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Honest-Services Fraud in the Wake of Skillings
The Supreme Court has tried again to restrict application of the honest-services fraud statute (18 U.S.C. ' 1346), which has been zealously used by prosecutors to target a wide swath of allegedly unethical behavior by public officials and private employees alike. In Skilling v. United States, the Court “pared” honest-services fraud to what the majority perceived as the provision's core: fraudulent schemes to deprive another of honest services through bribes or kickbacks. 130 S. Ct. 2896, 2928 (2010). The Court majority rejected the government's contention that the law also reached so-called “undisclosed self-dealing” by public officials and private employees. It warned Congress “to speak more clearly than it has” if it intends for the statute to cover undisclosed self-dealing. Justice Scalia, joined by two other Justices, agreed to reverse Skilling's conviction, but would have gone further and declared ' 1346 unconstitutionally vague.
Background
Skilling is the Court's latest effort to resolve the “honest-services” controversy that has raged for decades. Previously, in McNally v. United States, the Court declared that mail fraud protected only property rights and not “the intangible right of the citizenry to good government.” The Court then “invited” Congress to amend the law to define the offense more carefully. 483 U.S. 350, 356, 360 (1987). This led Congress to pass the statute considered 23 years later in Skilling, which hardly resolved the Court's problems with honest services. During the Supreme Court term just preceding the Skilling decision, Justice Scalia foreshadowed Skilling when he dissented from the denial of a petition for certiorari in an honest-services fraud case, raising federalism and vagueness concerns about the statute anew and warning that it was “quite irresponsible to let the current chaos prevail.” Sorich v. United States, 129 S. Ct. 1308, 1311 (2009) (Scalia, J., dissenting).
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