminal conduct by chief executives, not misplaced attempts to criminalize otherwise innocent conduct."

The cases to be argued Tuesday are Black, et al v. United States, and Weyhrauch v. United States.

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