Corruption gets a break

Posted: Monday, June 28, 2010

The following editorial appeared in the Chicago Tribune:

The Supreme Court has struck a blow against the prosecution of corrupt public officials. The wound isn't fatal, but it needs to be treated promptly by Congress.

In a series of rulings Thursday, the court restricted a federal fraud statute often used against allegedly crooked pols, as well as other white-collar criminals meaning, in the future, it will be more difficult for prosecutors to bring some corruption cases now that the court has limited the so-called "honest services" statute to fraud schemes involving bribery and kickbacks.

Over the past two decades, honest services fraud has applied widely to those who misuse their positions of public trust for private gain. It was the very vagueness and malleability of the law that made it so useful to prosecutors - and, the Supreme Court now says - offensive to the Constitution.

All nine justices had one problem or another with the current application of the honest services statute. The majority, including dedicated corruption-buster John Paul Stevens, favored narrowing the scope of the law, while justices Antonin Scalia, Clarence Thomas and Anthony Kennedy voted to dump it altogether.

Thursday's rulings throw up for grabs the convictions of executives Jeffrey Skilling of Enron Corp. and Conrad Black of Hollinger International Inc., former parent of the Chicago Sun-Times. Lower court judges will have their hands full sorting out those convictions in light of Thursday's ruling.

Will Thursday's findings discourage future cases? Maybe not so much: Many white-collar criminals have committed offenses that can be charged under other statutes - conspiracy, racketeering and mail fraud to name three. So prosecutors can proceed by framing their cases around accusations other than honest services fraud.

Thursday's rulings have the net effect of pushing prosecutors to allege honest services fraud only in cases where defendants didn't participate in bribes or kickbacks. The problem is public officials and corporate executives often cheat victims without receiving bribes or kickbacks.

After Thursday, federal prosecutors will have to base some cases on less pliable legal theories than the honest services fraud of yesterday - and develop more specific evidence to convince juries (and judges) that a crime has occurred. The net effect, then, likely will be fewer anti-corruption prosecutions.

What to do? Congress needs to refine the honest services fraud statute so it both conforms to the court's rulings and gives law enforcement optimal flexibility to bring criminals to justice. Through a remarkable footnote within one of Thursday's rulings, the court majority invites Congress to act, posing questions that need to be answered for a future honest services law to pass constitutional muster. The Justice Department needs to put forward a proposal as soon as possible, and Congress needs to adopt a legislative fix.

Otherwise, the talk among prosecutors targeting corruption will turn to the ones that got away, instead of the ones that got put away.

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