In the Courts

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Nelson was the Chairman of the Board of Directors for JaxPort, the entity responsible for overseeing public seaport terminals in Jacksonville. He worked part-time and was unpaid for his services. During his tenure as chairman, Nelson was also a lobbyist for Subaqueous Services, Inc. (SSI), one of JaxPort's private dredging contractors. Although Nelson, in his capacity as JaxPort Chairman, did not vote on any matter concerning SSI, he did receive a monthly “consulting fee” of $8,500; and he persuaded JaxPort to approve certain orders and take certain other actions in its contracts that would benefit SSI. Id. at 502-503. Eventually, Nelson's conduct resulted in an investigation by JaxPort's ethics officer, in which he disclosed the fact that he received payments from SSI for “access” to JaxPort. Id. at 503.

Essentially, Nelson argued that the scope of his fiduciary obligations to JaxPort were indeterminate under the honest-services mail fraud statute. Id. at 508. The court concluded that the Skilling majority acknowledged this supposed statutory vagueness and found it insufficient to warrant striking down ' 1346. Id. at 508. The court did not find Nelson's case “exceptional,” as he did not dispute that he was a public official, who “inherently owe(s) a fiduciary duty to the public to make governmental decisions in the public's best interest.” Id. at 509 (citing United States v. de Vegter, 198 F.3d 1324, 1328 (11th Cir. 1999) (internal citations omitted)). The court also was not persuaded by Nelson's argument that he lacked notice of the impropriety of his conduct, pointing to Nelson's unarguable capacity as a public official and his quid pro quo arrangement with SSI of monthly payments for representation of SSI's interests as a “classic” kickback scenario. Nelson, 712 F.3d at 509.

Notably, the court stated that future as-applied vagueness challenges to ' 1346 will face an “uphill climb.” Id.

In the Courts and Business Crimes Hotline were written respectively by Diego Ortega, a summer associate, and Associate Editor Matthew J. Alexander, an associate, at Kirkland & Ellis LLP, Washington, DC.

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Eleventh Circuit Rejects Vagueness Challenge to Honest-Services Mail Fraud Conviction

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On March 13, 2013, the Eleventh Circuit affirmed the conviction of Anthony Nelson for honest-services fraud based on his work as a lobbyist while serving as the Chairman of Jacksonville, FL's, Port Authority. United States v. Nelson , 712 F.3d 498 (2013). Nelson had challenged the mail fraud statute by arguing that it is unconstitutionally vague as applied to his conduct, basing his argument in large part on Justice Antonin Scalia's concurrence in Skilling v. United States , 130 S. Ct. 2896 (2010).

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Nelson was the Chairman of the Board of Directors for JaxPort, the entity responsible for overseeing public seaport terminals in Jacksonville. He worked part-time and was unpaid for his services. During his tenure as chairman, Nelson was also a lobbyist for Subaqueous Services, Inc. (SSI), one of JaxPort's private dredging contractors. Although Nelson, in his capacity as JaxPort Chairman, did not vote on any matter concerning SSI, he did receive a monthly “consulting fee” of $8,500; and he persuaded JaxPort to approve certain orders and take certain other actions in its contracts that would benefit SSI. Id. at 502-503. Eventually, Nelson's conduct resulted in an investigation by JaxPort's ethics officer, in which he disclosed the fact that he received payments from SSI for “access” to JaxPort. Id. at 503.

Essentially, Nelson argued that the scope of his fiduciary obligations to JaxPort were indeterminate under the honest-services mail fraud statute. Id. at 508. The court concluded that the Skilling majority acknowledged this supposed statutory vagueness and found it insufficient to warrant striking down ' 1346. Id. at 508. The court did not find Nelson's case “exceptional,” as he did not dispute that he was a public official, who “inherently owe(s) a fiduciary duty to the public to make governmental decisions in the public's best interest.” Id. at 509 (citing United States v. de Vegter, 198 F.3d 1324, 1328 (11th Cir. 1999) (internal citations omitted)). The court also was not persuaded by Nelson's argument that he lacked notice of the impropriety of his conduct, pointing to Nelson's unarguable capacity as a public official and his quid pro quo arrangement with SSI of monthly payments for representation of SSI's interests as a “classic” kickback scenario. Nelson, 712 F.3d at 509.

Notably, the court stated that future as-applied vagueness challenges to ' 1346 will face an “uphill climb.” Id.

In the Courts and Business Crimes Hotline were written respectively by Diego Ortega, a summer associate, and Associate Editor Matthew J. Alexander, an associate, at Kirkland & Ellis LLP, Washington, DC.

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